BRUSSELS, 6 June 2016 – WSBI's U.S. member The Independent Community Bankers of America (ICBA) agrees with the Office of the Comptroller of the Currency’s support for “responsible innovation” in the financial technology sector, ICBA wrote in a comment letter last week to the U.S. agency. But greater regulatory flexibility for community banks is needed to ensure traditional banks and FinTech companies operate on a level playing field, ICBA told the OCC.
“Community banks today are subject to an unprecedented level of regulation and supervisory review that regulators continually point to as a signal of great financial strength in the vast financial services industry,” ICBA wrote. “Any newly created financial institutions must be subject to the same rigorous safety and soundness standards as today’s community banks to be allowed to operate in this space.”
Reported today in the Financial Times
, ICBA wrote that regulation should not inhibit community banks from doing what they do best—providing tailored lending solutions to consumers and small businesses. For instance, while community banks have implemented innovative banking solutions to support their relationship-based services, they have been more reluctant to adopt online small-dollar lending services due to concerns of undue regulatory scrutiny.
Among its recommendations, ICBA called on regulators to streamline due-diligence rules for relationships with third-party technology service providers while ensuring any potential federal charter for online marketplace lenders truly levels the regulatory landscape.
“Regardless of the excitement around the prospect of innovative banking in communities across the country,” ICBA wrote, “the biggest barrier to future innovation for community banks is the regulatory burden these institutions face on a daily basis.”
The Independent Community Bankers of America®, the nation’s voice for more than 6,000 community banks of all sizes and charter types, is dedicated exclusively to representing the interests of the community banking industry and its membership through effective advocacy, best-in-class education and high-quality products and services.
>> See the ICBA news release
>> See story that appeared in today's Financial Times