Forkner on Fintech Regulation
By Albert L. Forkner
Chairman, Conference of State Bank Supervisors
Commissioner, Wyoming Division of Banking
Forker delivered these remarks at the CSBS Fintech Forum, April 10, in Brooklyn, N.Y.
On behalf of all state financial regulators, let me welcome you to our Fintech Forum. We have done events like this in different regions of the country. But this one probably has the broadest participation by regulators, both state and federal, as well as consumer groups, and industry officials.
I want to thank the state regulators who organized this event – Maria Vullo of New York, Robin Weissman of Pennsylvania, Jan Owen of California, and Bryan Schneider from Illinois – as well as staff at CSBS and the New York Department of Financial Services.
From our perspective, we are looking to modernize state regulation of fintechs and other nonbanks. We see, as you do, how fintech is changing how we get a mortgage, transmit money, and, my favorite, send money to your kids. Well, maybe that’s their favorite-- you have removed much of the friction from that experience, much to the detriment of my bank account, however.
To support a financial system fueled by fintech, we as regulators want to make sure that consumers have access to great products with strong protections...that businesses operate on sound financial footing...and transactions function properly and securely. And we want to perform our roles in the most effective and efficient manner.
To do that, we need to learn more from you. About your products and services. About your business models. About your operations. That is why we are holding this forum. For us to learn from you, and you to learn from us. Once we achieve a common level of knowledge, then we each have the information to take action.
And taking action is what we all want. So, I want this discussion to be productive. But I also want us to be focused on what we can achieve with the knowledge we gain today.
For example, last Spring, state regulators committed to moving towards an integrated, 50-state system of licensing and supervision for nonbanks, including fintechs. We put together an implementation plan, we call it Vision 2020, to help get us there. In the months since, we have been busy.
We have launched development of a next generation technology platform...which promises to dramatically improve how we regulators license and supervise nonbanks...while simplifying the experience for companies, too.
We also have formed a Fintech Industry Advisory Panel, comprised of 33 fintechs of all shapes and sizes. They have divided into subgroups on lending and money transmission. They have met several times, including last week...identified pain points, or as we call them, “opportunity areas”...and now are doing the hard work to develop possible solutions.
But that’s not all. This morning, CSBS is announcing yet another fintech action. To improve communication between state regulators and fintech companies, all 50 states and the District of Columbia have identified Innovation Contacts within their agencies. They will be the primary point of contact with fintech companies. So, no more hunting for the right person.
I hope you come away with the impression that state regulators take fintech seriously. We are your primary regulator. And we are committed to ensuring consumer protections and a sound financial system. But we also see the opportunity to transform customer experiences. By modernizing how we regulate the entire nonbank sector, we believe we will be in a better position to block the bad and nurture the good.