Treasury Fintech Report Recommendations Could Change Banking As We Know It

Editor's Note:  This article originally appeared as an alert on Clark Hill and is republished here with permission from the authors, Joann Needleman, Jane C. Luxton, and Thomas A. Brooks.

On February 3, 2017, President Trump issued Executive Order 13772 (“EO”), stating that “It shall be the policy of my Administration to regulate the United States financial system in a manner consistent with the following principles of regulation, which shall be known as the Core Principles.” The EO directed the Treasury Secretary to report to the President with regard to the extent existing laws, regulations, guidance, and other government policies promote those Core Principles. As mandated in the EO, Treasury issued the fourth and final report titled, “A Financial System That Creates Economic Opportunities Nonbank Financials, Fintech, and Innovation” (“Report”) on Tuesday, July 30, 2018. This Report, and its recommendations if implemented, will markedly change the way banking will be done in the United States.

In the Report, Treasury makes four recommendations which are designed to 1) streamline the regulatory environment to foster innovation across business models; 2) modernize activity specific regulations; 3) facilitate experimentation; and 4) embrace the efficient and responsible use of consumer financial data and competitive technologies.

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