Trump's Treasury Supports Fintech, Now What?

Photo Credit: Mark Wilson/Getty Images

The Trump administration Treasury Department has called for dramatic changes in fintech regulation and have voiced their support for a new fintech charter as well as the introduction of sandboxes and opening access to consumer data.

Secretary Steve Mnuchin said: "American innovation is a cornerstone of a healthy U.S. economy. Creating a regulatory environment that supports responsible innovation is crucial for economic growth and success, particularly in the financial sector.

"America is a leader in innovation. We must keep pace with industry changes and encourage financial ingenuity to foster the nation"s vibrant financial services and technology sectors."

In a report, the US Treasury made 80 recommendations across 222 pages and explored the government"s aim of embracing customer data in a similar way to how PSD2 is being embraced in Europe and transform regulation with the use of sandboxes, so that it innovation is encouraged.

As reported in The Hill, policymakers have found it difficult to keep up with advancements in fintech and the impact on the traditional financial industry. But with the new attitude towards the burgeoning industry, those that create the regulations will be able to work closely with industry advocates to adapt the rules.

States are also encouraged to work together to remedy money transfer rules that regulate payment systems and cryptocurrency marketplaces and prevent unnecessary regulatory burdens.

The report also encourages the Office of the Comptroller of the Currency to move forward with the charter that would give fintechs a license to operate across the US in the same way that banks do.

The Treasury said the charter could “provide a federal approach to reducing regulatory fragmentation and supporting beneficial business models.” The report also makes other recommendations to expand access to financial services.

The department called for repealing the Consumer Financial Protection Bureau"s (CFPB) payday loan rule and went on to support the use of alternative data such as utility and rent payments to form credit reports for consumers with limited loan history.

But what does this mean? Despite Trump promising to do away with Dodd-Frank, which was signed into law by former President Barack Obama to prevent another financial crisis, this move by the current leader will be beneficial for the fintech industry and somewhat mimics what is being done in Europe.

Collaboration is the way forward because fintechs do not have legacy and trust on their side, especially in the US where people swipe and sign, instead of using contactless cards and apps to make payments.

I currently work as an SEO Content Executive for DMG Media, optimising content across the UK, US and Australia. Before this, I was the Editor of financial technology website bobsguide and this is where my interest and expertise in global fintech was achieved. Acting as the D...

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