• The Treasury Department on July 31 released a major report identifying improvements to the regulatory landscape intended to better support nonbank financial institutions, embrace financial technology and foster innovation. Titled "A Financial System That Creates Economic Opportunities: Nonbank Financials, Fintech, and Innovation," the 222-page report is the fourth in a series issued in response to an executive order signed by President Trump in February 2017 mandating that Treasury identify laws and regulations inconsistent with the Administration's core principles for financial regulation. A four-page Treasury fact sheet identifies four key reform principles:
    • Embrace the efficient and responsible use of consumer financial data and competitive technologies.
    • Streamline the regulatory environment to foster innovation across business models.
    • Modernize activity-specific regulations.
    • Facilitate experimentation.
  • The recommendations include working with federal and state regulators to design a regulatory sandbox system to establish a unified regulatory approach to help foster meaningful experimentation with innovative financial services. There are a series of proposals to modernize rules for digital communications, improve consumers' access to their financial data while strengthening the security of that data, facilitate the adoption of trustworthy digital legal identity products and services and modernize regulation of technologies like cloud computing. But one of the report's more controversial recommendations is a proposal that the CFPB rescind its Payday Rule, which has come under criticism from both Representative Waters and the senior Democrat on the Senate Banking Committee, Senator Sherrod Brown (D-OH). Former Obama Administration Treasury official Aaron Klein, now at the Brookings Institution, who praised many of the report's other points, expressed regret that "the Treasury Department chose to politicize the report by the call to repeal the payday lending rule, which is not really a fintech issue."