Senators Request GAO Study of Fintech

On Monday, April 18, 2016, a group of Democratic Senators sent a letter to the Government Accountability Office (GAO), requesting it study the recent development and regulation of financial technology firms, often referred to as “fintech.” Sens. Jeff Merkley (D-OR), Sherrod Brown (D-OH), and Jeanne Shaheen (D-NH) acknowledged fintech has filled gaps in communities where access to credit is often lacking. However, with the changing technology environment and the growing need for credit, the lawmakers expressed concern over what role regulators have to play over small business and consumer lending in this space.  The senators noted “government agencies such as the federal financial regulators, Small Business Administration, or the Federal Trade Commission may have a role to play, as well as state regulators.”  Further, they asserted “[a]s we saw during the crisis, gaps in understanding and regulation of emerging financial products may result in predatory lending, consumer abuse, or systemic issues. We are very interested in ensuring that fintech provides credit to small businesses and consumers in a way that prevents abusive practices while expanding economic opportunity.”