At today’s Senate Banking hearing on data-sharing and broader fintech policy questions, Chairman Crapo (R-ID) was optimistic that fintech might increase financial inclusion, but warned of privacy and security risks.  Reflecting GOP fears that platform companies use their power to favor political parties or causes and complaints about anti-firearm initiatives by large banks, the chairman also worried that firms will use data to drive social policy.  Ranking Member Brown (D-OH) and Sen. Warren (D-MA) pushed back strongly on Treasury report recommendations (see Client Report FINTECH21) calling for more data sharing among banks, data aggregators, and platform companies.  Sen. Brown in fact questioned whether nonfinancial firms should be able to access any financial data while Sen. Warren stressed the need for strong consumer protections and consent. Citing the need for a division between banking and commerce, Sen. Warren also argued against weakening the definition of “control” in the BHC Act as envisioned in the Treasury report.  FRB Vice Chairman Quarles has said that the FRB plans to simplify the current definition, but it is far from clear that this would touch on non-traditional investments.  A new FedFin report assesses many of the issues considered today.

The full report is available to retainer clients. To find out how you can sign up for the service, click here.