Federal: AFC Letter in Support of the FAIR Exams Act

Dear Chairman Hill, Ranking Member Waters, and Members of the Committee:

On behalf of our members,  the American Fintech Council (AFC) writes to extend our support for the Fair Audits and Inspections for Regulators’ (FAIR) Exams Act. AFC has consistently advocated for a regulatory framework that is clear, consistent, and responsive to evolving financial services. The FAIR Exams Act advances these principles by enhancing transparency and accountability in bank examinations and establishing a meaningful appeals process for legitimate disagreements between regulators and financial institutions.

AFC is the premier trade association representing the largest financial technology (Fintech) companies and innovative banks who power them. Our mission is to promote a transparent, inclusive, and customer-centric financial system by supporting responsible innovation in financial services and encouraging sound public policy. AFC members foster competition in consumer finance and pioneer products to better serve underserved consumer segments and geographies. Our members are lowering the cost of financial transactions, allowing them to help meet demand for high-quality, affordable products.

AFC recognizes the importance of not only developing clear and consistent regulatory frameworks, but also transparent and accountable examination processes. To accomplish these efforts, AFC has consistently and proactively engaged with state and federal financial services regulators to improve their understanding of the innovative financial products and services offered by our members. Further, we have diligently worked with regulators to develop pragmatic regulatory frameworks that help ensure effective oversight of the modern banking system.

Unfortunately, in practice, we continue to see growing discrepancies between federal financial regulators in their posture, policies, and examination practices towards innovative financial institutions. Specifically, we have found that a number of our members, during the course of their examinations, have experienced significant delays and misinterpretations of risk by examination staff due to a lack of understanding about the financial institution’s innovative services. Given the current examination appeals structure, these members are often left with no viable options to voice their legitimate concerns about examiners’ assessments.

AFC supports the FAIR Exams Act because it recognizes the issues our members experience and delivers pragmatic solutions by increasing the oversight authority of the Federal Financial Institutions Examination Council to ensure clear, consistent, and accountable examination processes throughout the federal regulatory system. Further, we support the Act’s establishment of a robust appeals process for legitimate disagreements between financial institutions and their regulators.

The pragmatic approach taken in the FAIR Exams Act reflects the policy aims of AFC and, if enacted, will significantly improve the examination process for the benefit of regulators, regulated entities, and the stability of the broader financial services industry. In turn, this will ensure the continued development of responsible innovation in the financial services industry for the benefit of consumers. Therefore, AFC and its members support this legislation.

We commend Chairman Hill and the co-sponsors of the FAIR Exams Act for their continued leadership on this important issue. We also encourage bipartisan consideration and support for this common-sense legislation and look forward to working with the Committee and the full Congress to advance its passage.

Sincerely,

Ian P. Moloney
SVP, Head of Policy and Regulatory Affairs
American Fintech Council

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[1] AFC’s membership spans technology platforms, non-bank lenders, banks, payments providers, loan servicers, credit bureaus, Earned Wage Access providers, and personal financial management companies.

[2] See, American Fintech Council, “Request for Information on Bank-Fintech Arrangements Involving Banking Products and Services Distributed to Consumers and Businesses—Docket No. OP-1836; RIN3064-ZA43; Docket No. OCC-2024-0014”, (Oct. 30, 2024), available at https://www.fintechcouncil.org/advocacy/federal-advocacy-letter-on-interagency-bank-fintech-arrangements-rfi.