HFSC Explores Wide Array of Merger, Fintech, ILC Reforms
In a wide-ranging hearing today, HFSC’s Consumer Protection and Financial Institutions Subcommittee showed the extent to which Chairwoman Waters (D-CA) and progressive Democrats are wary of large-bank mergers. Buoyed by witnesses who believe recent large transactions accelerate under-service for communities of color, Democrats suggested new, tougher standards and greater transparency. Republicans countered that regulatory burden exacerbates consolidation. However, both sides of the aisle agreed that fintechs pose an array of risks, with Democrats contending these warrant new ILC standards or even an end to limited-purpose charters. Republicans lambasted the true lender rule reversal, arguing it harms the bank-fintech partnership model they generally supported. For fintechs operating outside of bank partnerships, there was bipartisan agreement that the regulatory playing filed needs to be leveled to reduce arbitrage opportunities.