Dive Overview:
Large fintech companies increased their lobbying spending in the first half of 2024, with some hitting new spending records, a research firm said. Report The article was published last week by the nonprofit organization OpenSecrets.
Neobanks Chime spent $1.05 million, nearly matching its 2022 total, PayPal spent more than $800,000, more than it did at the same time last year, and Block, with just under $1 million, recorded its largest six-month lobbying spending period ever..
“It is notable that new companies offering new types of services tend to be involved in lobbying efforts to limit regulation of these new services from the outset,” he said. Open SecretCompanies lobbied on a wide range of advocacy efforts on tax and payments legislation, banking, cryptocurrency and artificial intelligence. Open Secret Reported.
Dive Insights:
Many companies offering popular digital financial services, such as peer-to-peer payments and access to earned wages, spent more on lobbying in the first half of this year than they did in any of the same period last year, Open Secrets reported, citing documents filed by the companies under the Lobbying Disclosure Act.
A key topic of PayPal’s efforts was the increase in the $600 reporting threshold for business transactions on P2P payment apps and e-commerce platforms, as mandated by the American Rescue Plan Act of 2021. Significant decrease The threshold for taxpayers receiving Form 1099-K starts at $20,000.
Meanwhile, part of Block’s lobbying efforts has focused on cryptocurrencies and AI: Early Warning Services, which runs the P2P payment service Zelle, spent $180,000 in the first half of the year, focusing on a wide range of issues around payment systems, fraud and risk management.
Fintechs that offer earned-wage access services have also stepped up their lobbying investments. Earnin spent $300,000 on lobbying the federal government in the first half of the year, up from its total from the previous year. The company focused on the Earned Wage Access Consumer Protection Act, a bill introduced in February by Rep. Brian Steele (R-Wis.). Set guidelines Although intended for industry, Earned Wage Access payments are exempt from the Truth in Lending Act.
The Consumer Financial Protection Bureau said in July Suggested The interpretive rule that some Earned Wage Access Payments are subject to the Truth in Lending Act and other consumer loan protections, an issue that neobank Chime also lobbied on, OpenSecrets reported.
“Three [Chime’s] “Twenty-three lobbyists are formally working on a specific bill, the Earned Wage Access Consumer Protection Act, while the rest are working on similar areas such as early warning services,” the report said. “With approximately 30 legislative days remaining this year in both houses of Congress, many of the bills the fintech industry is lobbying for may remain in limbo until the 119th Congress convenes.”
The second-largest neobank to report lobbying spending after Chime was Varo Bank, which spent $20,000 per quarter since 2023 on broader issues related to digital banking, an effort not tied to any specific legislation..
