Jan. 8, 2025

Open Banking and the Road Ahead: Post-Election Insights

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As technology evolves, open banking is reshaping how we manage and share financial data, creating exciting opportunities for innovation and better services.

In today’s episode, host Matt Snow welcomes Armen Meyer, Co-founder of the American Fintech Council, to explore the world of open banking. Together, they discuss the opportunities and challenges this transformation brings, from balancing innovation with preventing monopolies to what’s next for consumer protection and data privacy.

Armen also shares some key post-election insights, exploring how recent political shifts may impact financial regulations, CFPB oversight, and potential rule changes that could shape the future of the industry.

Join us as we discuss:

  • The role of balanced regulation in fostering innovation in financial services.
  • How open banking promotes transparency, and the challenges smaller banks face.
  • Key political and legal developments that could influence fintech regulations and the CFPB moving forward.
WEBVTT

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You're listening to Leaders in Lending from Upstart, a podcast

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dedicated to helping consumer lenders grow their programs and improve

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their product offerings. Each week, here, decision makers in the

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finance industry offer insights into the future of the lending industry,

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best practices around digital transformation, and more. Let's get into

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the show.

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Hello, welcome to another episode of Leaders in Lending. I'm

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your hopes this week met Snow Join again by Arman Meyer. Arman,

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good to see you again, Welcome back.

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Thanks having back. I'm honored to be back three days

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after an election that was wide open, so I hope

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there are many curve balls in this conversation. I'm looking

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forward to it.

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I know it's funny it is Friday, so you know,

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the election just a few days ago. The last time

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we spoke was around the CFPB and challenge to their

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existence and funding, and a lot's changed even since then.

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You know, we've been keeping in touch thinking about open banking,

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which we'll get into. But you know, with the election,

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as it tends to do, it changes the perspective on

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a lot of things. So I think we got a

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lot of ground to cover. But maybe why don't you

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start we didn't really do a proper introduction to the

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audience last time.

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Why didn't you give a little bit of your background.

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I think it will help people understand the depth that

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you bring to a technical and robust conversation like the

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one we're about to have.

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Oh that's nice to you. Well, I guess I'm known

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for my role Lending Club for about six seven years

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and started the American FINTAD Council to our current audience.

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But before that, I had a role at PwC where

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I was kind of guy who was to analyze these

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election outcomes for our large bank clients and kind of

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put in perspective like what could happen. In fact, I

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actually just read the one we did back in twenty

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sixteen when Trump went the first time. Good news. Not

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much relevant today except for a couple of points, So

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not much revegetation. But I think some of that might

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be helpless conversations, some of the views of what we

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saw regulators and new advisors do back then. Before that,

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I was chief of staff a New York's bank regulator,

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helped his transition to become the Department of Fancial Services.

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Left soon thereafter and got a front seat to the

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financial crisis. During that period, I was kind of doing

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work for the Governor of New York when the crisis hit,

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and started doing a lot more work in fancial services

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to see what we could do as a state to

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make regulation work right in the future. And before that

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did have several roles advising congressmen and governors and candidates

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for office on broader political strategy and policy for a

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few years. After law school, I was a lawyer for

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one year in my life and clear that was not

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my calling. But every now and then it's fun to

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grab that and use it in conversations like this one year.

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Okay, I've got an eighteen year old looking at colleges

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now with an eye towards law school. We'll see, you know,

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he's in an internship right now, and we'll see if

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he makes it longer than a year where he ends

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up filming.

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Happy to talk to him, warn him or depending on

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everyone has a wrong motivation. I think in the beginning,

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you don't really know what you're getting into it until

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they get into it. I should mention that lately, for

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a year now, I've been I left lending call about

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a year ago, and I've just been advising a lot

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of companies in gen AI in fintech, and I meet

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some folks a couple of enture capitalists started to find

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a few months ago investing in AI foundation models and

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impact in financial services and fintech space. It's been pretty

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fun year. And have my own consulting for now focusing

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on financial health outcomes. Have a few clients who are

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really interested in kind of bulletproofing products and that's been

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a reallyjoying thing to be able to do as well,

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and very relevant to changing regulations. I think height you

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approach those clients and conversations.

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Yeah, absolutely, and AI certainly, you know in the news

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a lot lately and a fun topic to dig into.

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But I've been surprised, you know, open banking maybe not

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quite as much, but it seems to be trending and

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getting a lot more airtime lately as much as AI,

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especially in financial services, which made me go back and

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do a little bit of like history researching and reminiscing

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because I was also actually at a bank during the

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Great Financial Crisis, and a little bit of like PTSD

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going back through and reliving some of those as I

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was thinking about open banking, and you know, the dot

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Frank acted really the genesis of a lot of these

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you know, ten fifteen years ago and thinking about that,

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you know, hundreds of pages of regulation, Like why do

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you think it took so long to even today, you know,

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November of twenty twenty four, fifteen years later, to get

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to any kind of a conclusion or i hate to

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say resolution now that we've had an election and things

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are likely to change again, but you know what took

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so long for that piece of the bill to actually

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come to some kind of anion.

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And if you believe it, there were a couple others

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this year that got finalized. So this this this past

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couple of years that also took a long time. Well,

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first of all, DoD Frank was huge or bazillion regulations,

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and from my time at PwC to my time at

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Lending Club, we were wondering why is it taking so long?

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And like one reason, of course is the obvious. You

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change administrations, things change, things get dropped. That really did

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delay a lot of dot rank implementation. You also had

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quite a anti regulatory bend. In fact, you had under

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for example, the CFPB, which we'll probably get into as

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we talked about ten thirty three and open banking take

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backs and regulations as opposed to promulgating regulations. So you

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definitely had not just changing, you had an anti regulatory environment.

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But first and foremost is open banking was not the

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issue of the day coming out of the crisis. Commut

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of crisis something we talked about last time the mortgage

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market had blown up. How do we fix that? What's

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the new way to create an infrastructure so we don't

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have that again? Other types of regulation. What's a way

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of creating less asymmetry information between bank and customer said,

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the customer knows they're doing. And then other tide of regulation,

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how do we as simply ban conduct? We don't like

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those regulations got a front seat open banking. I would

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put in the infrastructure, but it wasn't about the mortgage, right,

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this is like the latest infrastructure regulation. Great to have,

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was not a priority. But glad we finally got there.

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Yeah, I'm glad you said that because I again, like

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I was doing a lot of research and I was

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having a hard time finding like how that even made

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it into a part of Dodd Frank or you think

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about in the transparency or separation of banking activities, Capital requirements,

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all those things that were tied much more to the

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issue at the day credit quality, and you know, being

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much more focused on those disciplines. What do you think

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led it to being a part of that? Like what

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were they trying to solve? It doesn't seem like there

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was a lack of competition that led to these issues

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in the banking industry or like consumers didn't have that

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much of a lack of choice. Is that is that

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something that's become more of an issue today, that is

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finally becoming a priority or was that an issue then and.

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Just maybe wasn't as high of a need to think about.

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You're straining my memory, but I do think a lot

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of actually directing Troper's reddick is reminding me that I

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think some of the initial ideas in ten thirty three,

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and I believe it's ten thirty four. I know it's

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ten thirty four. Section B perhaps is really about the consumer.

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So it's a consumer protection regulation in my three buckets,

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as well as an infrastructure regulation. But the consumer aspect

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probably drove it in that the consumer shouldn't have to

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pay to know about him or herself. And ten thirty

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four B has been implanted by a CFPB, not as

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a formal rule, and ten thirty three kind of follows that.

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But I think in time, as tech emerged, ten thirty

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three became a more important thing as we saw fintech

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evolving and used the APIs. So it did, and I'm

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almost feeding into the lawsuit against it, which we get too, Laida.

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I think the priority did change a little bit over time,

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but I do think both are in scope and both

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are very important.

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Yeah, have you seen any companies like try to fill

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this space ahead of the regulation, Like aren't some of

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the bigger banks doing this already? Or you talk about

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API enablement, like aren't companies coming in to fill this

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gap and give the consumer some of that transparency? Like

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do we need this kind of a regulation?

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I love the do we need a question? Because it

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is really interesting because other markets did have the privacy

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had to lead away, but we found in the US

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is first you had. Of course the screen scraping made

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is that the safest way or smartest way of doing this,

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And of course screen scraping does have not just data issues,

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which is for this comedy is probably most important thing

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where it's not always accurate. You can't always get it right.

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But two, you have, of course the idea of now

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given your crunch to the third party, it's going to

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sit there, and more issues of fraud and an intrusion

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in some data. But second, even on the API front,

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even when you're not doing screen scraping, APIs are not

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always reliable. You have to invest in an API. And

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part of the reason we're here today is this API

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technology and the ability to protect your API is way

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better than I probably was way back then. And then two,

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even with APIs that are robust, and a lot of

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times APIs are weird rules like is the data conversation

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the same on both sides? Is the API always available?

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Is it always functioning because it's well run? These are

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all the techniclogies that have gotten a way of even

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a non screen scraping world where Plaid and others went

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from screen scraping to actually going API based, and it

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still wasn't solving the problem if we actually want real

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good data on demand with the accuracy, so we The

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final one is everyone in the pool. Like you have

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the APIs, you have the screen scraping, but then who's playing?

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And then a lot of banks are now being encouraged

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to jump into this pool of sharing data, not as

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many as originally intended. Some have been carved out the

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smaller ones. But I think those are some of the

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three issues that this rule trying to address.

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Gotcha, you said a word that's jumped out to me

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and maybe to some of our other listeners who are

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on the industry side, you know, working at banks and

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credit unions invest like do you think this wouldn't they

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have already done this today, like if it was cheap

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or easy or accessible, Like is this going to require

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a lot of smaller mid sized banks to spend money

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that you know, maybe they don't have prioritized or how

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do they even think about like an investment in this

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space to be able to accommodate this.

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Well, we started off talking about generally I for one

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second and we talked about the last time, the data

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is more important than you got to have data before

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we can analyze something. See every foundational model. And I

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don't want to dismiss concerns on getting your API at

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the snuff or making its work or liability if things

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don't work. But the future is data and the data

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can't just sit in six big banks, because if it

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does we're all kind of screwed and that's the end

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of innovation. So there is a price to pay for

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innovation and a competitive marketplace. This is the price. But

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I will say give a CFPE credit. The implementation timeline

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is long. It goes all the way at twenty thirty.

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The smallest banks eight fifty million in assets in under

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are not included. I don't think a bank below ten

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billion has to do anything for at least a couple

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of years. And to our where we started, the tech

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is better and it's not like there's a random API provider.

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It's like this, this is a core provided thing. Now

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I'm not saying is the easier perfect I'm just saying that,

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like tech has moved us forward in a way and

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the need and we've seen the benefit sharing data on

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full display, and to squelch that is the wrong move,

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and to empower it is the right move. And there

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is a cost. But I'm glad to see that some

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banks have the options to day out of it. I

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think some people would be returnalists and say, oh, everyone

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should be in it because it's good for the consumer. Well,

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the consumers can move that, and that consumer moving is

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not easy, but we don't have to treat all banks

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the same.

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Yeah, that's a good point.

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And I've been trying to think of other like similar

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instances of this in the past, like maybe seacoil requirements.

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Can you think about other things where like there have

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been time to move through and kind of catch up

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or I.

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Think a lot of the implantation regimes have been focused

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on bank size, or I mean even the other regulation

247
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that I mentioned, there's other regulations that just came out

248
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see section ten seventy one. What's ten seventy one. It's

249
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small business lending transparency rulemaking. That also took a long, long,

250
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long long time, probably because small business lending is really

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not a core CFPD competency and it also was not

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irrelevant to the crisis, but a few were saying it

253
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was foundational or highly exacerbating of the crisis, so that

254
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also got de prioritized. And you do see major timelages

255
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and implementation there. And I think that's the right approach.

256
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All banks are not created equal, and if the goal

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the irony is the goal of open banking, and ten

258
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seventy one is to share data so that people get

259
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a better sense of who was provided the best product

260
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or can easily go to the best product. It would

261
00:13:46.159 --> 00:13:50.159
be funny, indeed, to have those same rules impost enormous

262
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costs and smaller players and wipe them out when we're

263
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trying to promote competition here. So we should have implementation

264
00:13:55.799 --> 00:13:57.759
timelines to help them out a little bit.

265
00:13:58.240 --> 00:14:01.039
Yeah, well, I was thinking about that too, Like what

266
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what do you think do you have any predictions on

267
00:14:03.559 --> 00:14:05.399
what may happen as a result of this, Like do

268
00:14:05.440 --> 00:14:08.600
you think there will be more M and A activity,

269
00:14:08.679 --> 00:14:11.240
Like will there'll be some that just can't or don't

270
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want to compete in the space and you know, the

271
00:14:13.759 --> 00:14:16.039
bigger players will will gobble them up, or you know,

272
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in the middle of the market, more consolidation, you know,

273
00:14:19.799 --> 00:14:22.360
other tech companies fill this need, or like what do

274
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you see as a maybe a reactive I.

275
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Think the open banking driver on M and A is

276
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not significant in your term compared to other factors. And

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the number one factor, which I'm sure we'll get to,

278
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is the change that's going to occur the fd I

279
00:14:42.039 --> 00:14:45.799
C and E OCCU and then more broadly at the

280
00:14:45.879 --> 00:14:50.399
FTC for M and A activity and others are declining

281
00:14:50.440 --> 00:14:55.159
interest rates and more of a sense of the recession

282
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is not coming. If that's true, that's the way it looks.

283
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So I think these factors will be much more drive.

284
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The other thing on open banking to have it that's

285
00:15:03.840 --> 00:15:07.000
come up is we'll open banking drive a M and

286
00:15:07.039 --> 00:15:11.440
A or will in fact make the financial system less

287
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stable because open banking course does two things. One is, hey,

288
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I'm a customer. I'm at pick your biggest bank, my

289
00:15:22.320 --> 00:15:26.080
old employer, lending Club or your employer upstart wants to

290
00:15:26.679 --> 00:15:29.639
make a loan to the customer, but needs that data

291
00:15:29.679 --> 00:15:33.000
at JPM or whatever to help make that loan because

292
00:15:33.039 --> 00:15:35.120
of the help reduce the cost of credit. That's like

293
00:15:35.159 --> 00:15:38.519
the class example, and the customer should be allowed to

294
00:15:38.559 --> 00:15:40.720
give that data to do that. But the other one

295
00:15:40.879 --> 00:15:43.840
that has come up in terms of could it create

296
00:15:43.919 --> 00:15:48.720
bank runs is lending Club bank I think has a

297
00:15:48.720 --> 00:15:53.080
great apy compared to a JPM, And so why don't

298
00:15:53.120 --> 00:15:55.360
people now take their data which we don't want to

299
00:15:55.440 --> 00:15:59.000
trap at JPM and bring it to another bank to

300
00:15:59.039 --> 00:16:02.799
get a better ape, maybe a better experience overall. Is

301
00:16:02.840 --> 00:16:06.480
it a positor or maybe better products? Something have said

302
00:16:06.519 --> 00:16:09.639
similarly like will that really changed the world? And I'm

303
00:16:09.720 --> 00:16:13.279
kind of like not really, not really. There's so many

304
00:16:13.279 --> 00:16:16.399
ways in which there are tendrils in bank deposits that's

305
00:16:16.440 --> 00:16:19.039
too hard to move. You got to reset up your

306
00:16:19.120 --> 00:16:23.559
VENMO payments. Open banking solves some of those, but not enough,

307
00:16:23.960 --> 00:16:25.879
and we're not going to see massive runs because of

308
00:16:25.919 --> 00:16:28.799
your ability to move data. I think apys drive it

309
00:16:28.879 --> 00:16:31.840
more and marketing than does your ability to move data.

310
00:16:32.159 --> 00:16:34.600
Yeah, I think that's right, and maybe not to zoom

311
00:16:34.600 --> 00:16:36.080
out too far. But then, you know, what do you

312
00:16:36.159 --> 00:16:38.840
think consumers are looking for from a bank today? Is

313
00:16:38.879 --> 00:16:41.480
it a one stop shop? Is it someone maybe like

314
00:16:41.519 --> 00:16:44.080
I can trust with a core relationship, and then open

315
00:16:44.120 --> 00:16:47.000
banking allows me to pick and choose more point solutions.

316
00:16:47.279 --> 00:16:49.120
Like you said, for lending, I'm going to go to

317
00:16:49.320 --> 00:16:53.159
Upstart or Lending Club for uh, you know, an auto loan,

318
00:16:53.240 --> 00:16:57.480
or for a brokerage account, I'll go somewhere else. You know, what,

319
00:16:57.480 --> 00:16:59.799
what does it mean like in the financial services, who's

320
00:16:59.799 --> 00:17:01.840
going to win the space or a consumer?

321
00:17:02.600 --> 00:17:05.799
Well, I think you're now getting at my biggest criticism

322
00:17:05.799 --> 00:17:09.640
of the rule, because the winner is the one that

323
00:17:09.680 --> 00:17:11.960
can actually hold on to the data the longest and

324
00:17:12.160 --> 00:17:17.440
provide those services, and the rule in some respects moves

325
00:17:17.599 --> 00:17:24.839
us backward. It's in terms of competition, So the rule

326
00:17:24.880 --> 00:17:28.920
does the right thing. The rule does is we discussed

327
00:17:29.000 --> 00:17:31.599
you can now use the API and you can go

328
00:17:31.599 --> 00:17:33.599
to lending Club for your point solution or your Upstart

329
00:17:33.599 --> 00:17:35.680
for your point solution if you don't like your bank solution.

330
00:17:36.119 --> 00:17:38.559
I think the idea that one bank that integrated everything

331
00:17:39.279 --> 00:17:43.200
is as far off. We haven't seen the big banks

332
00:17:43.799 --> 00:17:48.119
really innovate enough that that future is near term. What

333
00:17:48.119 --> 00:17:51.440
we have seen is Upstart, Lighting Club and others come

334
00:17:51.480 --> 00:17:55.839
in lower the cost of credit, and seeing the big

335
00:17:55.880 --> 00:17:58.920
banks follow by creating their own personal loans and not

336
00:17:59.000 --> 00:18:01.960
even doing as well Seagull and Sacks failing to be

337
00:18:02.000 --> 00:18:06.559
a personal loan player. We've also seen APIs go up

338
00:18:06.680 --> 00:18:09.880
because of fintech. We've also seen overdraft fees go down

339
00:18:10.279 --> 00:18:13.599
because of fintech. So I don't see a world where

340
00:18:13.599 --> 00:18:16.799
you can empower just a few banks. What I worry though,

341
00:18:17.400 --> 00:18:19.799
is that this rule, although in some ways makes it

342
00:18:19.799 --> 00:18:23.480
better to not rely on a few banks, it also

343
00:18:23.480 --> 00:18:26.559
makes it worse. How does it make it worse? Two ways. One,

344
00:18:27.240 --> 00:18:30.160
when a customer gives their data to an Upstart or

345
00:18:30.160 --> 00:18:34.680
a lending club to provide a better loan. Upstart or

346
00:18:34.759 --> 00:18:38.440
lending Club want to hold on to that initial data

347
00:18:38.640 --> 00:18:41.640
because their model depends on knowing where the customers started

348
00:18:41.680 --> 00:18:44.079
and what data had in order to continue to improve

349
00:18:44.119 --> 00:18:49.160
that model over time so that that same great product

350
00:18:49.519 --> 00:18:52.079
can be offered someone else in the future. Initially, the

351
00:18:52.160 --> 00:18:56.200
rule said, sorry, Upstart, Sorry lending Club, you can't. You

352
00:18:56.240 --> 00:18:58.640
can't hold on to it. You can use it once,

353
00:18:58.720 --> 00:19:01.319
but it's a secondary use that's banned to hold on

354
00:19:01.400 --> 00:19:04.880
to it for product improvement. Luckily, the CFP came to

355
00:19:04.920 --> 00:19:08.279
its census, so that part was obviated in its final rulemaking.

356
00:19:08.720 --> 00:19:12.640
What was not obviated, which I think will be a

357
00:19:12.680 --> 00:19:15.759
competitors advantage for the FinTechs that have done so much,

358
00:19:16.839 --> 00:19:21.000
is one what about holding that data to create new products?

359
00:19:22.519 --> 00:19:25.440
And by the way, clearly as a privacy concern, I

360
00:19:25.480 --> 00:19:27.279
get it, you get it. But there is this thing

361
00:19:27.319 --> 00:19:32.480
called de identification, which is with the CFPP itself advocated

362
00:19:32.519 --> 00:19:34.640
for and it's ten seventy one rule making and said, thanks,

363
00:19:34.680 --> 00:19:37.359
don't worry, no one's going to know unless we tell

364
00:19:37.400 --> 00:19:40.720
them who it is because it's the identified. But for

365
00:19:40.720 --> 00:19:44.160
some unknown reason, in ten thirty three that's not good enough.

366
00:19:44.400 --> 00:19:49.640
We're too worried about lending Club or Upstart and having

367
00:19:49.640 --> 00:19:52.200
that data, even if it's the identified for the purpose

368
00:19:52.240 --> 00:19:56.160
of new products, new research. Now road Chopper did say

369
00:19:56.559 --> 00:20:00.240
researchers for nonprofit in the future can do that, but

370
00:20:00.279 --> 00:20:02.839
I don't think that's not going nearly far enough, and

371
00:20:02.880 --> 00:20:09.400
I worry about a world we're only JPM can use

372
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its data for that purpose, so I hope, I hope

373
00:20:12.279 --> 00:20:13.839
we can think of some ways of fixing that down

374
00:20:13.839 --> 00:20:17.039
the road. The second warkness that's a look concerning is

375
00:20:18.039 --> 00:20:20.839
cross sell. I know cross sell is a bad world word,

376
00:20:22.039 --> 00:20:27.680
but let's be honest, the fintech environment selling into consumers

377
00:20:27.720 --> 00:20:30.079
has made fan your service a lot better. Sure, there's

378
00:20:30.119 --> 00:20:32.880
some bad actors. We have a trade associated on AFC

379
00:20:32.960 --> 00:20:35.359
we talked about before to help separate good from bad.

380
00:20:35.440 --> 00:20:38.880
We'll keep doing that work. But if we're so worried

381
00:20:38.920 --> 00:20:42.119
that Upstart lending Club are going to use that data

382
00:20:42.160 --> 00:20:46.200
to see, Hey, actually, you JPM customer, you are getting

383
00:20:46.240 --> 00:20:49.279
screwed on your annual percent yield or you're getting screwed

384
00:20:49.400 --> 00:20:51.039
on your auto loan. I know you came to us

385
00:20:51.039 --> 00:20:53.240
for our personal loan, but we can do more for you,

386
00:20:53.559 --> 00:20:56.519
and we're so worried about that, then we're just in

387
00:20:56.559 --> 00:20:59.680
the world where we're just going to shoot spam inboxes

388
00:21:00.279 --> 00:21:03.240
to try to get customers, and the idea of tailoring

389
00:21:03.279 --> 00:21:06.480
products to a customer is out, and we're still in

390
00:21:06.480 --> 00:21:08.359
the world of tailing a product to what we want

391
00:21:08.400 --> 00:21:10.960
to sell, which should be out and unfortunate. I feel

392
00:21:10.960 --> 00:21:13.920
like this rule is going to make it harder to

393
00:21:13.960 --> 00:21:18.119
do adequate customer analysis to get them the best products

394
00:21:18.119 --> 00:21:18.559
that they need.

395
00:21:19.200 --> 00:21:22.319
Upstart partners with banks and credit unions to grow households

396
00:21:22.400 --> 00:21:25.640
and expand consumer lending. Through its leading AI lending platform.

397
00:21:26.359 --> 00:21:29.720
Upstart powered banks and credit unions leverage AI to offer

398
00:21:29.799 --> 00:21:33.680
higher approval rates and experience lower loss rates while simultaneously

399
00:21:33.720 --> 00:21:37.640
delivering the exceptional digital first lending experience that consumers demand.

400
00:21:38.119 --> 00:21:40.960
Whether you're looking to grow and enhance your existing personal

401
00:21:40.960 --> 00:21:44.759
and auto lending programs or you're just getting started, Upstart

402
00:21:44.799 --> 00:21:48.039
can help. Upstart offers an end to end solution that

403
00:21:48.079 --> 00:21:50.960
can help you find more credit worthy borrowers within your

404
00:21:51.039 --> 00:21:56.400
risk profile. With all digital underwriting, verification, loan closing, and servicing.

405
00:21:56.839 --> 00:21:59.720
It's all possible with Upstart in your corner. Learn more

406
00:21:59.720 --> 00:22:03.720
about finding new borrowers, enhancing your critic decisioning process, and

407
00:22:03.759 --> 00:22:07.519
growing your business by visiting upstart dot com slash lenders.

408
00:22:07.920 --> 00:22:10.759
That's upstart dot com slash lenders.

409
00:22:12.079 --> 00:22:14.079
There could be a couple of things that help that though,

410
00:22:14.160 --> 00:22:17.000
right that we talked about maybe offline, and one of

411
00:22:17.039 --> 00:22:19.160
them a little faster than the other, one being like

412
00:22:19.200 --> 00:22:21.640
the idea of a standard setter, so Plaid being the

413
00:22:21.680 --> 00:22:23.920
first I think in the gate to do that. So

414
00:22:24.000 --> 00:22:26.720
we talked about like the American Fintech Council, or the

415
00:22:26.759 --> 00:22:29.640
idea of a group or a company coming in to

416
00:22:29.720 --> 00:22:32.400
set a standard. Like let's come together as an industry

417
00:22:32.440 --> 00:22:35.319
and try to solve this problem versus you know, regulators

418
00:22:35.359 --> 00:22:39.000
and policymakers who they're good at getting elected and raising

419
00:22:39.039 --> 00:22:42.519
funds and sometimes legislative but not always you know, as

420
00:22:42.559 --> 00:22:44.839
in the weeds and the details of our industry as

421
00:22:44.880 --> 00:22:46.680
we are. So you know, let's like try to come

422
00:22:46.759 --> 00:22:50.160
up with the answers as a team.

423
00:22:49.759 --> 00:22:52.720
And an answer there, Matt, Honestly, I think I think

424
00:22:52.839 --> 00:22:56.599
AFC is well positioned and others would be helpful as well,

425
00:22:58.400 --> 00:23:03.079
is to ask CFP. There there are goods and bads

426
00:23:03.079 --> 00:23:07.119
about change administration and take depending on perspective. A good

427
00:23:07.200 --> 00:23:10.680
from my perspective on this rule is this rule may

428
00:23:10.680 --> 00:23:14.119
not be a closed deal. We can go in there

429
00:23:14.119 --> 00:23:16.759
and say, hey, if we're so worried about secondary use

430
00:23:16.799 --> 00:23:21.240
of data, because you're worried about the spamming using that data,

431
00:23:21.319 --> 00:23:24.759
you're worrying about learning about by the client, the customer,

432
00:23:24.799 --> 00:23:28.880
you can actually raise prices. We have TILA that defines pricing.

433
00:23:28.960 --> 00:23:33.480
We have apy defined. Why don't you just say, unless

434
00:23:33.480 --> 00:23:36.519
it's a lower price product, you can't offer it. If

435
00:23:36.559 --> 00:23:40.079
it is lower price, you can. And there are compromises

436
00:23:40.119 --> 00:23:43.160
here to make the secondary use of data so powerful

437
00:23:43.240 --> 00:23:45.359
if we need to compromise. So I do hope we'll

438
00:23:45.400 --> 00:23:48.920
get a second day in court on that issue, because

439
00:23:48.920 --> 00:23:52.519
I just I don't want JPM and Wells and a

440
00:23:52.519 --> 00:23:55.240
few banks being the only ones who can do that,

441
00:23:55.640 --> 00:23:58.279
because either they won't or if they do do it,

442
00:23:58.279 --> 00:24:00.480
they won't do it. As well as having competive market.

443
00:24:01.079 --> 00:24:02.960
So to come back to your question, God, I hope

444
00:24:02.960 --> 00:24:04.680
we don't end up at one stop shops. And just

445
00:24:04.720 --> 00:24:06.920
don't believe. I don't believe in government controlling everything. I

446
00:24:06.960 --> 00:24:08.759
don't believe it. Two corporates patrolling everything.

447
00:24:09.119 --> 00:24:10.920
Yeah, I agree with you on that, and you hit

448
00:24:10.960 --> 00:24:12.599
on the other thing I was going to mention is like,

449
00:24:12.799 --> 00:24:15.519
we'll probably see this grind through the court system for

450
00:24:15.599 --> 00:24:18.039
some time too, right, because I think there was a

451
00:24:18.119 --> 00:24:21.079
note in there, an exception to kind of protect IP

452
00:24:21.559 --> 00:24:24.680
or things otherwise protected under law. So, you know, I

453
00:24:24.680 --> 00:24:28.119
imagine we'll see some companies trying to protect you know,

454
00:24:28.200 --> 00:24:30.880
data that, like you said, they're using for underwriting other

455
00:24:30.960 --> 00:24:35.000
products that they feel is pretty proproprietary or critical to

456
00:24:35.039 --> 00:24:37.799
their business, that maybe slows down some of the use

457
00:24:37.920 --> 00:24:38.720
of this as well.

458
00:24:39.200 --> 00:24:41.559
That's right, we've were remiss if we don't mention the

459
00:24:41.599 --> 00:24:47.079
case that was filed the day of where net the

460
00:24:47.119 --> 00:24:49.559
big banks have decided this is not good for them,

461
00:24:49.599 --> 00:24:52.279
even though I've made arguments that entrenched their monopolies. I

462
00:24:52.359 --> 00:24:55.640
understand I pitsioned that it's ultimately better for FinTechs. This

463
00:24:55.720 --> 00:24:58.599
rule is better for competition, no rule for sure, And

464
00:24:58.680 --> 00:25:01.240
they aren't making arguments that we've heard before in other

465
00:25:01.359 --> 00:25:08.839
contexts about everything you just said AD fraud, AD, cybersecurity, AD.

466
00:25:08.839 --> 00:25:12.440
We don't trust those FinTechs, and so we'll see how

467
00:25:12.480 --> 00:25:15.559
it plays out. There's no way to know in my opinion,

468
00:25:16.480 --> 00:25:21.119
absent being some great litigation analysts, because we've seen what

469
00:25:21.160 --> 00:25:23.599
the courts can do and they know how to pick

470
00:25:23.640 --> 00:25:26.359
their forums. They're not dumb. So we'll see what happens.

471
00:25:27.720 --> 00:25:30.960
But what I do think, you know Trump is president,

472
00:25:31.039 --> 00:25:35.200
will be president. The CFP director will change, maybe not

473
00:25:35.279 --> 00:25:38.640
day one, but close to it. The world is different.

474
00:25:38.759 --> 00:25:41.480
Why do I say close to day one because there's

475
00:25:41.480 --> 00:25:44.039
a Supreme Court case in twenty twenty that ends the

476
00:25:44.160 --> 00:25:47.839
idea that the director is a five year term and

477
00:25:47.920 --> 00:25:50.680
it's now serves the will and president. As we discussed

478
00:25:50.680 --> 00:25:53.519
in the last podcast, that's a bad thing for the world.

479
00:25:53.519 --> 00:25:56.400
In my opinion, I do like the idea of agencies

480
00:25:57.079 --> 00:25:59.920
having to be a little more measured and keeping old

481
00:26:00.039 --> 00:26:04.519
yards in for longer. I think that serves our stability better.

482
00:26:04.839 --> 00:26:07.000
But it is what it is, so we'll see a

483
00:26:07.039 --> 00:26:11.039
shift there quite quickly, and there will be an opportunity

484
00:26:11.079 --> 00:26:13.759
to change the rule as needed. I don't know if

485
00:26:13.759 --> 00:26:17.359
we take in if this litigation does not succeed CFP,

486
00:26:17.440 --> 00:26:19.599
we make a choice do we defendse litigation or not.

487
00:26:20.240 --> 00:26:22.599
That will be a choice. They can choose not to.

488
00:26:23.160 --> 00:26:24.759
But I don't think this rule is like one of

489
00:26:24.799 --> 00:26:27.720
these rules that when we go through the future CFPV

490
00:26:29.319 --> 00:26:32.359
in a few minutes. This is not the rule that

491
00:26:32.400 --> 00:26:35.319
a CFPB is like gonna blow up under Trump. This

492
00:26:35.400 --> 00:26:37.079
is not probably number one in my opinion.

493
00:26:37.160 --> 00:26:40.279
Yeah, yeah, And maybe that's a good segue. Like of

494
00:26:40.319 --> 00:26:42.480
the other agencies, where do you want to go next? Now,

495
00:26:42.640 --> 00:26:45.720
Like you said, we're starting to get news of Trump

496
00:26:45.799 --> 00:26:48.640
and his transition team and cabinet and then see who

497
00:26:48.720 --> 00:26:51.279
he's going to start selecting in some of these roles

498
00:26:51.319 --> 00:26:53.279
like what what are some of the things you're looking

499
00:26:53.319 --> 00:26:56.119
for or you know, thinking about the changes that could come.

500
00:26:57.160 --> 00:27:01.240
Yeah, let's do the other broadly, and then it might

501
00:27:01.279 --> 00:27:04.200
be to come out to the CFPP on like CFP

502
00:27:04.440 --> 00:27:06.119
what they're going to be thinking the next few months

503
00:27:06.240 --> 00:27:07.960
and what they reprobably gonna think of then they come in,

504
00:27:08.160 --> 00:27:11.319
but more broadly on regulation and impacts all of us.

505
00:27:11.960 --> 00:27:15.400
I think I am we're going to see quick transition

506
00:27:15.880 --> 00:27:20.319
out of CFPB an EOCC the OCC again normally a

507
00:27:20.359 --> 00:27:24.720
five year term in this case not because controller suit

508
00:27:24.799 --> 00:27:27.680
was never confirmed he was an actor. So those are

509
00:27:27.720 --> 00:27:31.720
been the two easiest switches for Trump. On the other

510
00:27:31.920 --> 00:27:35.640
end is the FED, where nothing's changing for years, a

511
00:27:35.680 --> 00:27:39.599
couple of years, because the FED is very structured, board

512
00:27:39.640 --> 00:27:43.119
by board member long terms. One nuance that could be

513
00:27:43.119 --> 00:27:46.480
interesting there is what happens to Mike bar the Democratic

514
00:27:46.559 --> 00:27:51.559
vice share for supervision. Now, Trump had in his vice

515
00:27:51.559 --> 00:27:54.640
share of supervision Ranny Corals and he resigned in his

516
00:27:55.160 --> 00:27:58.680
due time for policy or with our personal reasons. He

517
00:27:58.799 --> 00:28:01.200
was not forced out. He was around for about a year.

518
00:28:01.240 --> 00:28:02.880
I'm sure there was some behind the scenes stuff, but

519
00:28:03.240 --> 00:28:05.799
there wasn't a big kerfuffle in terms of rules and

520
00:28:05.839 --> 00:28:09.039
those other agencies. I think, I think that we'll get

521
00:28:09.039 --> 00:28:10.240
back to see if being second, but I think the

522
00:28:10.279 --> 00:28:11.920
bank partner model is the one we all care about

523
00:28:11.920 --> 00:28:16.119
the most. So obviously, when you change these regimes, you're

524
00:28:16.119 --> 00:28:22.160
looking at three things, broadly, rulemaking, enforcement and supervision at

525
00:28:22.160 --> 00:28:25.359
the FDIC and the OCC. If you talk to the

526
00:28:25.400 --> 00:28:29.839
bank partners you may know this. I'm sure all the

527
00:28:29.920 --> 00:28:33.880
vast banks know this. The supervisors have been quite challenging.

528
00:28:34.519 --> 00:28:36.519
Some of the rulemakings have that are pending have been

529
00:28:36.559 --> 00:28:41.920
quite challenging. So slowly, slowly things will calm down. But

530
00:28:41.960 --> 00:28:44.759
it's not an overnight thing. Because we've heard about the supervisors.

531
00:28:45.160 --> 00:28:48.920
These don't happen overnight. So I think FDIC occ relief.

532
00:28:49.680 --> 00:28:52.880
MARTI go to go. When you get to supervisor level,

533
00:28:53.079 --> 00:28:56.319
change is much more slow. When you get to enforcement

534
00:28:56.880 --> 00:28:59.319
and rule making, change is much more quick, right because

535
00:28:59.319 --> 00:29:00.880
these are things that are or top of the house,

536
00:29:01.200 --> 00:29:04.720
less about implementation. So I have the son coming around here,

537
00:29:05.160 --> 00:29:08.839
so we're going to see a lot of action and

538
00:29:08.880 --> 00:29:11.119
the rule making side. So at the FD I see

539
00:29:11.279 --> 00:29:13.759
there's this rulemaking on how we deal with BASS banks

540
00:29:14.119 --> 00:29:17.640
and reconciling of data, especially as a BASS. I guess

541
00:29:17.640 --> 00:29:22.240
we're calling them API convent rather intermediaries these days. With

542
00:29:22.359 --> 00:29:25.720
those that's that's that's an issue that could go away.

543
00:29:26.000 --> 00:29:28.599
Broken deposits impacts the bank BASS model. I won't go

544
00:29:28.599 --> 00:29:32.000
into details that could go away. Probably will go away,

545
00:29:32.839 --> 00:29:36.960
I would bet. But CFPB we had a lot of

546
00:29:37.000 --> 00:29:41.599
interesting rules honestly that are in play that I think

547
00:29:41.680 --> 00:29:45.319
if you look one by one at the rules a

548
00:29:45.319 --> 00:29:51.400
CFP B that are pending, you'll notice, Wow, except for

549
00:29:51.480 --> 00:29:55.279
open banking, no major rule that the industry really had

550
00:29:55.319 --> 00:29:58.680
a strong opinion on was finalized in the past five

551
00:29:58.720 --> 00:30:02.440
to six months. Why is that? Because this is this

552
00:30:02.559 --> 00:30:06.319
thing called the Congressional Review Act and Congress now that

553
00:30:06.359 --> 00:30:08.759
it's flipped, most likely in the House as well, we

554
00:30:08.799 --> 00:30:11.640
don't know for sure, can do what it did in

555
00:30:11.759 --> 00:30:16.079
twenty seventeen and before that in twenty twenty really twenty seventeen,

556
00:30:16.160 --> 00:30:19.880
twenty twenty one and just strike down these rules at

557
00:30:19.880 --> 00:30:22.880
a pretty easy vote no sen in filibuster. And when

558
00:30:22.880 --> 00:30:26.920
you strike it down, it's gone forever. You can't under

559
00:30:26.920 --> 00:30:30.400
the rules, if it's reasonably related, do another issuance on

560
00:30:30.440 --> 00:30:34.880
that topic. So there's a reason why there haven't been

561
00:30:34.880 --> 00:30:38.279
a lot of rule finalizations lately. And happy to go

562
00:30:38.319 --> 00:30:40.559
on like what the three big ones are, but I've

563
00:30:40.599 --> 00:30:41.480
been talking for a long time.

564
00:30:41.920 --> 00:30:43.839
It'd be interesting because I would I would like to

565
00:30:43.880 --> 00:30:46.039
know where you think those are. I mean, if the

566
00:30:46.319 --> 00:30:48.880
you know, the markets are any indication people are expecting

567
00:30:48.920 --> 00:30:51.240
that to happen pretty quickly. You know, we saw the

568
00:30:51.279 --> 00:30:57.359
morning after the election big banks, technology, fintech companies seem

569
00:30:57.400 --> 00:30:59.680
to get a bit of a boost from that per

570
00:30:59.720 --> 00:31:03.839
step that a Republican controlled administration from top to bottom

571
00:31:03.880 --> 00:31:06.480
is going to lead to a lot of more flexibility

572
00:31:06.559 --> 00:31:11.400
or openness for those companies in those sectors to operate.

573
00:31:11.440 --> 00:31:12.440
I think a little more freely.

574
00:31:13.160 --> 00:31:16.079
Yeah, I mean, I think starting with the rules and

575
00:31:16.119 --> 00:31:19.440
the one that most ropes in a market change. We'll

576
00:31:19.440 --> 00:31:21.240
get to the penning ones in a second, but a

577
00:31:21.319 --> 00:31:25.599
finalized one was the credit card late fuel, basically saying

578
00:31:26.200 --> 00:31:27.839
you used to be a charge three to two bus

579
00:31:27.880 --> 00:31:31.240
under KILA for a late for lateness on repaying a

580
00:31:31.240 --> 00:31:35.119
credit card. Now you can only charge eight. You saw

581
00:31:35.319 --> 00:31:40.400
those stocks go up pretty big of those companies because

582
00:31:40.720 --> 00:31:43.720
that rule has been mired in the courts, and now

583
00:31:43.759 --> 00:31:48.440
the CFPB can choose not to defend it or to

584
00:31:48.480 --> 00:31:51.640
later repeal it. Repelling is hard, and that rule was

585
00:31:51.680 --> 00:31:55.519
final before the CRA window, so that's not something Congress

586
00:31:55.559 --> 00:31:58.319
is going to be able to Congressional Review Act. So

587
00:31:58.559 --> 00:32:01.599
my gut is that the way of the courts, the

588
00:32:01.599 --> 00:32:06.720
courts strike that down CFP doesn't defend. In the next

589
00:32:06.720 --> 00:32:10.079
bucket are the ones where the cfpv had to have

590
00:32:10.240 --> 00:32:14.480
had some intentionality of not finalizing. The big three there

591
00:32:15.200 --> 00:32:20.039
which have been proposed over the past year is number one.

592
00:32:20.839 --> 00:32:22.640
I mean, the CFP has made no bones about it.

593
00:32:22.680 --> 00:32:25.079
They're interesting in big tech, so what did they do?

594
00:32:25.119 --> 00:32:29.200
They had that rule that allows them to supervise big

595
00:32:29.240 --> 00:32:31.519
tech companies in the payment space, they use their payment

596
00:32:31.559 --> 00:32:34.640
hook this thing called a large infestment rule, and then

597
00:32:34.640 --> 00:32:37.759
they can supervise the big tech companies. And that was

598
00:32:37.839 --> 00:32:41.240
not finalized. That's going to be the most intriguing one

599
00:32:41.240 --> 00:32:43.599
to see what they choose to do. If they choose

600
00:32:43.640 --> 00:32:46.640
to finalize it, then it can get CRA and they

601
00:32:46.720 --> 00:32:50.359
lose that. As the statue is written for a long time,

602
00:32:50.559 --> 00:32:53.160
not forever, there are ways around it. We don't know.

603
00:32:53.200 --> 00:32:56.039
That's unchartered territory for the most part. So what are

604
00:32:56.039 --> 00:33:00.799
they going to do. They're probably thinking, are there eno

605
00:33:00.799 --> 00:33:03.960
frs who won't CRA this is big tech still not

606
00:33:04.079 --> 00:33:07.240
popping on both sides that we can get away without

607
00:33:08.640 --> 00:33:10.880
and finalize this thing. The other one, I think you're

608
00:33:10.880 --> 00:33:14.119
easier calls for the CFPD. The other two are over

609
00:33:14.200 --> 00:33:18.839
draft fees proposed this year but never finalized. I don't

610
00:33:18.880 --> 00:33:22.039
think they're going to finalize it. I don't see ours

611
00:33:22.160 --> 00:33:25.440
defending that in CRA. A rule like that is like

612
00:33:25.519 --> 00:33:28.880
the credit card rule and draws the ire of the industry,

613
00:33:29.279 --> 00:33:32.559
so that one's going to get I think not finalized

614
00:33:32.559 --> 00:33:35.559
about betting. And the other one is the EWA rule,

615
00:33:35.599 --> 00:33:39.000
which only came out a couple months ago. That was

616
00:33:39.079 --> 00:33:42.240
done as a proposed rule, although they could have done

617
00:33:42.240 --> 00:33:44.720
it as a final interpretive rule. I'll get to that

618
00:33:44.759 --> 00:33:46.519
in the second. And they chose to do it as

619
00:33:46.519 --> 00:33:50.000
a proposed one, probably to not make it cra able

620
00:33:50.039 --> 00:33:52.200
because they only got it out in July. I don't

621
00:33:52.200 --> 00:33:55.000
know for sure. Maybe we're thinking it, but these are

622
00:33:55.079 --> 00:33:57.799
very smart people, so maybe they have a smarter reason

623
00:33:57.839 --> 00:34:00.000
why I'm coming up with frankly, but that's my thing.

624
00:34:00.559 --> 00:34:02.119
So the e w A one. They got to make

625
00:34:02.119 --> 00:34:05.160
a call, are we finalizing it or not? Because in

626
00:34:05.200 --> 00:34:09.039
their view, California's rule isn't good enough to write the market.

627
00:34:09.079 --> 00:34:11.960
They made that clear in public statements. They even wrote

628
00:34:12.000 --> 00:34:14.880
a comment to California Italian them make it stronger, and

629
00:34:14.920 --> 00:34:17.159
the California did it. So now they did their own

630
00:34:17.239 --> 00:34:19.000
and they got to make a tough call here. So

631
00:34:19.039 --> 00:34:22.559
those are three calls. I think there are those. Those

632
00:34:22.559 --> 00:34:25.800
are the three main calls. I'm so sorry. Earned wage,

633
00:34:25.840 --> 00:34:29.960
access to the course, that industry, and fintech. That's some

634
00:34:30.159 --> 00:34:32.519
love and some hate. If you love it, you view

635
00:34:32.559 --> 00:34:35.280
it as a way of getting your your wage the

636
00:34:35.400 --> 00:34:38.119
second you earned it. And I think there's a lot

637
00:34:38.159 --> 00:34:40.559
of compelling reasons of you that way, like why do

638
00:34:40.639 --> 00:34:44.079
we have an arbitrary two week, one month cycle before

639
00:34:44.079 --> 00:34:48.039
getting paid now? Not ew Not every e w A

640
00:34:48.119 --> 00:34:50.480
is alike, just like not every personal lender is alike.

641
00:34:51.400 --> 00:34:53.960
So the rules may be needed for some EWA players.

642
00:34:54.239 --> 00:34:55.760
So this is the this is the that that it

643
00:34:55.800 --> 00:34:58.760
looks more like payday, and that's that's the debate on

644
00:34:58.800 --> 00:35:02.639
both sides. But yeah, so that's a big one. Now

645
00:35:02.679 --> 00:35:05.960
BNPL buy now, pay later. I'll stop after this fifth one.

646
00:35:06.280 --> 00:35:10.800
That one was finalized probably before the CRA window. On

647
00:35:10.880 --> 00:35:13.159
CR you can only go back a certain amount in

648
00:35:13.239 --> 00:35:17.000
time and grab it. You have sixty days legislative. Takes

649
00:35:17.000 --> 00:35:20.239
a long time to calculate that because what's the legislative day.

650
00:35:20.639 --> 00:35:23.639
You don't know it until you got it. Ditto going forward,

651
00:35:23.679 --> 00:35:25.719
then you have a certain amount of time for Congress

652
00:35:26.039 --> 00:35:28.360
to go and repeal the thing. So I think the

653
00:35:28.480 --> 00:35:31.400
MPL is out of the window, and frankly we'll be

654
00:35:31.519 --> 00:35:35.719
NPL get repealed or destroyed in court maybe, But I

655
00:35:35.719 --> 00:35:36.920
don't view as the top priority.

656
00:35:37.360 --> 00:35:39.400
Well, I know you mentioned like you know which ones

657
00:35:39.440 --> 00:35:41.519
you might bet on. I have to go and check

658
00:35:41.599 --> 00:35:44.000
some of these new like betting markets and see if

659
00:35:44.000 --> 00:35:45.880
they're out there, what the odds are like. If you

660
00:35:45.960 --> 00:35:48.159
agree with the the odds and makers on some of these,

661
00:35:48.199 --> 00:35:49.719
if you can actually place.

662
00:35:49.480 --> 00:35:51.039
Bets on on that that happening.

663
00:35:51.920 --> 00:35:54.000
It'd be fun if there was a rule by a rule.

664
00:35:54.079 --> 00:35:57.079
I mean, it's a terrible it's a terrible wing to

665
00:35:57.119 --> 00:36:01.039
joke about and to gamble on, because it's really important. Right,

666
00:36:01.079 --> 00:36:05.880
going back to our earlier conversation. Last we spoke, I

667
00:36:05.960 --> 00:36:10.079
was saying we shouldn't blow up the CFPP and all

668
00:36:10.159 --> 00:36:15.639
its rules because serious companies invest in the rules of

669
00:36:15.639 --> 00:36:18.239
the road and they want to be around a long time,

670
00:36:18.599 --> 00:36:21.239
and they want what's best of our customers. And the

671
00:36:21.400 --> 00:36:25.679
major problem in life is for these companies, if rules

672
00:36:25.719 --> 00:36:28.119
can just go away, you can't invest and we can't

673
00:36:28.119 --> 00:36:32.400
grow our economy the right way. Moreover, fly by nighters

674
00:36:32.639 --> 00:36:35.559
come in and there are ways to make profits in

675
00:36:35.599 --> 00:36:40.079
a short run taking advantage of these gaps. And what

676
00:36:40.159 --> 00:36:43.000
is the incentive of being a good actor. But it

677
00:36:43.079 --> 00:36:46.400
good doesn't mean like I'm a great guy. Good means

678
00:36:46.400 --> 00:36:48.239
I want to last and be a good business for

679
00:36:48.280 --> 00:36:50.440
a long time and really grow this economy and provide

680
00:36:50.440 --> 00:36:53.320
a real service. So it's selfish too, but we want

681
00:36:53.360 --> 00:36:56.519
to empower that kind of that's the selfishness. Capitalism wants

682
00:36:56.519 --> 00:37:00.000
to empower, not the short term, not the taking advance,

683
00:37:00.000 --> 00:37:04.320
abdicatory gaps, whether it's a bad protection or an asymmetry

684
00:37:04.559 --> 00:37:06.559
of information with the customers and know what's going on.

685
00:37:07.119 --> 00:37:09.719
So I don't want a lot of these rules going down.

686
00:37:10.000 --> 00:37:13.119
And I do worry that we're going to have a

687
00:37:13.360 --> 00:37:17.320
replay a bit of the CFP b blow up conversation

688
00:37:17.400 --> 00:37:19.760
we had, where we know the CFP is now constitution

689
00:37:19.840 --> 00:37:23.800
on appropriations grounds, but now given all the litigation and

690
00:37:23.880 --> 00:37:26.840
all the paths to litigate in the fifth circuit and

691
00:37:26.880 --> 00:37:30.320
in other circuits, you can see all these rules getting

692
00:37:30.320 --> 00:37:33.719
attacked by the most by the actors have the most

693
00:37:33.719 --> 00:37:36.360
to benefit from not having rules. And I don't want

694
00:37:36.360 --> 00:37:39.000
to stay at race to the bottom, and I can

695
00:37:39.079 --> 00:37:42.360
just hope that the CFPP will defend its own rules

696
00:37:42.800 --> 00:37:45.559
because a lot of these rules are good for capitalism,

697
00:37:45.719 --> 00:37:48.639
and we don't need the short term sugar high for

698
00:37:48.719 --> 00:37:52.639
a few starts ecommonly we need we need like good growth,

699
00:37:52.679 --> 00:37:54.599
which we can get without getting rid of these rules.

700
00:37:54.800 --> 00:37:59.440
I worry about that, similar with invevement. Enforcement too clear.

701
00:37:59.519 --> 00:38:03.639
Rules to be enforced the US are not rules and supervision.

702
00:38:03.679 --> 00:38:06.559
You got to supervise these things. Now the enforcement will

703
00:38:06.559 --> 00:38:09.079
see a lot less of some of which will be good.

704
00:38:09.199 --> 00:38:13.119
Actually is where you just you're surprised, right, you're surprised

705
00:38:13.119 --> 00:38:17.199
by the standard business thing called U dad And we

706
00:38:17.239 --> 00:38:20.599
don't like surprises. And I know this. See if we

707
00:38:20.760 --> 00:38:25.039
try to do a better job using supervisor highlights publishing things

708
00:38:25.079 --> 00:38:29.280
to their credit, there were still surprises. And I think

709
00:38:29.360 --> 00:38:32.280
it's not will be good for industry. Some of that

710
00:38:32.360 --> 00:38:33.719
is good for the world, if some of it is not.

711
00:38:34.199 --> 00:38:36.800
Yeah, agree, And I think to your point, like there

712
00:38:36.920 --> 00:38:40.280
will always be bad actors, it's good to have that

713
00:38:40.519 --> 00:38:43.360
minimum set so that we can all play by the

714
00:38:43.400 --> 00:38:48.559
same transparent, open, agreed upon set of rules. There's all

715
00:38:48.599 --> 00:38:50.920
these things you know, with or without rules, like it

716
00:38:50.920 --> 00:38:52.880
adds costs to the end consumer, right, Like if you

717
00:38:52.960 --> 00:38:55.960
let bad actors play, like you said, people will exploit them.

718
00:38:56.119 --> 00:38:58.280
They will take advantage, they will get their profits, and

719
00:38:58.320 --> 00:39:00.000
they will run away and they'll be on the next

720
00:39:00.039 --> 00:39:04.519
thing they can exploit. Regulation. Setting the rules and enforcing

721
00:39:04.639 --> 00:39:07.079
the rules is expensive, so we have to choose the

722
00:39:07.360 --> 00:39:09.440
least of the evils and try to figure out a

723
00:39:09.440 --> 00:39:12.119
way to create a system that allows think you said

724
00:39:12.119 --> 00:39:15.000
it well both you know, the short term growth and innovation,

725
00:39:15.079 --> 00:39:18.519
but also the sustainable businesses that are going to stick

726
00:39:18.559 --> 00:39:19.440
around as well.

727
00:39:19.639 --> 00:39:22.280
How do we satisfy all of those It's difficult.

728
00:39:22.199 --> 00:39:26.519
And elections are a decision on how you bias that line,

729
00:39:26.559 --> 00:39:28.800
because there is no perfect answer, like I'm sitting here

730
00:39:28.880 --> 00:39:32.000
to plant open banking, but someone else with an equally

731
00:39:32.079 --> 00:39:35.559
valid point of view isn't. And it's going to be

732
00:39:35.719 --> 00:39:39.440
decided in a way by the election because obviously we

733
00:39:39.559 --> 00:39:42.039
will now have more of a bend on these rules

734
00:39:42.079 --> 00:39:46.480
for more consumer take on the burden a front themselves.

735
00:39:47.320 --> 00:39:50.719
But also there will be some benefits the industry and

736
00:39:50.719 --> 00:39:53.719
growth for sure. But how you calibrate that is what

737
00:39:53.840 --> 00:39:57.360
the electoral process resolves, and so we're going to see

738
00:39:57.360 --> 00:40:00.360
a shift in that debate for quite a while. I

739
00:40:00.440 --> 00:40:03.320
hope and I wish we had more five year structures.

740
00:40:03.320 --> 00:40:07.280
Having the FDIC is right. I hope Marty's days, you

741
00:40:07.320 --> 00:40:10.440
know what I mean. I hope that. I didn't like

742
00:40:10.480 --> 00:40:13.119
when mc williams had to leave. I'm glad the FED

743
00:40:13.280 --> 00:40:16.480
is going to be resolute. I hope Mike bar just

744
00:40:16.480 --> 00:40:19.639
like I hoped Randy Corals would fill out his term.

745
00:40:19.760 --> 00:40:22.760
Those are good things because we need that actual stability

746
00:40:22.760 --> 00:40:26.360
in the system to avoid some whiplash. And I hope

747
00:40:26.360 --> 00:40:30.920
the CFPB and other agencies defend their long established rules

748
00:40:31.559 --> 00:40:35.000
and don't let someone save reactors get their way on

749
00:40:35.039 --> 00:40:35.639
some of this stuff.

750
00:40:35.920 --> 00:40:39.639
Totally agree well, Arman, I always feel like smarter coming

751
00:40:39.719 --> 00:40:42.280
into conversations with you, because I always want to prepare

752
00:40:42.320 --> 00:40:44.079
and like think about things a little deeper, and then

753
00:40:44.079 --> 00:40:46.960
I'd end them like realizing I've got a lot more

754
00:40:47.559 --> 00:40:50.559
to learn. So you always I always enjoy our conversations

755
00:40:50.559 --> 00:40:52.320
in a way that you know it gives me even

756
00:40:52.360 --> 00:40:55.920
more to go now research and think about and figure

757
00:40:55.960 --> 00:40:57.719
out the next thing that we can talk about. But

758
00:40:57.880 --> 00:40:59.880
is there anything else that you want to cover as

759
00:41:00.159 --> 00:41:01.719
you kind of wrap here and think about, you know,

760
00:41:01.760 --> 00:41:04.639
the election and what's what's changing with all the rulemaking

761
00:41:04.840 --> 00:41:05.360
going on.

762
00:41:06.119 --> 00:41:08.440
I just think next time, because what you said was

763
00:41:08.559 --> 00:41:12.360
so nice and way too generous, that I should ask

764
00:41:12.400 --> 00:41:15.559
you the questions, because I'm sure the level I'd be

765
00:41:15.599 --> 00:41:17.840
humbled would be more than more than you claim to be.

766
00:41:17.960 --> 00:41:18.800
So I look forward to.

767
00:41:20.199 --> 00:41:21.960
That's the best part about being the host. I get

768
00:41:21.960 --> 00:41:24.840
to ask most of the questions, so that's the easier part.

769
00:41:25.320 --> 00:41:30.079
I'm glad back. I enjoys conversations and going back to

770
00:41:30.119 --> 00:41:32.639
open banking. I do hope there's an opportunity to make

771
00:41:32.639 --> 00:41:35.039
the world better. I'm really glad and commend to see it.

772
00:41:35.079 --> 00:41:37.360
FPB for getting it done. It was a long time

773
00:41:37.400 --> 00:41:40.079
to come in, but I strongly believe it can be

774
00:41:40.079 --> 00:41:43.199
better for fintech, better for innovation, and we gotta we

775
00:41:43.320 --> 00:41:45.519
have to be anti monopoly and we have to be

776
00:41:45.559 --> 00:41:48.400
anti big big government. We have to be moderate on

777
00:41:48.440 --> 00:41:51.119
both these things. And I want to see some more moderation.

778
00:41:51.320 --> 00:41:54.239
And let's hope this election, and it might be a

779
00:41:54.280 --> 00:41:57.920
false hope, is not yet another stone in the extremism

780
00:41:58.360 --> 00:42:00.559
that we've seen in our society. Is not good for

781
00:42:00.599 --> 00:42:03.239
any of us. And I'm still hoping for a day

782
00:42:03.239 --> 00:42:08.599
where the moderates can be cool again, and we can only.

783
00:42:08.400 --> 00:42:10.119
Hope absolutely well.

784
00:42:10.159 --> 00:42:13.039
I appreciate you being able to join me on short

785
00:42:13.079 --> 00:42:16.280
notice and take advantage of all the activity going on

786
00:42:16.440 --> 00:42:18.679
and kind of capture this moment in time, and yeah,

787
00:42:18.719 --> 00:42:21.559
maybe we can come back and see our progression towards

788
00:42:21.639 --> 00:42:24.159
moderation and see if that's cool again sometime and then

789
00:42:24.159 --> 00:42:24.679
your future.

790
00:42:25.119 --> 00:42:27.599
Great talking Matt, Thanks Armer, take care.

791
00:42:28.360 --> 00:42:30.800
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