On May 5, 2021, the Federal Reserve published for public comment proposed guidelines for the 12 regional Federal Reserve Banks to use when reviewing account applications and payment services for firms with novel charters.
The Fed’s proposed guidelines are in response to a rapidly evolving payments landscape that has led to the introduction of new financial products and services by FinTech companies. Their innovation has sparked an uptick in regulatory uncertainty as federal and state banking authorities have granted licenses to FinTech firms, known as novel charters. These unique charters have incentivized firms to engage in traditional banking activities (such as lending arrangements and deposit-taking) without being subject to the same requirements as other, more traditional financial institutions. As a result, Federal Reserve Banks are more engaged than ever in the review of requests for access to accounts and services from new, innovative entities seeking access to the banking system.
In this publication, you can read about:
- Implications of the Fed’s proposed guidelines for nonbanks as well as the larger financial system.
- Previous efforts KPMG has been engaged in surrounding these issues.
- How KPMG can help with the complexities of serious policy questions that lie ahead.