The American Fintech Council (AFC) has expressed its approval of the Federal Deposit Insurance Corporation's (FDIC) recent decision to approve the Customer Identification Program (CIP) Rule Exemption Order. Ian P. Moloney, AFC's Senior Vice President and Head of Policy and Regulatory Affairs, commented on this development.
"We have long championed regulatory modernization, including updating the Customer Identification Program (CIP) rule to create parity for similarly situated financial services and bring requirements in line with responsible innovative practices," Moloney stated. He emphasized that this move by the FDIC is a significant advancement towards modernizing outdated compliance requirements and broadening access to the financial system, which AFC has been advocating for since 2023.
Moloney further explained that "this decision reflects growing recognition that rigid regulatory interpretations—like requiring full Social Security numbers at onboarding—can needlessly restrict access without improving security." The exemption allows financial institutions and their fintech partners to utilize modern identity verification tools while maintaining consumer protections. This approach aligns compliance with the CIP rule more closely with Congress' intent.
Moloney also commended Acting Chairman Travis Hill for his leadership in updating this framework. "We hope that other agencies will follow the FDIC lead, and we remain committed to working with regulators to support clear, pragmatic policies that enable responsible innovation and ensure more Americans can safely access financial services," he added.