Science & Technology



What would a Biden White House mean for fintech?

By Jim Saksa, CQ-Roll Call on

Published in Science & Technology News

var playerInstance_5699521 = jwplayer( "jwppp-video-5699521" );playerInstance_5699521.setup({playlist: "",3/4)Despite the support from Big Tech and Big Banks, Biden is expected to take a more adversarial approach to both, wrote Isaac Boltanksy of Compass Point Research in a recent client memo, particularly if Democrats also reclaim the Senate and retain the House.

"Under a Blue Wave, banks would face higher corporate taxes and a less hospitable regulatory environment," Boltansky wrote. "We believe the leadership of the [Federal Trade Commission] and [Department of Justice] under a Biden administration would be structurally skeptical of large-scale M&A, which could impact advisory businesses and the consolidation landscape."

Buying up fintech firms is one way such big institutions build their own fintech capacity.

Choosing the regulatorsWhat Biden's fintech-specific policies will end up looking like will depend heavily on his choices to run the financial regulators, emphasized Paul Thornell, a former Democratic staffer on the Hill and in the White House and Citigroup lobbyist now at Mehlman Castagnetti Rosen & Thomas.

"Fintech is not really partisan like other areas of banking regulation," he said.

Some Democrats applaud Silicon Valley's challenge of Wall Street's hegemony on all things money, while others are more skeptical.


The only mention of fintech among the policies on Biden's campaign website comes under the pledge "strengthen and expand the Community Reinvestment Act to ... ensure that 'fintechs' and non-bank lenders are providing responsible access to all members of the community."

Enacted in 1977, the CRA sought to reverse decades of redlining, a practice by which banks in poor minority neighborhoods took the community's deposits but invested and lent that money only in whiter, better-off areas. The law requires banks to sufficiently lend and invest in the neighborhoods surrounding their branches and ATMs in order to qualify for regulatory approvals to expand.

Fintech firms, because they don't have branches, are raising questions about how to apply the law.

Thornell expects Biden-appointed financial regulators to take a more coordinated approach to overhauling the CRA than the disjointed effort under Trump. The Federal Reserve and Federal Deposit Insurance Corporation declined to adopt the Office of the Comptroller of the Currency's changes, which were broadly panned by both fair housing advocates and banks.


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