News Digest: Bank-Fintech ventures benefit customers, says US Treasury
November 18, 2022
President Joe Biden’s crackdown on anti-competitive practices in the United States, a new report from the Treasury says partnerships between banks and fintech companies are a net positive for consumers. This endorsement comes at a time when such arrangements have grown at a rapid rate raising doubts on whether these activities fall outside regulatory scope.
The Treasury report admitted to gaps between how these relationships are regulated, but said partnerships between banks and fintech companies brought new products targeted at specific communities that traditional financial institutions haven’t catered to. Moreover, these products and services are now coming at more competitive rates.
Treasury Secretary Janet Yellen said in a statement provided to Reuters that regulators can actually encourage more competition and offer more protection to consumers with their existing authority itself. On its part, the Treasury said banking regulators should finalize their proposed guidelines on how banks should manage such third-party associations.