With fintech firms appearing stuck in neutral in their efforts to seek bank charters from federal regulatory agencies, observers say state licensing options could be in vogue again in 2020.
The Rakuten application has piqued interest in reviving legislation aimed at stopping commercial firms from owning banks. Yet Congress previously had the chance to enact such a measure and declined.
A report from the Financial Stability Oversight Council cited a bigger share of originations and servicing by nonbanks as a potential vulnerability in the financial system.
The fintech firm, which had made prior attempts to offer a federally insured consumer account product, said it has “no plans at this time” to become a bank.
The 2015 decision posed new legal challenges for institutions trying to sell loans to third parties, but the federal regulatory agency proposed Monday steps for banks and debt parties to evade state interest rate caps.
The service will move customers’ uninvested cash from their Robinhood accounts into existing banks, which are already insured through the Federal Deposit Insurance Corp.
All of the GOP members on the House Financial Services Committee called on the regulator to consider "administrative decisions" to offset the impact of the 2015 decision.
By turning to investors outside traditional banking, private-equity firms are finding it easier than ever to get loans to finance their buyouts of corporations that are nowhere close to being profitable.
The largest financial institutions have a golden opportunity to capture more market share because of the under-40 crowd’s decided preference for digital banking, J.D. Power says. Yet so do nonbanks.
With no fintech applicant officially seeking the agency’s specialized charter, Judge Dabney Friedrich said claims by the Conference of State Bank Supervisors still were not ripe.
