WASHINGTON—Ahead of a hearing today by the House Financial Services Subcommittee on Digital Assets, Financial Technology, and Artificial Intelligence titled “Partnering for Innovation: How Bank-Fintech Collaborations Enhance Financial Infrastructure,” two credit union trade groups have sent letters.
In its letter, America’s Credit Unions said the emergence of fintechs presents opportunities, threats, and challenges to financial institutions and states, in part:
- Congress and regulators must ensure that when fintechs companies compete with regulated financial institutions, they must do so on a level playing field where smart regulations and consumer protections apply to all actors in that space
- A stringent stance from regulators on fintech or artificial intelligence (AI) usage in the financial sector could disproportionately harm credit unions and smaller institutions while benefiting the largest incumbents
- Financial sector regulators should tailor future actions related to AI in a way that distinguishes between the use of AI technology by regulated versus unregulated institutions.
DCUC Urges Action
Separately, the Defense Credit Union Council said that when it comes to HR 6552 it supports efforts to better understand how responsible fintech partnerships can strengthen the regulated financial system and is encouraged that the amended version of H.R. 6552 includes a parallel NCUA study of credit union-fintech partnerships. In its letter, DCUC encouraged Congress ensure credit unions are fully included in the bill’s scope, reporting framework, and analysis of fintech collaboration.
DCUC requested that the Subcommittee:
- Retain Section 3 of the amended bill to ensure credit unions remain explicitly included in the federal study and reporting framework.
- Clarify inclusion of credit union stakeholders and CUSOs in the NCUA consultation process.
- Strengthen the study’s scope to address real-world barriers such as third-party risk requirements, payment system access, cybersecurity and fraud controls, and data and core integration challenges.
DCUC also said the study should reflect impacts on low-income, rural, minority, and defense credit unions.
‘Important Opportunity’
“This is an important opportunity for Congress to ensure that credit unions are not treated as an afterthought in the evolution of financial innovation,” Jason Stverak, DCUC chief advocacy officer, said in a statement. “Credit unions serve millions of Americans, and they must have a meaningful seat in this conversation if policymakers want a complete understanding of how fintech partnerships are reshaping access, competition, and consumer protection. We appreciate the Subcommittee’s attention to this issue and encourage a framework that reflects the full depository ecosystem, not just one segment of it.”
The House hearing is scheduled for 10 a.m. ET today.
ACU Presses For More Relief in ROAD Act
Separately, America’s Credit Union noted that with several credit union regulatory relief provisions added to the 21st Century ROAD to Housing Act (H.R. 6644), it is calling on House leadership to support those changes and include additional regulatory relief.
ACU noted that the House will vote on an amended version of H.R. 6644 this week, and that the regulatory relief added to the bill includes:
- Credit Union Board Modernization Act, to allow credit union boards to meet a minimum of six times per year, rather than the currently required 12. America’s Credit Unions also supports exemptions in the bill for credit unions with a low CAMELS composite rating, credit unions with a low management component rating, and de novo credit unions as they stabilize operations
- Advancing the Mentor-Protégé Program for Small Financial Institutions Act, which would empower minority depository institution (MDI) credit unions other smaller credit unions to collaborate with larger credit unions in mentorship efforts
- American Access to Banking Act, which would promote the formation of de novo credit unions and other community banks by streamlining the federal application process, establish mentorship and outreach programs, improve capital formation pathways, and establish dedicated points of contact for applicants through casework support to ensure the success of de novo institutions.
Additional Requests
America’s Credit Unions said the letter also calls for the commitment to amending a section of H.R. 6644 providing relief to de novo banks to include credit unions, and include additional bills:
- Minimizing Outdated Restrictions that Exclude (MORE) Opportunities for Homeownership Act (H.R. 7647), which would make it easier for credit unions to join a Federal Home Loan Bank (FHLB) by updating the definition of Community Financial Institution in the FHLB Act
- Expanding Access to Lending Options Act (H.R. 4167), to allow NCUA to permit loan maturities of more than 15 years; and
- To improve access to NCUA’s Central Liquidity Facility to help credit unions more easily access emergency liquidity, such as the bipartisan Senate CLF Enhancement Act.
