American FinTech Council Forms to Highlight Financial Inclusion, Transparency
As various financial technologies have grown in recent years, so has regulatory scrutiny. What’s more, among several well-intentioned startups, some bad actors have given the online lending and greater FinTech industries bad names at times. To combat this, some companies have banded together in order to help influence any regulations that may come down the pike. Now, two such organizations are coming together in a bid to further expand their coalition.
This week, it was announced that the Marketplace Lending Association and the Online Lending Policy Institute would be merging. The result is the formation of the American FinTech Council (AFC). According to their press release, the AFC will “promote policies that advance responsible innovation and inclusivity within financial services.”
The first of the organization’s stated principles is support for utilizing technology to create financial services that better the lives of consumers. Next, AFC members aim to offer products that are not only affordable but also transparent and responsible. Third, the association will look to advance financial inclusion and bring about racial equity. Lastly, the AFC supports regulation that will foster “responsible innovation.”
Currently, the American FinTech Council includes members of the prior organizations such as LendingClub, SoFi, Prosper, Cross River, Affirm, and others. However, the merger will also allow for other FinTechs and digital banking services to join. In order to to be added, members of the organization must support a cap of 36% APR loans, honor the “Small Business Borrower’s Bill of Rights,” and remain transparent with their products and fees.
In a statement about the creation of the AFC, LendingClub VP of Public Policy Armen Meyer said, “As a founding member of the MLA, LendingClub advanced initiatives that promoted an inclusive and customer-friendly financial system in which responsible innovation of products and practices cultivate better financial health outcomes for all Americans. The creation of the AFC is a natural progression and allows our association to bring in even more FinTech companies, banks and other financial providers across the industry that are committed to the responsible standards we’ve put in place.” Meyer added, “We encourage innovative companies that embrace regulation to join us to create a more equitable financial system that works for all.” Meanwhile, Online Lending Policy Institute executive director Professor Cornelius Hurley said of the newly-formed organization, “The AFC will be the epicenter for those looking to create a modern and inclusive financial system.”
Given their similar focus, it makes sense that the Marketplace Lending Association and the Online Lending Policy Institute would want to come together and work as one. Furthermore, as the organization points out, the now-named American FinTech Council grows the tent considerably. Going forward, it will be interesting to see what other startups join the AFC and what level of influence the group ultimately has on shaping future regulations.