Nasty Truths About U.S. Fintech

Either you didn't read the article, or you know something I don't...

Europe has similar laws, but the European Union has a “passport” system that allows a registered payments company in one E.U. country to get permission to do business in another E.U. country.

There is nothing comparable in the U.S. Some have called for a single national license that could take the place of multiple state licenses

What specific sort of oversight/enforcement/regulation do you believe would have prevented 2008?

It's understandable that there are some hurdles involved in businesses that handle customer money like this. But obviously the current situation is far from ideal.

I know there's at least one company (Precash) where you can sort of rent their licenses. I'm not familiar with how forward thinking they are or how onerous/costly their service are.

The article seems to overlook the main obstacle: the banking cartel. The big bankers in the U.S. are among its most powerful lobbyists. The current system benefits them plenty. They like it the way it is. They'll sure push to streamline red tape where possible but a near-zero barrier to entry would eat into their profits.

So, they'll continue paying politicians to ensure the status quo and collecting all kinds of fees/interest. Changing the situation will require Congress or courts to go in a different direction. That usually doesn't happen if big, banks' profits are concerned. The voters pushed against the banks in 2008 and the banks (mostly Goldman) won. I'm not getting my hopes up on this.

> To perform due diligence in New York, you need: audited financial statements, a certificate of good standing, bank account details, background checks, credit checks, and criminal records from each and every single executive. Essentially, getting a license in New York means a two-year financial colonoscopy in the 10th circle of hell.

I'm not a fan of overzealous regulation, and there is plenty of regulation in financial services that is ridiculously overzealous, but it would be interesting if the author provided specific proposals.

I mean, is he really complaining that folks running a company handling customer money need to have background checks?

> What’s worse is that the actions being penalized are rarely flagrant in nature — we’re not talking money laundering for cartels here but administrative oversights. For example, the failure to file an SAR, failure to train, or failure to implement policy.

Does the author believe a customer is going to be relieved that his or her money has been put at risk (or lost) only because of "administrative oversights"?

Again, there's a lot of overzealous regulation in financial services, but there are also a lot of people trying to "innovate" in the market who clearly don't fully recognize the responsibilities they have to their customers.