Fintech policy is off to a roaring start in 2022, with innovation and digital assets covering policy agendas across the world. A big week for macro ahead with Fed hearings, but lots else to track on crypto, BNPL, and broader innovation.
- Congress holds hearings on Fed Board nominees: The Senate Banking Committee will hear testimony and ask questions of Jerome Powell and Lael Brainard, who President Biden earlier nominated for Chair and Vice Chair of the Fed Board of Governors, on Tuesday and Thursday, respectively. This hearing comes as markets prepare for rate hikes Powell signalled in the last months of 2021. Democrats are expected to push on the Fed’s role in climate change, with Sarah Bloom Raskin surfacing as a potential candidate to fill one of the Board’s empty seats. Fed rules on trading are also an expected topic, in light of revelations regarding trades made by outgoing Vice Chair of Supervision Richard Clarida in the pandemic’s early days.
- The CFPB continues its charge against Credit Bureaus: Following a series of reports released in late 2021 revealing higher rates of complaints from communities of color, the CFPB released a broader report criticizing the Bureau’s failure to provide relief to consumer complaints at a 98% rate. It’s yet to be seen what actions the CFPB could take to repair a credit scoring system they oversee, but it’s just one of the many corners of today’s financial ecosystem in the Bureau’s crosshairs.
- Crypto leaders expect 2022 to be the year of regulation: First FTX’s SBF, then crypto analysts and prognosticators have stepped out to say they expect some form of crypto regulation to come to the US this year. These claims oddly reinforce the paradoxical perspective that crypto is somehow both regulated and unregulated today. Expectations as laid out by a16z and Coinbase in their respective white papers last year are that crypto deserves its own set of rules under a new pro-innovation framework. Whispers are that Congress wants to start by exploring Bitcoin’s impact on the environment. Meanwhile, New York continues to stake its claim as a crypto center, with its Department of Financial Services hiring a Deputy Superintendent of Virtual Currency.
- Consumer groups urge UK’s HM Treasury to crack down on BNPL: HM Treasury’s open consultation on BNPL closed last week, with comments from industry and consumer groups discussing the ecosystem’s future. The consultation proposed to close an exemption that allowed BNPL to operate unregulated under terms initially designed for large consumer purchases and invoice financing. Consumer groups urged a crackdown, including additional disclosures to ensure consumers understand the products.
- China’s securities regulator cites negligence of major investment bank CICC for its underwriting efforts around the IPO of hardware manufacturer Lenovo. The IPO was withdrawn after finding the company did not meet certain criteria to qualify for its category of “scientific and technological innovation.”
- The Royal Bank of India is setting up a new department tasked with fintech innovation.
- El Salvador is exploring a bill to support bitcoin bonds.