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Blog Post | January 22, 2021

Fintech’s Gaze Into The Biden Administration

2020 Election/TransitionFinancial RegulationFintechTech
Fintech’s Gaze Into The Biden Administration

As President Biden continues to staff his administration, the nascent fintech industry will be keeping close watch on the personnel appointed to key regulatory positions. A broad range of regulators, including, the Treasury Department (especially the Financial Stability Council, Office of the Comptroller of the Currency, and Financial Crimes Enforcement Network); Commodity Futures Trading Commission; Consumer Financial Protection Bureau; Federal Deposit Insurance Corporation; Federal Reserve and the Securities and Exchange Commission, all have a role to play in regulating an industry that poses data, privacy, lending and financial stability risks. 

It would be prudent to keep private fintech evangelists away from the positions that are responsible for regulating these firms and cryptocurrencies. In this blog, which we will update frequently, we will monitor such individuals and their links to the Biden administration.

1. Michael Barr

According to the Wall Street Journal, Biden plans to tap Michael Barr to lead the Treasury Department’s Office of the Comptroller of Currency. News of his potential nomination was met with glee by the industry. Barr served as an advisor to two scandal ridden firms, Ripple and LendingClub, and currently advises the Alliance for Innovative Regulation (AIR) – a fintechfunded group that aims to overhaul financial regulation.

The Barr-advised AIR and other OCC-focused fintech trade groups hope to introduce surveillance technology as a replacement for Know Your Customer regulations. Another closely associated firm, Ripple, which wants to be the “Amazon of Payments” and funds AIR, currently faces an SEC lawsuit.

2. Chris Brummer

Georgetown law professor Chris Brummer recently emerged as the leading candidate for Commodity Futures Trading Commission chair, according to Reuters. Brummer is one of the more prominent academic champions of fintech. He hosts the podcast FintechBeat, which “covers the most recent developments in issues concerning the fintech community.” Brummer also organizes DC Fintech Week, which seeks to bring “entrepreneurs and thought leaders across the financial ecosystem together with the regulatory community.” Like Barr, Brummer is also on the Alliance for Innovative Regulation’s advisory council. He was part of the Biden transition’s Treasury Department agency review team.

3. Manuel Alvarez

Manuel Alvarez is the Commissioner of the California Department of Financial Protection and Innovation (DFPI). The onetime Consumer Financial Protection Bureau (CFPB) enforcement attorney served on the Transition’s CFPB agency review team. As California DFPI Commissioner, Alvarez supported an overhaul of the state’s industrial bank licensing laws to make it easier for digital companies such as Square to obtain industrial bank charters.

Prior to his current stint as DFPI commissioner, Alvarez was the general counsel and chief compliance officer of a fintech company, Affirm. The firm offers high-interest microloans (as high as 30 percent on subprime loans) to unassuming consumers and has been criticized for encouraging consumers to buy products they cannot afford. In other words, Affirm has a business model similar to the payday lending industry which Alvarez would have regulated at the CFPB. Affirm was founded by Paypal co-founder Max Levchin and Palantir co-founder Nathan Gettings. Levchin is considered the “consigliere” of the so-called “Paypal Mafia” of tech entrepreneurs, which includes the other co-creator of Palantir, Peter Thiel — a far-right figure who prominently supported Donald Trump in 2016. Thiel also backs Affirm through his venture capital firm Founders Fund.

4. Amy Friend

Amy Friend served as Senior Deputy Comptroller and Chief Counsel at the Office of the Comptroller of the Currency from 2013 to 2017. In that role, she led the push for a special purpose fintech national bank charter. The move was strongly opposed by Senators Sherrod Brown and Jeff Merkley, who stated “offering a new charter to non-bank companies seems at odds with the goals of financial stability, financial inclusion, consumer protection, and separation of banking and commerce that the OCC has upheld under your tenure.” Trump appointee Brian Brooks advocated for a similar measure in his short tenure as acting comptroller despite strong opposition from various state regulators.

Since leaving public service, Friend has become a key player in the fintech industry. She is a senior advisor at FS Vector (a fintech advisory firm), a board member at Varo Bank (an online-only bank) and FinRegLab (a pro-fintech think tank). Friend also sits on the advisory council of the Alliance for Innovative Regulation.

5. Gina Raimondo

Gina Raimondo is the governor of Rhode Island and Biden’s nominee for Secretary of Commerce. Rhode Island is heavily invested in Raimondo’s own former venture capital fund, Point Judith Capital, recently rebranded as just “PJC.”. The state pays higher-than-industry-average fees to the fund, some of which Raimondo still receives. Although the fund had no proven track record before the state’s investment and has continued to underperform safer assets, Raimondo has twice extended Rhode Island’s investment deal with her former fund. 

PJC’s portfolio includes three fintech firms – BlockFi, Openly and Lively.

2020 Election/TransitionFinancial RegulationFintechTech

More articles by Timi Iwayemi

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