Hill Delivers Opening Remarks at Hearing on Modernizing Financial Services Through Innovation and Competition

Hearing

"Having used an extensive amount of time over the last few months to work in a bipartisan fashion to craft digital assets bills --one on payment stablecoins and the other on crafting a regulatory framework for digital assets-- I'm excited today that the committee comes back to explore financial technology issues more generally, which is a major focus of this subcommittee.

Since our taskforces that Mr. Lynch and I were involved in back in 2018 and 2019 on FinTech and on AI, today we want to continue that broad foundation regarding the state of FinTech today and, specifically, the innovative products and services that financial technology enables for our consumers.

My goal is for Members to use the time to better understand the FinTech ecosystem and its evolution from, when we were together 4 and 5 years ago, disruption to much more of a sense of collaboration, and how it can deliver products and services that consumers want and can benefit from, and the policy questions that we should be thinking about as lawmakers.

At a time when there are many exciting new technologies like digital assets, quantum computing, and the greater use of artificial intelligence, it's important to remember that innovation and technology have always been at the heart of financial services.

That's true even of the humble ATM, which changed the way we thought about cash and credit, how we pay for things, how we have access to money over the past 50 years, to access that cash whenever we wanted it, whenever we needed it, and that was no small feat back in that 50 year ago timeframe.

But like the ATM, I believe that FinTech today has the potential to drive even greater innovation in financial services, while also delivering even more customer-centric experiences based on trust, convenience, and service in an increasingly digital world.

For example, Earned Wage Access products allow people to--as the name suggests--access their wages as they earn them. This can give people the flexibility and liquidity to meet short-term credit needs, like when a bill is due next week but payday isn't until the end of the month.

The same goes for bank-fintech partnerships, which are a great way that community banks in Arkansas are meeting customer demand through new products and services at scale through white-label offerings.

Or Buy Now Pay Later products, like the old layaway systems which many of us grew up on, which give consumers a technological way to have choice at checkout and more flexibility to pay on their own schedule in a way they can easily understand.

The massive rise in popularity of these kinds of financial products demonstrates that consumers already recognize how these innovations are improving their own lives.

However, changes driven by technology also merit thoughtful consideration of how they affect existing laws and regulations, particularly when laws and regulations inhibit that innovation.

The key is that we have balance between both consumer protection and innovation. That being said, I think the benefits that fintech firms--and the products and services they provide--far exceed the risks they pose.

That's why I am excited about the bills attached to this hearing that talk about our regulators, the sandbox innovation centers and our regulators, and their evaluating their own technological prowess.

I'm looking forward to hearing from our excellent witnesses today about how FinTech enables innovative financial products and services that consumers want, and what lawmakers should be thinking about to make sure we get the balance between innovation and customer protection just right."

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