Financial Technology Archives - Financial Data and Technology Association (FDATA)

FDATA North America and Canadian Lenders Association Call for Fintech Participation in Canada’s COVID-19 Response

Contact for FDATA North America: Kerrie Rushton, (202) 365-6338, krushton@allonadvocacy.com
ontact for CLA: Tal Schwartz, (514) 244-2008, tal@canadianlenders.org

April 24, 2020, Washington, DC and Toronto -The Financial Data and Technology Association (FDATA) North America today announced its endorsement of the Canadian Lenders Association (CLA) proposal to include financial technology (fintech) participation in Canada’s COVID-19-related financial relief programs for small and medium-sized enterprises (SMEs). While Canada’s Business Credit Availability Program (BCAP) should provide emergency loans over the next three months to up to 100,000 Canadian SMEs, FDATA North America and CLA jointly assert that many small enterprises will not be well served by the program as currently outlined.

Small businesses that could be left out include those that:

Do not have existing relationships with traditional financial institutions who are overseeing the CEBA program;
Have legitimate credit needs in excess of the $40,000 limit of the Canada Emergency Business Account (CEBA) program;
Will not qualify for CEBA because their payroll is below $20,000 or in excess of $1.5 million;
Will not qualify because workers/owners are paid through dividends rather than payroll; or,
Will not qualify because key workers are contractors rather than employees on payroll.

The CLA proposal that FDATA North America has endorsed proposes to establish a special purpose funding vehicle through the Business Development Bank of Canada from which Canadian SMEs will access a target of $2 billion of funds within 90-120 days through CLA qualified fintech lenders. The program will provide necessary liquidity to small businesses that would not be able to access the BCAP through traditional financial institutions.

“The fintech community in Canada stands ready to assist the many SMEs that would be excluded from the BCAP,” said FDATA North America Executive Director Steve Boms. “Many have seen up to a 100 percent drop in their revenues which will continue for several months or more and face the prospect of a protracted economic recovery. While their long-term business prospects may remain sound, they need to survive through the short term. As some of the smallest SMEs in Canada do not have existing relationships with traditional financial institutions, it is imperative that fintech providers be authorized to participate in the BCAP.”

“Canadian fintechs have existing online systems and capabilities which allow them to efficiently originate, underwrite, and deploy BCAP loans,” said CLA’s President, Gary Schwartz. “Fintech lenders can provide significant operational support and leverage to the Business Development Bank of Canada and traditional lenders in deploying capital through their network of small business clients and will extend the reach of the existing BCAP.”

Other countries, including the United States, Australia, and the United Kingdom, have worked to include fintech offerings in their COVID-19-related small business loan programs. The U.S. Small Business Administration, for example, has in the past several days extended approvals to various non-bank lenders, including FDATA North America members, and is expected to approve further fintech applicants in the days ahead.

ABOUT FDATA NORTH AMERICA
FDATA was heavily involved in the UK Open Banking Working Group in 2015. In 2016, the working group’s output was published by Her Majesty’s Treasury as the Open Banking Standard. FDATA North America was founded in early 2018. Its members collectively provide tens of millions of consumers in Canada, the United States and Mexico with aggregation-based tools to better manage their finances. Existing FDATA North America members include: air (Alliance for Innovative Regulation), Betterment, Direct ID, Envestnet Yodlee, Fintech Growth Syndicate, Flinks, Intuit, Kabbage, Mogo, Morningstsar, M Science, MX, Petal, Plaid, Questrade, Quicken Loans, TransUnion, Trustly, VoPay, Wealthica and others.

ABOUT THE CANADIAN LENDERS ASSOCIATION
The Canadian Lenders Association’s mission is to provide its members the tools to innovate and grow and to foster safe and ethical lending practices. The CLA supports the growth of companies that are in the business of lending, or providing other means of credit, to small business and individuals by non-conventional or innovative means.

FDATA North America Statement on Department of Finance Canada Open Banking Report

Contact: Kerrie Rushton, (202) 365-6338, krushton@allonadvocacy.com

January 31, 2020, Washington, DC – The Department of Finance Canada today released Consumer-Directed Finance: The Future of Financial Services, which is the result of more than nine months of consultation with stakeholders in the financial services and financial technology sectors. Financial Data and Technology Association (FDATA) of North America Executive Director Steve Boms issued the following statement upon release of the report:

“When announcing these consultations back in January, Finance Canada said Open Banking ‘could better serve consumers and grow businesses and markets, contributing to the growth of the Canadian economy.’ That absolutely is true and this report from the advisory committee makes that evident.

“Now we get to the ‘how.’ How can stakeholders work together to create a system that puts consumers in control while safeguarding their privacy and security and introduces competition into the market? We look forward to continuing to work with Finance Canada to create a system that empowers individuals, families, and small business owners to take control of their financial lives.

“As Finance Canada has made clear, creating an Open Banking regime is a must-do task for Canadian lawmakers. The private sector, however, does not have to wait to start implementing consumer-centric open banking technology and services. Financial institutions, including those currently restricting their customers’ ability to take advantage of third-party tools, like CIBC, the Bank of Montreal and Scotia Bank, should not wait until they are forced to comply with government demands to let consumers be in control of their own data. They should start doing so now.”

In addition to its consultations with Finance Canada, FDATA North America has published white papers for Canadian and U.S. policymakers that outline the benefits of Open Banking and provide policy and oversight recommendations for lawmakers and regulators. “Opportunities in Open Banking” for the United States is here. The Canadian paper is here. FDATA North America analysis on the report’s findings is here.

Department of Finance Canada’s Report on Consumer-Directed Finance: The Future of Financial Services

ABOUT FDATA NORTH AMERICA
FDATA was heavily involved in the UK Open Banking Working Group in 2015. In 2016, the working group’s output was published by Her Majesty’s Treasury as the Open Banking Standard. FDATA North America was founded in early 2018. Its members collectively provide tens of millions of consumers in Canada, the United States and Mexico with aggregation-based tools to better manage their finances. Existing FDATA North America members include: The Alliance for Innovative Regulation, Betterment, Direct ID, Envestnet Yodlee, Fintech Growth Syndicate, Flinks, Intuit, Kabbage, Mogo, Morningstsar, M Science, MX, Petal, Plaid, Questrade, Quicken Loans, TransUnion, Trustly, VoPay, Wealthica and others.