In recent letter and subsequent engagements, AFC has expressed concerns over potential consumer harm, unnecessary regulatory burdens, and implications for financial innovation stemming from new state guidance

Columbus, OH (January 14,2025) – The American Fintech Council (AFC), the premier industry association representing responsible fintech companies and innovative banks, sent a letter to Kevin R. Allard, Superintendent of the Ohio Department of Financial Institutions (DFI), requesting clarification on recently issued guidance pertaining to bank-fintech partnerships. AFC’s letter raised concerns regarding the potential consequences of this guidance, including regulatory uncertainty, market disruption, and reduced access to responsible credit options for Ohio consumers. Although the department has opened a dialogue and provided additional time for registration for those required to obtain a license, uncertainty remains for Ohio borrowers and responsible companies providing critical access to financial services.

“The Ohio Department of Financial Institutions’ shift in policy threatens to undermine years of progress in fostering responsible innovation and expanding access to credit for underserved communities,” said Phil Goldfeder, CEO of AFC. “We commend the department for their attention to this matter, but urge further consideration and immediate updated guidance that ensures fair and effective regulatory oversight of responsible bank-fintech partnerships.”

The guidance represents a reversal of long-standing policy interpretation, which previously did not subject fintech companies partnering with a financial institution to licensing under the Small Loan Act (SLA). This shift risks disrupting established practices, substantially reducing access to affordable credit, and imposing significant and unnecessary compliance burdens on responsible and innovative companies. AFC also raised concerns regarding the lack of a formal public comment process, emphasizing the need for transparency and stakeholder engagement in such substantial policy changes with significant potential for consumer harm.

“The regulatory changes outlined in the guidance create unnecessary uncertainty for innovative financial institutions and threaten to reduce competition and innovation in the market,” said Ian P. Moloney, SVP and Head of Policy and Regulatory Affairs at AFC. “We respectfully request the Department provide clarity on its rationale and extend compliance deadlines to allow affected companies sufficient time to adjust.”

AFC’s letter calls on the Ohio DFI to rescind the guidance or, at a minimum, grant a 120-day extension for companies to comply with new licensing requirements. This extension would align with standard practices in other states and help ensure a smoother transition for impacted stakeholders.

A standards-based organization, AFC is the premier trade association representing the largest financial technology (Fintech) companies and innovative banks offering embedded finance solutions. AFC’s mission is to promote a transparent, inclusive, and customer-centric financial system by supporting responsible innovation in financial services and encouraging sound public policy. AFC members foster competition in consumer finance and pioneer products to better serve underserved consumer segments and geographies.

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