WASHINGTON—Credit union trade groups are responding cautiously to two new executive orders signed by President Donald Trump that seek to reshape financial services and regulation by promoting fintechs—including giving fintechs access to the payments rails–while also tightening oversight tied to financial integrity and compliance.
The orders—titled “Integrating Financial Technology Innovation into Regulatory Frameworks” and “Restoring Integrity to America’s Financial System”—direct federal agencies to review existing policies affecting innovation, payments access and financial oversight.
America’s Credit Unions and the Defense Credit Union Council (DCUC) both said they support efforts to modernize regulation and reduce unnecessary burdens, while warning that changes should preserve safety and soundness protections for the financial system.
Order on Fintech
The executive order on fintech integration calls on regulators to streamline rules and supervisory practices viewed as barriers to innovation and competition, while encouraging greater collaboration among fintech companies, federally regulated financial institutions and regulators. The order also directs the Federal Reserve to examine policies governing access to payment services and consider whether certain nonbank firms should have broader access to payment infrastructure.
Order on Illicit Finance
The separate order on restoring integrity to the financial system focuses on illicit finance and customer due diligence requirements. Among other directives, it instructs Treasury to issue advisories identifying suspicious activity patterns tied to payroll tax evasion, concealment of account ownership and labor trafficking, and to propose updates to Bank Secrecy Act regulations.
Key provisions of the executive orders include:
- Regulatory reviews intended to reduce barriers to financial innovation and competition
• Examination of broader access to Federal Reserve payment services and payment accounts
• Increased collaboration between fintech firms and regulated financial institutions
• Expanded focus on customer due diligence and suspicious activity identification
• Guidance related to credit and financial services risk management standards
America’s Credit Unions Responds
In a statement, America’s Credit Unions said it is reviewing the full scope of the fintech order and generally supports streamlining regulatory processes, reducing barriers and encouraging collaboration.
The organization said, however, that portions of the order could raise “new safety and soundness concerns,” particularly language that could permit nonbanks to gain access to certain federal licenses and services, including access through the Federal Reserve.
America’s Credit Unions said it has previously warned that allowing entities currently ineligible for Federal Reserve master accounts broad access to clearing and settlement infrastructure could weaken oversight and create supervisory gaps, including around anti-money laundering compliance.
The organization added it is also reviewing a separate Federal Reserve proposal that would invite certain nontraditional, but still eligible, financial institutions to access a special-purpose, limited-feature payment account.
DCUC Responds
DCUC likewise welcomed the administration’s focus on modernization while urging regulators to tailor requirements for credit unions.
“The Defense Credit Union Council, DCUC, appreciates President Trump’s focus on modernizing financial regulatory frameworks to better reflect today’s digital economy and evolving consumer expectations,” said Anthony Hernandez, president and CEO of DCUC.
Hernandez said credit unions have long used responsible innovation to expand access and support military members, veterans, young families and underserved communities.
Jason Stverak, DCUC’s chief advocacy officer, said regulators should adopt “appropriately tailored requirements” recognizing the cooperative structure and mission of credit unions, especially smaller and mid-sized institutions that face disproportionate compliance burdens.
“A balanced and right-sized regulatory framework will help ensure credit unions remain competitive, continue investing in technology, and expand access to affordable financial services to communities nationwide,” Stverak said.
