fintech

Regulators warn about fraudsters creating synthetic borrowers
Information cobbled together from multiple people used to make fake identities, establish credit

The Federal Reserve has issued warnings about synthetic identity fraud and is expected to release a report in early 2020 outlining ways that financial companies can mitigate the problem. (Caroline Brehman/CQ Roll Call file photo)

The financial technology industry that’s upending consumer finance could be the solution to a kind of identity fraud that’s dogging traditional banks and fintech companies alike.

It’s called synthetic identity fraud, where instead of stealing one person’s information, criminals synthesize a false identity using information from many people — usually those unlikely to monitor their credit, like children, the elderly, prisoners or the homeless. Fraudsters then establish a credit history for the fake person over time until they can trick banks or financial technology companies into lending them money.

The Transfer Agent
Fintech Beat, Ep. 31

Public blockchains such as those that underpin cryptocurrencies like bitcoin are most at risk because anyone can participate. (Dan Kitwood/Getty Images file photo)

Johnny Isakson farewell highlights challenges in Georgia Senate race
Political reality may make it difficult for his GOP successor to follow his bipartisan lead

Georgia Sen. Johnny Isakson walks to the Senate floor Tuesday to deliver his farewell address. (Bill Clark/CQ Roll Call)

Republican and Democratic senators took a break from their predictably partisan conference lunches Tuesday afternoon for a bipartisan barbecue honoring Sen. Johnny Isakson.

The outpouring of tributes made clear the Georgia Republican’s successor will have big shoes to fill, and the political reality is that financial executive Kelly Loeffler, whom Georgia GOP Gov. Brian Kemp will announce Wednesday as Isakson’s replacement, might not have an easy time following his bipartisan lead.

Curing the Small Business Recession
Fintech Beat podcast, Ep. 30

Big data poses big problems for banks, experts say
Risks to security and privacy cited as products and services develop rapidly

Minnesota Rep. Tom Emmer says big data systems generate “astounding” amounts of data. “This is the future, and there’s no going back from here,” he said at a Nov. 21 hearing. (Bill Clark/CQ Roll Call file photo)

The financial services industry’s use of big data and data aggregation tools has the potential to benefit millions of consumers but also could disproportionately affect the privacy and security of vulnerable populations.

That’s the take of experts who testified to the House Financial Services Committee’s Task Force on Financial Technology last month, hoping to convince lawmakers that more attention is needed on the issue.

Georgia governor defies Trump with appointment to Isakson Senate seat
Gov. Brian Kemp has chosen Kelly Loeffler, but Rep. Doug Collins may run anyway

Georgia Sen. Johnny Isakson is resigning at the end of the year. (Sarah Silbiger/CQ Roll Call)

Georgia Gov. Brian Kemp is expected on Wednesday to appoint financial executive Kelly Loeffler to the Senate seat that Sen. Johnny Isakson is vacating at the end of the year.

The Atlanta Journal-Constitution, which broke the news that Loeffler would be Kemp’s pick, reported the timing of the appointment. Isakson is scheduled to deliver his farewell address to the Senate on Tuesday.

American competitiveness requires a smarter Congress
Increasing science and technology advice would be an important first step

As technological innovations rapidly reshape the American economy, it’s time Congress took notice and brought itself up to speed, Grumet and Johnson write. (Bill Clark/CQ Roll Call file photo)

OPINION — Technological advancements are rapidly changing the American economy and workforce. At the same time, lawmakers increasingly appear to lack the capability to understand and respond effectively to this transformation. Flip phone-wielding lawmakers may have been cutting edge in the 1990s, but not in today’s Congress, which routinely grapples with complex scientific and technological issues such as gene editing, cryptocurrency, facial recognition and digital privacy. Not to mention, they must oversee $150 billion in federal R&D funding that helps fuel future innovations.

Out of 541 members, the current Congress has only two scientists and eleven engineers. Most have backgrounds in law or business, which is obvious when hearings start to get technical. This gap has to be filled by congressional staff and support agencies. Yet only 15 percent of senior congressional aides themselves think staff have the knowledge, skills and abilities to support members’ official duties. And just 24 percent think staff have enough access to high-quality, nonpartisan expertise within the legislative branch, according to a 2017 survey.

Banks see Fed payments proposal opening door to fintech rivals
Banking industry pushes for tight rules on companies moving into banking-like services

Prompted by the Federal Reserve’s plan to build an instant payment system, banks are pushing for tight rules on tech firms moving into banking-like services. (iStock)

A plan by the Federal Reserve to build its own network to transfer funds quickly has pitted technology firms seeking a foothold in the financial sector against banks that have traditionally dominated the payments business. 

Tech firms see the new payment system as an opportunity to get into the payments business, and banks, facing a new rival, are pushing for tight rules on companies moving into banking-like services, according to advocates on both sides of the issue.

House leaders give modernization panel more time
A second year of work ahead for committee that seeks to make Congress more efficient

Chairman Derek Kilmer, D-Wash., right, and vice chairman Rep. Tom Graves, R-Ga., are seen during a Select Committee on the Modernization of Congress meeting in the Capitol in March. (Tom Williams/CQ Roll Call file photo)

Like most any fixer-upper endeavor, renovating Congress for the modern era will take at least a year longer than originally planned.

The House’s temporary Select Committee on the Modernization of Congress is on track to get more time to finish its effort to update the legislative branch amid the increasing political polarization of the 2020 elections. The House Rules Committee approved a rule Wednesday extending the modernization panel through next year. The full chamber voted Thursday, making the extension official.