Bank lobbyists in the USA are trying to convince President Joe Biden’s administration that it should introduce stricter regulations for fintech companies because of their competition with banks, Frank Media reports with reference to Financial Times.

The bankers are against the plans of one of the USA’s key regulators, the Office of the Comptroller of the Currency (OCC, an independent bureau within the U.S. Department of the Treasury).

The office has suggested installing a light version of the banking license (banking regulations) for fintech companies that do not take deposits.
In October 2020, fintech startup Social Finance got OCC’s conditional permission for creating the SoFi-Bank. Such decisions of the office have been challenged by other regulators and are now considered in court. Apart from OCC, authorities in certain states are also promoting banking regulations that have a simpler format of regulation.

“These new regulations of stand-in banks do not protect the U.S. consumers and pose a threat to financial stability,” said President of lobbying group Bank Policy Institute Greg Baer.

CEO of America’s largest bank JPMorgan, Jamie Dimon has also pointed out the faults in fintech regulations. For instance, fintech companies can charge higher commission fees for debit card transactions than banks but make no investment into the fight against money laundering, Dimon told analysts in January.

Banks also insist that the non-banking lending sector must be regulated stricter.

“Banks have essentially tasked themselves with establishing a partnership with the government,” said President of lobbying group Financial Services Forum Kevin Fromer, adding, “Banks have played a major role in the implementation of the government’s program for protection of wages, which provides loans on preferential terms to small businesses amid the pandemic.”

Banks emphasize that the representatives of tech industry have largely replaced banks as the main villains in the rhetoric of government officials. “They have pushed out the evil bankers,” FT quotes a financial manager.

Curiously, fintech companies spend more on lobbying each year, while the banks’ lobbying expenditure has decreased over the last five years. By 2020, fintech companies spent over USD 80 million on lobbying, while bankers spent a bit over USD 70 million.

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