The White House is pushing federal financial regulators to take a fresh look at the rules that shape how FinTechs work with banks, payment systems and the broader financial services sector.
President Trump signed an executive order Tuesday (May 19) directing federal regulators to review existing regulations, guidance, supervisory practices and application processes that may be updated to encourage financial innovation and competition, while maintaining safety and soundness, according to a White House fact sheet.
The order is aimed at the regulatory plumbing behind modern financial services. It calls on federal regulators to identify rules that could be changed to support the growth of FinTech firms and federally regulated financial institutions of all sizes. It also asks the Federal Reserve to evaluate the legal and policy framework governing access to Reserve Bank payment accounts and payment services by uninsured depository institutions and nonbank financial companies.
That piece could draw close attention from payments companies. Direct or expanded access to Federal Reserve payment services has long been a major issue for nonbank FinTechs, which often rely on banks to connect to core payment rails. The White House fact sheet says the Fed should report on its legal authority to extend such access, options for expanding access with risk controls, and any legal barriers that would need legislative or regulatory changes.
The order also frames third-party risk management and legacy financial rules as areas that may need modernization as more banking, payments, brokerage, securities and custodial services move through digital channels.
“Other financial regulations, guidance, and policies are relics of a time when financial services were predominately provided in brick-and-mortar-centric settings and must be updated to reflect the modern age, the digital economy, and the benefits that technology can offer to all Americans, including lowering costs of financial services,” the White House said in the fact sheet.
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PYMNTS has tracked how regulation, digital assets and payment rails are converging across financial services. Recent coverage examined how a White House crypto report said stablecoins could help keep the dollar dominant and how the GENIUS Act’s Senate passage put stablecoin regulation closer to becoming federal law. PYMNTS has also reported on how banks are navigating the digital asset boom and regulatory shift as crypto, stablecoins and payment modernization move further into mainstream finance.
