Neobanks have become the next big boom in the world of fintech, helping millions of people connect with financial tools that had previously been inaccessible. That hasn’t stopped naysayers from all corners from decrying the relatively laissez-faire space in which neobanks operate as risky for consumers. As of mid-April 2022, those notes of caution are being issued from the most prominent platform yet: the U.S. Senate.
“Fintech companies that want to act like banks – but without the consumer protections and safeguards that actual banks must adhere to – put people's hard earned money at risk,” said Senator Sherrod Brown, Chairman of the Senate Committee on Banking, Housing, and Urban Affairs.
Though similar accusations have been leveled at fintechs for years, Brown made frequent reference to a recent incident in which users of the neobanking app Chime lost thousands of dollars and the use of their accounts. “Consumers shouldn't be getting locked out of their accounts, leaving them with no way to access their money to buy groceries, pay their bills, or make rent,” Brown continued in his statement.
For their part, Chime struck a note of enthusiastic compliance with federal oversight. According to a spokesperson for the company, “We take our responsibility in the areas of regulation and compliance very seriously,” and Chime and its partners assiduously comply with federal scrutiny through FDIC-insured financial institutions.