Joe Biden's fintech innovation policies to get bipartisan support
Israel, a recognized leader in fintech innovations worldwide, could serve a pivotal role in this evolving landscape in the US, as new policies are formed.
By MEITAL STAVINSKY, RON KLEINUS PRESIDENT Joe Biden signs an executive order as Vice President Kamala Harris watches, at the White House in Washington, DC, on January 25.(photo credit: KEVIN LAMARQUE/REUTERS)
On his first day as US president, Joe Biden made it a point to highlight his fight against inequities in the financial services industry, echoing statements repeatedly made on his campaign trail. President Biden published his “Day One Executive Actions” on his inauguration day and noted that advancing racial equity and supporting underserved communities were among the key pillars of his near-term agenda, along with providing economic relief and support to working families.One of the innovative platforms to facilitate such equality in the areas of access to capital and financial services is financial services technology, otherwise known as fintech. Israel, a recognized leader in fintech innovations worldwide, could serve a pivotal role in this evolving landscape in the US, as new policies are formed.For the most part, government policies that affect fintech in the US receive bipartisan support. Growth in fintech businesses has accelerated during the coronavirus pandemic due to innovations that responded to need. For example, the fintech community created an efficient technology to allow the prompt distribution of US Small Business Administration coronavirus relief funds to millions of struggling businesses.Lawmakers and fintech proponents foresee efforts to boost financial innovations to be driven by President Biden’s administration. These efforts include use of digital dollar systems and policies to promote stronger personal ownership of digital identities. It is anticipated that the administration will also address regulatory loopholes on how financial institutions registered with the Securities and Exchange Commission handle digital assets. Finally, Biden’s administration is also expected to increase focus on consumer protection and enforcement priorities.Establishing a road map for a secure digital identity, which could modernize public services such as government assistance and healthcare, already earned bipartisan support last year when the Improving Digital Identity Act was introduced in the US Congress. A US digital dollar, which is under consideration, could gain bipartisan support, as China and other countries move forward with central bank digital currencies. Proposals that would allow individuals to hold digital wallets fee-free bank accounts with the Federal Reserve have also previously earned bipartisan support.Most of the federal financial regulatory agencies have well-established offices of innovation that serve as each agency’s interface with fintech companies. This is very helpful in that the regulators are familiar with many fintech products and concepts. The Consumer Financial Protection Bureau, Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation have all been active under Trump-appointed leadership in promoting financial innovation. That trend is expected to continue and accelerate under the Biden administration.With a narrow Democratic Party majority in both houses of Congress and the fact that fintech businesses in many cases have bipartisan support, President Biden should be able to successfully implement key policies on fintech, including ensuring expanded access to banking services and financial products to the underserved and addressing disparate access to and treatment by the financial system. For Israeli companies with innovative fintech solutions, the evolving regulatory framework might present significant new business opportunities in the USMeital Stavinsky and former US Rep. Ron Klein are co-chairs of the Israel practice at the US law firm of Holland & Knight LLP.
