Fintechs: Navigating the Uncertainty of Regulatory Compliance

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Fintechs struggle with a highly complex regulatory landscape. This industry has no “fintech-specific” compliance framework, but all organizations’ operations will almost certainly fall within the preview of various regulatory bodies. What’s more, companies are required to register and comply with requirements defined by one or several of these regulatory entities.

The situation is also worsened by the fact that organizations in this sector must comply with regulations at the state and federal levels. Even if you offer relatively simpler services or products, you’ll likely have to acquire licensing from regulators at both levels and ensure compliance with every requirement prescribed by the respective bodies.

All these culminate in a complex and uncertain fintech regulatory landscape.

This detailed guide reviews the compliance situation for fintech organizations and how companies can navigate the environment and ensure compliance with all the applicable requirements.

A Landscape Governed by Vast Regulatory Bodies

Several state and federal regulatory bodies are charged with manning the financial services industry. To be on the safe side, ensure you pay attention to the mandates established by the following regulatory authorities:

  • Federal Trade CommissionFTC is a body responsible for addressing any deceptive, unfair, or anticompetitive practices amongst organizations. It has also created numerous regulatory requirements for brands serving US customers, including data protection and privacy obligations.

  • Commodity Futures Trading Commission – This body regulates the countries commodities markets. CFTC’s jurisdiction also covers entities like intermediaries and trading organizations.

  • Office of the Comptroller of the Currency – The regulatory body is the country’s national bank regulator but has been accepting fintech special purpose charters’ applications. The charter is limited to entities that receive deposits or offer lending services.

  • Consumer Financial Protection BureauCFPB is charged with regulating financial services for US consumers. The body also enforces against unfair or deceptive practices.

  • Financial Crimes Enforcement Network – This body enforces the country’s AML (Anti-Money Laundering) regulations. FinCEN sets the AML compliance terms and collects and shares data with other organizations.

  • Federal Deposit Insurance Corporation – FDIC is charged with administering the country’s deposit protection scheme, insuring deposits of up to $250,000 for every account. The body also regulates banks that aren’t registered with the Federal Reserve Scheme.

  • Financial Industry Regulatory Authority – The agency regulates entities that provide investment activities (including crowdfunding). Every crowdfunding portal must register with the body and the SEC.

  • Securities and Exchange CommissionSEC is the United States securities market regulator. Its jurisdiction covers businesses like securities exchanges, dealers, and brokers.

  • Industry associations – Besides the state and federal regulations, organizations that conduct payment-related operations are also bound by several industry association compliance requirements like NACHA and the payments cards associations.

  • State Governments – Also, remember that state laws also regulate your fintech. With varying state statutes, compliance becomes even more complex. Fortunately, several measures are being applied to rationalize and simplify these regulatory frameworks.

Pertinent Fintech Compliance Regulations

Another challenge that creates more uncertainty in regulatory compliance is the numerous regulations that fintech firms must understand and comply with. The specific rules applicable to your situation depend on the activities your company pursues.

Here are the standard regulations that fintech organizations serving US consumers must comply with:

  • Gramm-Leach Bliley Act

GLBA is also goes by the name Financial Monetization Act. The regulation requires every US financial institution to safeguard customer data and explain how they use and share the data.

  • Fair Credit Reporting Act

This regulation defines financial institutions’ approaches to the collection of client credit card information. FCRA also extends client rights concerning access to their credit reports.

  • United States Anti-Money Laundering Regulations

The USA Patriot and the Bank Secrecy Acts are the central AML legislation in force. These laws comprise regulations regarding customer due diligence, risk management programs, and several record-keeping tasks. Notably, the Patriot Act also involves specific cross-border transaction obligations.

  • JOBS Act

This regulation requires funding portals like crowdfunding platforms to register with FINRA and SEC. The act also defines additional restrictions and obligations on these entities, including disclosure requirements and maximum fundraising amounts.

  • CFPB Regulation E and Fund Transfer Act

These two are among the numerous laws that govern payments-related activities. They specifically require financial service providers to address transfer errors.

  • Exchange Act and Securities Act

ICOs (Initial Coin Offerings) are typical among fintech startups. These activities have been controversially treated in the US, but the Howey Test set a precedent. The test reviews the ICO’s legal status. If it meets the requirements, it’ll be subject to the Exchange Act and Securities Act.


The regulations are applicable to organizations that conduct email marketing.

How to Navigate the Uncertain Regulatory Compliance Landscape

Organizations are subject to specific regulator obligations, so there isn’t a single straightforward procedure to beat the compliance hurdles. Still, you can consider several practical steps if you wish to comply with fintech regulations. Let’s explore:

  • Recruit wisely – You need a dedicated team to embed a compliance culture into your company. Ensure your company has expert knowledge on hand right from the start and treat this as a vital element of your operations.

  • Allocate resources precisely – Compliance with fintech regulations isn’t a one-off task, so prepare to handle it as an everyday problem and dedicate adequate resources to the tasks.

  • Partnerships work – Sometimes, it’s sensible to partner with an existing organization with the relevant licenses and certification. But understand all the terms before entering such deals.

  • Focus on the future – The fintech regulatory landscape shifts constantly, and relevant laws are in a state of flux. You must stay alert and prepared for any legislation changes to navigate the uncertainties.

  • Consult – It’s absolutely vital to talk to a compliance partner if you’re experiencing compliance issues. This is particularly important when making any concrete decisions. Experienced compliance agencies will help you understand your regulatory obligations and how to meet them.

The past few years have seen fintechs turn into a significant component of the regulatory landscape. However, the industry has lots of regulatory needs uncertainties, as highlighted above. Fortunately, you can efficiently address your compliance needs by understanding the overall legislative landscape and following the best practices.

Most importantly, a robust compliance program could be the tipping point for your company’s profitability and operations success, and that’s where Riddle Compliance comes in. So don’t delay reaching out for professional guidance through your regulatory challenges.

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