The American Fintech Council (AFC) has reached out to the Ohio Department of Financial Institutions (DFI), seeking clarity on recent guidance affecting bank-fintech partnerships. In a letter addressed to Kevin R. Allard, Superintendent of the DFI, AFC highlighted concerns about potential regulatory uncertainty and market disruption that could arise from the new guidelines.
Phil Goldfeder, CEO of AFC, expressed concern over the policy shift: “The Ohio Department of Financial Institutions’ shift in policy threatens to undermine years of progress in fostering responsible innovation and expanding access to credit for underserved communities.” He acknowledged the department's engagement but urged for updated guidance to ensure fair oversight.
The guidance represents a significant change from previous interpretations which did not require fintech companies partnering with financial institutions to be licensed under the Small Loan Act (SLA). This alteration could disrupt established practices and limit access to affordable credit. Additionally, AFC pointed out the absence of a formal public comment process as a critical issue needing attention.
Ian P. Moloney, SVP and Head of Policy and Regulatory Affairs at AFC, added: “The regulatory changes outlined in the guidance create unnecessary uncertainty for innovative financial institutions and threaten to reduce competition and innovation in the market.” He requested more clarity on these changes and suggested extending compliance deadlines.
AFC has asked for either rescinding the guidance or granting a 120-day extension for compliance with new licensing requirements. This would align with practices in other states and facilitate smoother transitions for affected parties.
As an organization representing major fintech companies and innovative banks, AFC promotes transparency and inclusivity within financial services while supporting responsible innovation. Its members are committed to enhancing consumer finance competition by developing products that better serve underserved segments.