{
  "id": "R46333",
  "type": "CRS Report",
  "typeId": "REPORTS",
  "number": "R46333",
  "active": true,
  "source": "EveryCRSReport.com",
  "versions": [
    {
      "source": "EveryCRSReport.com",
      "id": 623178,
      "date": "2020-04-28",
      "retrieved": "2020-04-28T22:14:31.935700",
      "title": "Fintech: Overview of Financial Regulators and Recent Policy Approaches",
      "summary": "New technologies in the financial services sector can create challenges for the various federal agencies responsible for financial regulation in the United States. As these regulators address the potential benefits and risks of innovation, policymakers have demonstrated significant interest in understanding the types of technologies that may benefit consumers and financial markets while identifying the risks that new financial services may present. As Congress considers the potential tradeoffs of financial technology or fintech, it can be useful to understand how the financial system regulators are approaching these issues. \nThe financial system regulators can be grouped into three general categories: (1) depository institution regulators, (2) consumer protection agencies, and (3) securities regulators. Each type of regulator has the authority to write rules, publish guidance, supervise institutions, and enforce compliance with the laws they implement. Further, there are similarities and differences among each regulator\u2019s mandate, which shed light on the approaches the regulators tend to take when considering new fintech.\nThe banking regulators generally are responsible for banks and credit unions, particularly focusing on the safety and soundness of these institutions. They have limited authority to write rules for, supervise the operations of, or enforce actions against firms outside their jurisdiction. Some banking regulators are responsible for granting licenses, or charters, to financial institutions so they can operate as banks and credit unions. Fintech firms typically are not licensed banks or credit unions; however, banks and credit unions often form partnerships with fintech firms, and banking regulators have legal authority to examine these types of relationships. This third-party partnership supervision allows the regulators to supervise depository institutions\u2019 interactions with new fintech firms. Banks and credit unions also have an important role in the payments system. Banking regulators have used some of their rulemaking authorities to influence technological advances in the payments system as consumers continue to shift toward electronic payment tools, such as debit and credit cards.\nThe consumer protection agencies generally are responsible for protecting consumers from unfair and deceptive business activities while maintaining a fair, competitive marketplace. Similar to banking regulators, consumer protection agencies have rulemaking, supervision, and enforcement authorities to implement and ensure industry compliance with consumer protection and competition laws, but consumer protection agencies have broader jurisdiction than banking regulators. For example, often they can directly regulate fintech companies and use their enforcement authorities to interact with fintech. In addition, they have promulgated rules pertaining to aspects of fintech. Consumer protection agencies generally balance the potential benefits of new technologies that could improve consumer outcomes with the potential risks to consumers posed by new, untested products entering the marketplace. This mandate allows consumer protection agencies to take enforcement actions to protect consumers and create safeguards from enforcement actions to protect companies offering financial services that benefit consumers or the market.\nSecurities regulators generally are concerned with protecting investors, maintaining fair and efficient markets, and facilitating capital formation. These regulators generally have limited concern for safety and soundness of the firms in their jurisdiction, focusing on disclosure requirements and contracts to promote investor protection and efficiency in the marketplace. Similar to the other regulators, they promulgate and enforce rules, but their mandate positions them somewhat differently than banking regulators and consumer protection agencies with respect to fintech. Securities regulators may endeavor to determine whether a new type of fintech product from a company counts as a security and how fintech is changing the way securities are offered. To this end, securities regulators tend to rely on their enforcement authority to ensure that new technologies do not violate securities laws.",
      "type": "CRS Report",
      "typeId": "REPORTS",
      "active": true,
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          "url": "https://www.crs.gov/Reports/R46333",
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      "topics": [
        {
          "source": "IBCList",
          "id": 4775,
          "name": "Consumer Finance Protection"
        },
        {
          "source": "IBCList",
          "id": 4870,
          "name": "Banking"
        },
        {
          "source": "IBCList",
          "id": 4898,
          "name": "Financial Market Regulation"
        },
        {
          "source": "IBCList",
          "id": 4899,
          "name": "Securities"
        }
      ]
    }
  ],
  "topics": [
    "Economic Policy"
  ]
}