The Treasury Department is calling for a more flexible regulatory approach to financial technology companies that enables "responsible experimentation in the financial sector, improves regulatory agility and advances American interests abroad."
The department released a 222-page report Tuesday that outlined more that 80 recommendations for lawmakers and regulators.
The report said the Treasury Department supports Vision 2020, an effort by the Conference of State Bank Supervisors that includes establishing a fintech industry advisory panel to help improve state regulation and harmonizing multistate supervisory processes.
The report said the Office of the Comptroller of the Currency should move forward with its special purpose national bank charter, which was announced in December 2016 and would apply bank regulatory framework to fintech companies. "A forward-looking approach to federal charters could be effective in reducing regulatory fragmentation and growing markets by supporting beneficial business models," the report stated.
Moreover, in accordance with the Trump administration's efforts across the regulatory spectrum, the report called for removing "regulatory barriers to foundational technologies, including the development of digital legal identity." That move would improve financial inclusion and enable the use of scalable, competitive technologies, the report stated, adding, "similarly, facilitating the further development and incorporation of cloud technologies, machine learning, and artificial intelligence into financial services is important to realizing the potential these technologies can provide for financial services and the broader economy."
"American innovation is a cornerstone of a healthy U.S. economy," said Treasury Secretary Steven T. Mnuchin in a news release about the report. "Creating a regulatory environment that supports responsible innovation is crucial for economic growth and success, particularly in the financial sector."
The report also featured recommendations to bolster cybersecurity, such as asking Congress to enact a federal data security and breach notification law to protect consumer financial data and ensure consumers are notified of breaches in a timely and consistent manner.
Brian Croce is a reporter at InvestmentNews' sister publication Pensions & Investments.