Both Tim Madsen and I were in Washington DC last week attending the Online Lenders Alliance Government Relations Summit. Speakers ranged from Legislative Assistants, Economic Policy Advisors, Regulatory Agencies to Attorney Generals and Congressman. Adding to this was a day and a half on the Hill meeting with Banking, Financial Services and Commerce Committee Members.
The over-arching purpose was to promote a diverse and responsible marketplace for access to innovative online financial services (lending) through education, communication, collaboration and advocacy with policy makers and opinion leaders.
More focused discussions were found around:
Fintech Regulatory Bill of Rights – Targets the CFPB. Aimed at fostering innovation, investment and increased competition in financial services markets with a focus on supervision and clear regulatory guidance, rather than aggressive enforcement action.
Lead Generation / Google – Google changed its Financial Service Ad-word policy last July, effectively blocking short-term lenders from advertising. There is little to no communication on this issue with regulators or Google. Lead generation is the lifeblood of online lenders, they are looking to curb this overreach into other financial products.
Operation Chokepoint – This multi-agency effort has blocked the online lending community’s access to the banking system. Congressman Luetkemeyer (R-MO) is introducing new legislation to end this regulatory overreach.
The hallmark of the OLA Spring Summit was meeting with policymakers, legislators and senior staff on Capitol Hill to promote their mission to lawmakers and discuss the biggest issues facing the industry. OLA member companies provide alternative credit options that consumers demand and are legal under each State licensing; they need to continually tell their story.
Our meetings on The Hill were with Banking and Commerce Committee members and their legislative assistants discussing fintech and lead generation. There were over 90 meetings scheduled, attended by other OLA members as well.
The consensus of the discussions was:
CFPB – Only one thing is certain for now – Trump’s Executive Order was the first official step towards a long, grueling battle over CFPB reform. All discussed the unprecedented regulatory authority over the housing industry that must change. All agreed a more business friendly CFPB Director was required or replaced with a bipartisan five-member panel. All had the same mantra – empower Americans to make independent financial decisions and informed choice. The Financial Choice Act was being marked up last week, subsequently approved by the Financial Services Committee – the CFPB Director is turned into a political appointee among many other changes associated with Dodd-Frank.
Consumer Data – Repeatedly brought up as an issue as it related to the lead generation (they all call it lead generation) topics. There is tremendous confusion around what lead gen companies to do with consumer data and what the consumer “perceives” happens to their information. Not all big fans, lots of education to do here.
Fintech and Online Lending – Generally supportive of the developments in the fintech space as it intersects online lending. Interesting comments around millennials choosing to work at and use these new financial developments, as opposed to the old Bank networks. This group lengthened the conversation here and supported the new technologies making it easier for consumers and saving them money on these products.
We heard from Mark Calabris, Chief Economist for VP Mike Pence. He probably had the most interesting take on Washington – not a lot is going to get done until the staff gets hired, don’t look for sweeping changes to start for about a year. He kept saying “people are policy or policy is people”. No doubt pro-business, deregulation in financial services.
Tom Pahl, Acting Director, Bureau of Consumer Protection, FTC spoke. Approachable and very forward, he wants to escalate communication between the Agency and companies. Two things that are foremost going forward and he couldn’t be clearer, repeating this over and over. Misleading advertising and consumer data. We have surmised for a while around consumer data and this agency, they are working hard here to understand what’s happening in the marketplace. Look for changes, we should be providing input where we can.
We also heard from Dan Smith, Director, Office of Financial Institutions and Business Liaison, CFPB. Again, another approachable senior official. He understands the agency will change and they are escalating CID investigations through this year – the dust will settle somewhere.
I’ve been impressed with The Online Lenders Alliance (OLA) over the years. As the center for lending, technology, and innovation, OLA sets industry standards and best practices by which members operate, ensuring that customers are fully informed and fairly treated. OLA also serves as a resource to federal and state policymakers on issues related to access to credit – not a huge PAC, but effective.
OLA was founded during the “payday” regulation escalation several years ago and has begun to morph into an online lending / fintech focus. While there are a few marketplace lenders here, they do not get involved in securitization issues. I was surprised how well they were regarded in Washington, no doubt they have spent many years effectively lobbying.
We learned a tremendous amount about Government Relations and lobbying efforts last week. The meetings and contacts are not an issue, we can get into most places we need to – these representatives and policymakers want to hear from business in the “real” world. But, you need to be focused on your agenda, concise in your message and handouts and repeat over and over. There is certainly an enormous financial policy reset happening this year. I don’t think we should under-estimate getting out in front of potential issues and positioning Leads Council as a leader nationally on issues related to lead generation, performance marketing and customer acquisition – whatever you want to describe it as.
Here are some directions we are discussing and are considering taking going forward that relate to Government Relations within LeadsCouncil:
- Being a trusted and go-to resource for federal and state policymakers on issues related to lead generation and consumer data.
- Champion an issue related to the above.
- Align with and support other lobbying and PAC efforts
We need the continued support of One Voice for our Industry.
More to follow and thanks. BC