The American Fintech Council (AFC) has voiced concerns over the Federal Deposit Insurance Corporation's (FDIC) approach to innovation in financial services. The AFC, representing responsible fintech companies and major Banking-as-a-Service banks, has sent a letter to the FDIC addressing what it perceives as a lack of communication and an adverse stance towards innovation.
Phil Goldfeder, CEO of the AFC, stated, "The FDIC is supposed to be communicative and evenhanded in its examination and enforcement of financial institutions, but its recent, clear pattern of targeting banks who partner with fintech companies is obvious to anyone paying attention." He added that this could result in significant harm to community banks and their consumers.
The AFC's letter highlights concerns about the FDIC's application of its risk-based framework. The council argues that engagement with industry stakeholders is crucial for effective oversight in today's rapidly evolving financial ecosystem. However, they claim the FDIC has not engaged similarly compared to other federal and state regulators.
Goldfeder further elaborated on this point: "It appears that the FDIC has developed an approach towards its examinations of and enforcement actions for innovative banks that is improperly targeting certain institutions and severely stifling innovation, in turn limiting consumer choice in financial services."
The letter was sent following inquiries from leading Members of Congress about the FDIC's regulatory agenda. The AFC emphasizes its commitment to working with the agency for a balanced path forward that ensures appropriate oversight without hindering progress.