SAN DIEGO Feb 6 Philadelphia Federal Reserve
Bank President Patrick Harker on Monday called for more
regulatory oversight of the growing fintech sector, which
includes a broad range of companies from payment apps like
Square to online lending platforms such as Lending Club.
Harker, who votes on monetary policy this year on the Fed's
policy-setting panel, did not comment on the economy or on the
outlook for interest rates in his prepared remarks.
Instead he focused on the state of regulation of
technology-based financial services companies, some of which
have been wary of new rules or licensing requirements for fear
they could stifle innovation. Because they do not accept
customer deposits, fintech companies are not now subject to many
federal banking laws.
Beefing up rules for the industry now, before the inevitable
future crisis or economic downturn, would not only better
protect consumers, but would also protect the companies
themselves, Harker argued Monday.
"It's unlikely that increased oversight will be welcomed
with open arms, but I should say now that it's actually in the
interest of fintech firms," Harker said in remarks prepared for
delivery to the Global Interdependence Center. "What fintech
outfits don't want is regulation that comes in after a crisis."
Harker's remarks come as President Donald Trump has begun an
effort to roll back banking reforms put in place after the last
financial crisis, that Trump says have held back lending.
Fed officials have largely defended those reforms, saying
they have made the financial markets safer and less prone to
future crises. Harker did not comment on the Wall Street
reforms, or efforts to roll them back, in his prepared remarks.
(Reporting by Ann Saphir; editing by Diane Craft)