WASHINGTON : Partnerships between banks and financial technology companies are a net-positive for consumers when done responsibly, the Treasury Department will say in a report due on Wednesday.
Although there may be gaps in how those relationships are regulated, a Treasury official said on Tuesday, partnerships between banks and fintech companies have given rise to new products targeted at specific communities that traditional financial institutions have not previously catered to. Regulators can both encourage competition and protect consumers largely with existing authorities, Treasury Secretary Janet Yellen said in a statement provided to Reuters ahead of the report.
Although that guidance was proposed by banking regulators, the Treasury report suggested that other federal agencies including the Consumer Financial Protection Bureau and the Federal Trade Commission could also play a role in overseeing the partnerships.