The American Fintech Council (AFC) has submitted a comment letter to the Federal Reserve, the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC). The letter calls for reforms to outdated compliance requirements under the Customer Identification Program (CIP) Rule. This request is part of a broader review under the Economic Growth and Regulatory Paperwork Reduction Act of 1996.
The AFC emphasizes the need for regulatory modernization to enable fintech companies and their bank partners to provide secure, efficient, and consumer-friendly financial services. Specifically, they advocate for allowing financial institutions to collect partial Tax Identification Numbers (TINs) or Social Security Numbers (SSNs) from consumers while obtaining full TINs from trusted third-party sources for verification. This method aligns with industry best practices and ensures compliance with anti-money laundering (AML) requirements without imposing unnecessary burdens on consumers.
"Modernizing the CIP Rule is critical to building a financial system that is both secure and accessible," said Phil Goldfeder, CEO of AFC. He highlighted that the current framework does not reflect digital banking realities and that leveraging innovative verification methods can enhance security, improve consumer trust, and ensure fintech companies can continue providing transparent and convenient financial products.
AFC notes a mismatch between current compliance requirements and their legislative intent, as well as industry best practices. The letter points out challenges faced by financial institutions operating online in collecting and securing consumer data. Current CIP Rule requirements mandate collecting full SSNs during account setup, which can deter applicants and impose unnecessary operational burdens on fintech companies.
"A regulatory framework that prioritizes transparency, efficiency, and security will create a more competitive and inclusive financial services ecosystem," stated Ian P. Moloney, SVP and Head of Policy and Regulatory Affairs at AFC. He suggested that reforming outdated compliance requirements would allow for secure third-party verification of consumer information, improving financial access while strengthening AML protections.
Earlier this year, Acting FDIC Chairman Travis Hill supported updating the CIP Rule’s TIN collection requirements to eliminate barriers for banks and their fintech partners. AFC's proposal underscores the importance of regulatory consistency across financial services to ensure fair treatment in compliance examinations.
AFC is a standards-based organization representing major fintech companies and innovative banks offering embedded finance solutions. Its mission is to promote a transparent, inclusive, customer-centric financial system by supporting responsible innovation in financial services.