The American Fintech Council (AFC) has called on federal banking regulators to maintain and improve the flexibility provided by the Community Reinvestment Act’s (CRA) strategic plan framework. In a letter sent to the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency, AFC urged these agencies to keep options open for banks operating under innovative business models, especially those in bank–fintech partnerships.
AFC expressed support for replacing CRA regulations that became effective on February 1, 2024 with a new framework proposed on March 29, 2024. The council emphasized that strategic plans are essential for banks using fintech partnerships to fulfill their CRA responsibilities and serve low- and moderate-income communities more effectively.
"Strategic plans are a proven pathway for innovative banks to meet CRA goals while addressing community needs in ways that reflect modern financial services," said Phil Goldfeder, CEO of the American Fintech Council. "Rather than forcing branch-based metrics on online-focused institutions, regulators should preserve and enhance these tools to capture the full impact of responsible bank–fintech partnerships."
The AFC’s letter also recommended that consumer lending be fully counted under strategic plans for institutions serving low- and moderate-income borrowers in both rural and urban areas. The organization asked regulators to recognize activities conducted through bank–fintech partnerships when granting CRA credit. Additionally, AFC advocated for defined timeframes in strategic plan approvals and a more transparent review process where banks can request feedback at any stage.
"These practical changes would help regulators evaluate CRA compliance in ways that recognize diverse business models while streamlining the process for all parties," said Ian P. Moloney, SVP and Head of Policy and Regulatory Affairs at AFC. "By making the strategic plan process more efficient and inclusive, we can encourage responsible innovation that expands access to affordable, high-quality financial products."
AFC represents major fintech companies and innovative banks focused on embedded finance solutions. The organization aims to promote transparency, inclusion, customer focus in financial systems by supporting responsible innovation and advocating sound public policy. Its members work toward increasing competition in consumer finance markets and developing products aimed at underserved groups.