Fed policymaker cautious about fintechs involved in ‘shadow banks’ | Auto Remarketing Auto Fin Journal


A member of the Federal Reserve Board of Governors took a cautious approach on two fronts during a public appearance last week.

Michelle Bowman was guarded about the possibility of few banks in the marketplace. Bowman also was apprehensive about the growing number of what she called “shadow banks” operate with capabilities driven by fintechs.

Bowman explained her positions during the Wharton Financial Regulation Conference in Philadelphia.

“Many banks have focused more of their activities and services on technology and innovation, with a corresponding increase in risk, including cybersecurity and operational risk,” Bown said in her prepared remarks. “These trends will likely have significant consequences. Some of these are predictable, like limiting the availability of banking services to underserved communities. Others are indirect, like encouraging acquisitions through charter strip applications and pushing activities outside of the federal and state bank supervisory and regulatory perimeter.

“These trends may signal dysfunction in the de novo…

Read more…