It’s a great time to start a business in Minnesota. During the recent Twin Cities Startup Week and the Future Finance Forum, Minnesotans came together to share ideas and celebrate our status as the startup capital of the bold north.
Minnesota has already become a leader in several industries — from medical innovation to agriculture — but one area that continues to show new promise is in financial technology, or “fintech.” Financial technologies are enabling convenient access to financial tools and improving the ability for us to plan and invest for our future. In 2015, using your phone to pay at a store amounted to only a little more than $8 billion in annual transactions. This year, we are on pace to reach $210 billion. New technologies are enabling financial empowerment, additional access to credit, and new areas for capital formation. After thousands of years of banking, the industry is facing a revolution that could dramatically advance individual empowerment.
Power to the individual
These new technologies are nonpartisan and help all Americans. Republicans and Democrats alike should take the time to learn about new innovations in our economy, and the ways they can assist those who have previously struggled without access to banking services. This impact is even more pronounced abroad, where 1.7 billion people remain unbanked. Financial innovations provide power to the individual, and a means to a better life.
[image_caption]Rep. Tom Emmer[/image_caption]
In Washington, I recently became the Ranking Member of the Financial Services Committee’s Financial Technology Taskforce. This Taskforce gives Minnesota a seat at the table as we consider ways to promote innovation and investment in American fintechs.
‘Gig’ economy income verification
There are several bipartisan fintech opportunities I have already advocated for on the taskforce. For example, I introduced the Self-Employed Mortgage Access Act, which would provide additional ways for individuals working in the “gig” economy (for example, Uber and Lyft drivers) to verify their income and be able to afford a house. Our laws have not kept up with the sharing economy, and this bill would ensure those who participate in it have access to a critical part of the American Dream.
In addition to offering legislation, I am also a co-chair of the Congressional Blockchain Caucus, a group of members interested in educating Congress about this emerging technology and advocating for government’s light-touch approach. After taking this leadership role, I introduced the Blockchain Regulatory Certainty Act, legislation designed to free blockchain innovators that do not take control of anyone else’s funds from unnecessary regulation.
Agencies supporting innovation in finance
Government is typically slow when it comes to recognizing and responding to new innovations. However, federal agencies are also taking several steps to support American innovation in finance. The Commodity Futures Trading Commission (CFTC) has launched LabCFTC, which aims to reach out to fintech companies and actively learn about how to develop tailored regulation that supports investment in US companies. The Consumer Financial Protection Bureau (CFPB) recently announced several plans to facilitate innovation and provide regulatory certainty to entrepreneurs. The Office of the Comptroller of the Currency (OCC) has been accepting national bank charters for fintech companies. The Securities and Exchange Commission (SEC) has established a Strategic Hub for Innovation and Financial Technology, known as FinHub, which provides active engagement with the industry to facilitate proper regulation. These are all encouraging steps by our federal regulators as financial technology emerges in almost every aspect of our lives.
And although there will always be concerns regarding consumer protection as it relates to fintech, we must keep in mind that innovation and consumer protection are not mutually exclusive. In fact, new and imaginative innovations can facilitate and enhance consumer protections. These technologies stand to dramatically reduce fees, build credit histories, and enable access to loans for those previously excluded.
Minnesotans can and should help lead the next digital revolution. Change is coming in the ways we use money and the financial opportunities available to us. We have an opportunity to embrace this change and foster these new innovations. I applaud those who organized Twin Cities Startup Week, and hope it will serve as an inspiration for many Minnesotans to learn about these new technologies and make us a major capital for yet another industry.
Rep. Tom Emmer represents Minnesota’s Sixth District in the U.S. House of Representatives.
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The first of the two CFPB links provided mentions regulatory burden several times. The second announces a new policy for No-Action Letters (NAL):
“NALs provide increased regulatory certainty through a statement that the Bureau will not bring a supervisory or enforcement action against a company for providing a product or service under certain facts and circumstances.”
The announcement of the policy coincides with the first issuance of a NAL.
I don’t think the reason the CFPB exists is to streamline regulations for the finance industry.
The fact that you chose those two examples suggests that you feel regulation is the main problem.
I’m skeptical.
Agree we should support innovation…including solar and wind energy…something repubs like Emmer will not do…giving other countries great advantages in research in these areas.
Solar and wind have maxed out. Worldwide implementation continues to slow as we are realizing they will not provide more than 10% or so of our power while requiring unsustainable acreage to perform their task.
All-in-all, they are not sound investments.
What utter nonsense.
Sorry, I meant subsidized.
This seems like an odd industry to trumpet as a MN opportunity. For one thing, saying our number of financial services employees is higher than the national average without adjustment for state population levels just means were better than at least half the other states – that doesn’t signal significant competitive advantage.
These are also industries where a disruptive company can come from anywhere and with relatively few employees create a large virtual presence – unlike the food or tech clusters we have here today.
Meanwhile we do have a strong need to be a player in clean energy to help diversity away from dying industries like mining….. that is something Emmer should be pushing with true sustainable impact to ensure Minnesota is relevant in the critical markets of the future.
Aaaaand this is how create bubbles in the financial industry that go “pop” and ruin lives. It’s amazing how “slow” and out-dated government regulations can when you don’t believe in regulations and do everything can to hobble government attempts to keep up. Then miraculously we “realize” that the government doesn’t really need to keep up… they just need to get out of the way! Never heard THAT before.
Just not in your district, Tom.
So proud that I can pay my massive student loans, debt collection agencies, and get a payday loan from my pay-to-go phone that sends all of my activity directly to the NSA. Thank you for your brave service Sir!!!!
GOD BLES PRESIDENT TRUNP
I thought Florida was the “capital of ‘fintech’ innovation”, and not in a good way…
A few questions:
1) Wasn’t it financial innovation(s) that gave us the financial crisis of 2008 and the Great Recession?
2) Will banking and conducting financial transactions become cheaper as a result of “innovation”, or will they cost even more?
3) Will financial innovation result in even greater concentration of wealth in the hands of the banking cartels and/or the financial industry?
4) Will financial innovation like cryptocurrencies increase the opportunities for financial crimes like tax evasion, counterfeiting, bribery, and money laundering?
All in all, financial innovation looks like it will be a boon to those whom Teddy Roosevelt called the “Malefactors of Wealth. ” Which explains why Republicans are in favor.
Fintech is code for “legal” tax evasion. Fintech employs few and pays poorly (except for the top guys). South Dakota has decided to play that game to the benefit of pretty much no one in the state (except the politicians). No thanks. There’s a reason I won’t ever go back there. A better opportunity is manufacturing. Like clean energy (not “clean coal”, that’s a myth) manufacturing.