I was in Washington DC last week for the fourth annual Online Lending Policy Summit. This one day event is put on by the Online Lending Policy Institute (OLPI) where regulators, lawmakers and the industry come together to discuss regulatory frameworks and responsible innovation.
The day of the Summit also happened to coincide with the day that Mark Zuckerberg was testifying before the House Financial Services Committee. There were several Congressmen who spoke who are on that committee, so Facebook’s move into financial services, specifically their Libra initiative, became one of the themes discussed throughout the day.
They kicked off the event with Congressman Bill Foster (D-IL) who is Chairman of the House Artificial Intelligence Task Force as well as a member of the House Financial Services Committee. He also happens to be the only member in Congress with a PhD in physics. He believes that AI is going to disrupt financial services as much as other parts of the economy and many jobs will be impacted. He also stressed that it is important to be able to explain any AI decision impacting consumers in a simple manner. One interesting comment he made was about the state of the US government today, it has not been structured for a world where technology is the largest industry. When it comes to interest rate caps he believes that this should be a data driven decision. If the cap cuts too deep it could harm consumers. He will be paying close attention to what California is doing in this area.
The energetic Congressman Trey Hollingsworth (R-IN) talked about the divide between urban and rural areas and how fintech innovation, particularly online lending platforms, can help to bridge the divide. As branches for banks and credit unions close rural Americans often feel that they cannot participate in the same economy as urban Americans. His north star is to ensure that rural Americans have access to today’s financial system. He also said it is important for regulators to be harnessing the latest technology and that regulatory uncertainty has the potential to delay innovation in the long run to the detriment of the US economy. He closed by telling the audience that he is a big fan of the important work we are doing in fintech. Then he was off to question Zuckerberg. [Read more…]