Lack of consumer protections in fintechs lead to CU concerns
Credit unions have concerns about the lack of protections involving non-regulated entities engaged in financial services, CUNA wrote to a House subcommittee Thursday. The House Financial Services Subcommittee on Consumer Protection and Financial Institutions conducted the hearing to examine trends in financial institution charters.
“Credit unions are concerned that non-regulated companies are engaged in financial activities by offering products and services that are traditionally offered by credit unions and banks. These non-bank providers often strive to offer these products and services without being subject to robust consumer protection laws and regulations in place for banks and credit unions.”
CUNA also noted that the scope of Thursday’s hearing should lead the subcommittee to examine the legal framework and regulatory scope governing the oversight of traditional banks and other commercial businesses that are engaged in financial activity.
Other highlights of the letter include:
- CUNA believes the Office of the Comptroller of the Currency should undertake an open and transparent process in considering new types of charters or even “approving what appears to be traditional charters that fundamentally alter the banking landscape without full consideration of the impact on consumers and other stakeholders;”
- CUNA continues to maintain that similar products and services should be regulated similarly so that consumers protection runs with a product or service, not with the entity providing the products or service; and
- Allowing credit unions to expand into underserved areas would, according to conservatives estimates from CUNA, produce first-year benefits for over one million consumers who now have no realistic, affordable options in the financial marketplace.