FHFA announces Office of Financial Technology
The Federal Housing Finance Agency (FHFA) Monday announced the establishment of the Office of Financial Technology, which will serve as a source of information to support the FHFA in assessing risks of emerging fintechs. NAFCU has long supported innovation in the financial marketplace and a level playing field between credit unions and other non-bank entities.
The office will also assist the FHFA on the following initiatives:
- develop strategies for FHFA’s regulated entities to safely and responsibly advance housing finance fintech and innovation;
- engage with market participants, industry, nonprofits, consumer groups, and academia to share best practices around fintech and housing;
- establish and promote housing finance fintech and innovation:
- facilitate interagency collaboration with other regulators and regularly share information; and
- serve as resources for innovations, general trends, and emerging risks.
“When used responsibly, fintech has the potential to improve borrowers’ experiences with the mortgage process by reducing barriers, increasing efficiencies, and lowering costs,” said FHFA Director Sandra Thompson. “The new office will help advance effective risk management as FHFA evaluates applications of fintech in housing finance, as well as in compliance, and regulatory activities.”
“Appropriate oversight and a clear understanding of potential risks regarding fintech mortgage lending is an important part of cultivating an innovative and competitive financial marketplace. NAFCU supports credit union/fintech partnerships but also encourages the FHFA to thoroughly examine the risks that underregulated housing finance fintechs, including both well-established firms and startups, pose to consumers and the entire housing finance system,” stated NAFCU Vice President of Regulatory Affairs Ann Petros. “We look forward to our continued collaboration with the FHFA and advocating for proper oversight of fintech institutions.”
Of note, FHFA issued an accompanying request for comment (RFC) seeking public input on the role of technology in housing finance to gain a broader understanding of the level of innovation throughout the mortgage lifecycle. Comments to the RFC are due to the agency on October 16, 2022.
Additionally, the association previously shared with the FHFA its support for increased capital and liquidity requirements for non-depository sellers/servicers, noting that they are not subject to the same kind of safety and soundness exams as banks and credit unions, and the important effect these changes would have on the housing finance system as a whole.
NAFCU continues to work with the FHFA and other agencies to ensure appropriate oversight of fintech firms.
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