Hill Delivers Remarks at Hearing to Examine How Agencies Can Leverage Technology to Shape the Future of Financial Services
Washington,
December 5, 2023 -
Today, the House Financial Services Subcommittee on Digital Assets, Financial Technology and Inclusion, led by Chairman French Hill (AR-02), is holding a hearing entitled “Fostering Financial Innovation: How Agencies Can Leverage Technology to Shape the Future of Financial Services.”
Watch Chairman Hill’s opening remarks here.
Read Chairman Hill’s opening remarks as delivered:
"Today’s hearing is titled, 'Fostering Financial Innovation: How Agencies Can Leverage Technology to Shape the Future of Financial Services.'
"The story of America is about technological innovation and the application of the American work ethic and capital over our 250-year history–steam, rail, telephone, air radio, television, fission, IT, the chip, all these things, vaccines, are all because we allow innovation we facilitated in our society.
"Today, new and emerging technologies like digital assets, distributed ledgers, quantum computing, and greater use of artificial intelligence are dominating discussion.
"We have to remind ourselves that innovation has always been at the heart too, for financial services.
"In fact, financial technology, or 'FinTech,' as we call it, is hardly new.
"With the advent of the credit card in 1950, the first ATM in 1967, the first electronic securities exchange in 1971, computer-based access to bank accounts in the 80s, and peer-to-peer payment processors in the 90s, innovation has been transforming our relationship between consumers, businesses, and their financial service provider, and their money.
"But today we want to talk about how government agencies, while they're not at the forefront of innovation frequently, they definitely can stop innovation dead in its tracks.
"We recall President Reagan's very fond conversation about what he thinks government thinks of the economy, 'if it moves, tax it, if it keeps moving, regulate it, and if stops moving, subsidize it.'
"And that is the challenge we always have here in Congress is making sure that we facilitate innovation, that we work with our regulators to do that.
"Over the years, Congress has added ombudsman in agencies just to represent the people that are regulated, to make sure they get a fair shake.
"We've added cost-benefit analysis through the Administrative Procedures Act to make sure that the rules that are pronounced actually make sense and have some common-sense associated with it, and of course, we apply our oversight capability, which we're doing today.
"It was only a few years ago that some of your agencies began establishing specific offices dedicated to facilitating responsible innovation. Many of you lead those offices at your respective agencies.
"This hearing is the first time that the Committee has called each of you to testify about your agency’s work relating to innovation. Regrettably, when I look at the Government Accountability Office's recent report, maybe some of that progress is lacking, so we'll have a good discussion about that today.
"Let me recap the actions taken by President Biden's regulators:
"The Fed announced a Novel Activities Supervision Program in August for enhanced supervision on new activities relating to fintech and digital assets.
"The NCUA established its Office of Financial Technology and Access in January this year. While the office is engaging with stakeholders and hosting public presentations, it has yet to establish a workforce planning process to ensure the staff have the knowledge and skills necessary to carry out its mission over fintech.
"The CFPB’s Office of Innovation was founded in 2018 to encourage consumer-friendly innovation but was replaced in 2022 by the Office of Competition and Innovation, and two of the most innovation-forward policies that were previously established, were discontinued.
"The OCC, the earliest regulator to establish an innovation office in 2016, but when the office was dissolved into the Office of Financial Technology in March, an individual who reportedly lied about his extensive industry experience and education was placed at the helm, so maybe we should have some oversight of that too.
"I look forward to the discussion today."
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