What changed between these versions
A substantive expansion of the bill's scope. V2 broadens the study on bank-fintech partnerships to include impacts on competition, innovation, and consumer protection, and extends the reporting deadline. Crucially, v2 adds a new section requiring a parallel study on credit union-fintech partnerships by the National Credit Union Administration.
Overview
A handful of significant changes across two sections, including the addition of an entirely new section. · V2 significantly expands the scope of the required studies and adds a new regulatory body and sector to the bill's mandate.
The most significant change in v2 is the addition of Section 3, which mandates a new study by the National Credit Union Administration (NCUA) on credit union-fintech partnerships, mirroring the existing study for banking organizations. Additionally, the scope of the original study in Section 2(a)(1) has been broadened to include impacts on competition, innovation, consumer protection, and the availability of financial products and services. The reporting deadlines for both studies have been set to one year after enactment.
Major additions
This new section requires the National Credit Union Administration (NCUA) to conduct a study on partnerships between credit unions and financial technology companies. The study must examine the impact of these partnerships on the credit union sector, competition, innovation, consumer protection, and the availability of financial products and services. It also needs to identify potential changes to Federal laws, rules, or guidance that could promote effective credit union-fintech partnerships.
This addition significantly expands the bill's reach by including the credit union sector, which was not covered in v1. It mandates a new regulatory agency (NCUA) to undertake a study parallel to the one required for banking organizations, ensuring a comprehensive view of fintech partnerships across different types of financial institutions. This will provide insights into a previously unaddressed segment of the financial industry regarding fintech integration.
Modifications
The Federal Reserve System, Comptroller of the Currency, and Federal Deposit Insurance Corporation are now required to analyze additional dimensions of fintech partnerships, specifically their effects on competition, innovation, consumer protection, and the overall availability of financial products and services. This means the resulting report will be more comprehensive, covering a broader spectrum of potential effects.
Before
V1 required a study on "how partnerships between banking organizations... and financial technology companies... can support formation of new banking organizations and community bank health," followed by specific examples like reducing time to market, lowering compliance burdens, boosting customer acquisition, improving technological capabilities, and providing access to more diverse funding sources.
After
V2 expands the study to include "the impact of partnerships... on the banking sector, competition, innovation, consumer protection, and the availability of financial products and services," while retaining the original focus on supporting new banking organization formation and community bank health and the specific examples.
The regulatory bodies (FRB, OCC, FDIC) are granted an additional six months to complete their study and submit their report to Congress. This provides more time for research and analysis, potentially leading to a more thorough report, but delays the delivery of findings to Congress.
Before
V1 required the report to Congress to be issued "Not later than 6 months after the date of enactment of this Act."
After
V2 extends the deadline, stating the report shall be issued "Not later than 1 year after the date of enactment of this Act."
Scope
Meaningful expansion or narrowing — Changes are scattered across two main sections, including a significant expansion of the scope of an existing study and the addition of an entirely new, parallel study. — V2 represents a meaningful expansion of policy direction by extending the mandate of the bill to include the credit union sector and broadening the analytical scope of the original study. — The new Section 3 largely mirrors the structure and intent of Section 2, creating a parallel set of requirements for a different sector and regulatory agency. The modification to Section 2(a)(1) expands the analytical framework for the banking sector study.
Impact analysis
Federal Reserve System, Comptroller of the Currency, and Federal Deposit Insurance Corporation (FRB, OCC, FDIC)
Procedural change and increased analytical burden, with extended timeline.
These agencies are now required to study a broader range of impacts of bank-fintech partnerships, including effects on competition, innovation, consumer protection, and the availability of financial products and services, in addition to the original focus. They also have an extended deadline for their report.
National Credit Union Administration (NCUA)
New regulatory responsibility and increased workload.
The NCUA is newly mandated to conduct a comprehensive study on credit union-fintech partnerships, including their impacts on the credit union sector, competition, innovation, consumer protection, and financial product availability, and to identify potential regulatory changes.
Credit unions and financial technology companies partnering with credit unions
Increased regulatory attention and potential for future policy changes affecting their partnerships.
These entities will now be subject to a specific federal study examining their partnerships, potential impacts, and regulatory implications, which was not previously mandated.
Congress and policymakers
Delayed information for one sector, new information for another, leading to a more holistic understanding of fintech partnerships across the financial industry.
They will receive a more comprehensive report on bank-fintech partnerships (due to expanded scope) and an entirely new report on credit union-fintech partnerships, but the delivery of the banking sector report will be delayed by six months.