“The Federal Reserve's newly created Novel Activities Supervision Program reflects the growing role of technology and innovation in the Financial Services sector. AFC is supportive of the Federal Reserve's efforts in ensuring the safety and soundness of the nation's financial institutions is maintained, while recognizing the benefits of new technology and innovation, which can increase competition, reduce latency, increase efficiency and reach consumers historically left behind by the traditional financial system.

While the guidance is another important step towards transparency and the standardization of requirements expected by supervised institutions advancing innovation through technology, the Federal Reserve should continue to work with companies to establish thorough and detailed standards as to the Program's function, eligibility requirements, associated guidance and rulemaking, and expected supervisory activities.

It is critically important that this program be as transparent as possible, and that clear standards are established and communicated before enforcing supervisory views on banking institutions. Without clear and established standards, regulators risk deterring innovation and inconsistently applying requirements across institutions leading to a lack of clarity and the potential for unfair outcomes. At this critical juncture for fintech companies and the banks that power them, pragmatic regulators combined with responsible innovators have a unique opportunity to truly shape the future of finance. We thank the Federal Reserve for their collaboration and partnership and appreciate their commitment to maintain a constructive dialogue with diverse stakeholders.

AFC has long advocated for regulatory modernization that promotes innovation but also holds innovators accountable to being responsible and transparent. Modern and forward-looking regulation will strengthen the banks and fintech companies that innovate without compromising on consumer safety. We urge other federal regulators to follow suit and provide the regulatory clarity that can streamline the current patchwork of rules and regulations to ensure fair and consistent enforcement throughout our industry.”