Fostering Financial Innovation: How Agencies Can Leverage Technology to Shape... (EventID=116630)

Video Description

Connect with the House Financial Services Committee Get the latest news: https://democrats-financialservices.house.gov/ Follow us on Facebook: https://www.facebook.com/HouseFinanci... Follow us on Twitter: https://twitter.com/FSCDems ___________________________________ On Tuesday, December 5, 2023, at 10:00 a.m. (ET) Subcommittee on Digital Assets, Financial Technology and Inclusion Chair Congressman Hill and Ranking Member Congressman Lynch will hold a hearing entitled, “Fostering Financial Innovation: How Agencies Can Leverage Technology to Shape the Future of Financial Services." ___________________________________ Witnesses for this one-panel hearing will be: • Valerie A. Szczepanik, Director of the Strategic Hub for Innovation and Financial Technology (FinHub), Securities and Exchange Commission • Donna Murphy, Acting Deputy Comptroller for the Office of Financial Technology and Deputy Comptroller for Compliance Risk Policy, Office of the Comptroller of the Currency • Mark Mulholland, Deputy Chief Information Officer for Management, FDIC • Ann Epstein, Assistant Director of the Office of Competition and Innovation, Consumer Financial Protection Bureau • Charles Vice, Director of Financial Technology and Access, National Credit Union Administration • Michael S. Gibson, Director of Division of Supervision and Regulation, Federal Reserve ___________________________________ Offices of Innovation within the Financial Regulatory Agencies While the private sector typically leads financial innovation, regulatory agencies play an important role in establishing a regulatory environment that supports and nurtures innovation. These agencies should utilize the latest technology and innovative supervisory tools to ensure they are carrying out their mandates in an efficient and effective manner. To better foster an innovative environment for regulated institutions and firms and help modernize their internal operations, many regulatory agencies have established offices of innovations (or an equivalent office under a similar name) to accomplish both goals. These offices and their mandates differ from agency to agency, with some offices more externally focused and others e focused exclusively on internal agency operations. Under the Biden Administration, many of these offices have been restructured or repurposed from their original mandates. Consumer Financial Protection Bureau (CFPB) On May 24, 2022, Director Rohit Chopra established the new Office of Competition and Innovation. This replaced the previous Office of Innovation, with all prior programs and initiatives being absorbed into the new Office of Competition and Innovation. Under this new banner, the office would pursue a “broader initiative […] to analyze obstacles to open markets, better understand how big players are squeezing out smaller players, host incubation events, and, in general, make it easier for consumers to switch financial providers.” Subsequently, the CFPB discontinued both the No-Action Letter ( NAL) and Compliance Assistance Sandbox (CAS) policies by letting both policies expire on September 30, 2022. The Office of Competition and Innovation appears more focused on issuing reports, called “Issue Spotlights,” which focus on specific novel products and services. Since the NAL and CAS policies expired, the Office has not replaced or implemented any similar policies that reflect those prior initiatives. In November 2023, Director Chopra commented on the agency’s shift, stating: “while the CFPB continues to look for ways to promote competition and innovation, we have shifted our emphasis to identifying roadblocks to market entry and competition. We are also increasing our efforts to provide guidance on emerging business models.” Office of the Comptroller of the Currency (OCC) In 2016, the OCC established the Office of Innovation. Upon its creation, then-Comptroller Thomas Curry emphasized that the Office would ensure “that institutions with federal charters have a regulatory framework that is receptive to responsible innovation and the supervision that supports it.” Specifically, the Office of Innovation would focus on: establishing an outreach and technical assistance program for banks and nonbanks; conducting awareness and training activities for OCC staff; encouraging coordination and facilitation; establishing an innovation research function; and promoting interagency collaboration. In March 2023, the OCC established the Office of Financial Technology which the previous Office of Innovation was merged into, to bolster the agency’s expertise and ability to adapt to the rapid pace of technological changes in the banking industry. In its announcement, the agency stated that the new Office “broadens the OCC’s focus in this area and ensures the agency’s leadership and agility in providing high... ___________________________________ Hearing page: https://democrats-financialservices.house.gov/events/eventsingle.aspx?EventID=411007