The Progressive


A project of Common Dreams

For Immediate Release

Robinhood Highlights Dangers of Biden Administration Appointing Fintech-Tied Regulators

Fintech Darlings, including Michael Barr, are Rumored Favorites for Key Regulatory Positions


Last week, both progressive Democrats and conservative Republicans were united in calling for hearings on the stock-trading app Robinhood after it froze trading of several stocks, including GameStop, at the expense of retail investors and to protect the financial interests of established hedge funds.

Congress' first test of whether it is serious about the issues raised by the Gamestop-Robinhood matter is right around the corner: who will the Biden administration nominate to serve as the next Comptroller of the Currency, and what questions will the Senate ask of that nominee?

Right now, it appears the new administration favors several fintech-linked individuals for crucial financial regulatory positions, which could translate to lenient oversight over the industry for years to come. Significantly, fintech industry consultant and University of Michigan administrator Michael Barr is the reported frontrunner to serve as the next Comptroller of the Currency, a crucial national bank regulator.

Barr advises a fintech-focused venture capital fund, previously advised controversial fintech firms Ripple and LendingClub, and advises the fintech-funded think tank Alliance for Innovative Regulation.

The Comptroller of the Currency is not an obscure role. In fact, this office will serve as one of the primary regulators determining the rules of the road for fintech companies like Robinhood, including questions of data privacy, consumer harm, oversight, money laundering, and their ability to partner with megabanks and other Wall Street players.

The Robinhood-GameStop controversy highlights how fintech will pose serious and unique regulatory challenges to the Biden administration in the coming four years. Members of Congress who are raising the alarm about Robinhood and fintech generally would be wise to ask any potential nominees tied to the fintech industry, like Michael Barr, the following questions during their confirmation hearings:

  • Do you now or have you ever had an equity stake in any fintech or cryptocurrency firm, most especially those which you have advised or been employed by? If so, name the firms.
  • Do you believe it is likely that any fintech start-ups that compensated you marketed their association with you to prospective investors?
  • Have you ever provided policy, regulatory, or strategic advice to a fintech or cryptocurrency firm? If so, how much and how were you compensated, which clients have you advised, and what was the content of your assistance?
  • Do you now or have you ever invested personally in a fintech or cryptocurrency firm, or professionally advised investors in a fintech or cryptocurrency firm? If so, for how long did you have this financial or advisory relationship, and are the activities of the firms in which you or your associates invested relevant to the position for which you are now nominated?
  • Do you now or have you ever owned cryptocurrency? Have you ever been compensated or gifted cryptocurrency, most especially cryptocurrency produced by a firm you advised or were employed by?
  • Have you ever advised or been employed by a non-profit organization substantially funded by a fintech or cryptocurrency firm, such as a think tank or advocacy organization? If so, were you compensated, including via cryptocurrency? Has this non-profit organization produced work relevant to the position for which you are now nominated? When did your employment by this organization end, and when did the organization stop marketing their association with you?
  • Have you ever conducted fundraising on behalf of an academic employer by requesting funding from a fintech corporation or for-profit fintech funded organization?
  • Have you ever conducted research funded by a fintech or cryptocurrency firm, or investors in fintech or cryptocurrency firms? If so, was such research relevant to the position for which you are now nominated? Were you compensated, including via cryptocurrency, by the firm(s) or investor(s)?
  • If you have ever served in a professional fundraising role, have you raised funds from a fintech or cryptocurrency firm, or its major executives and/or financial backers?
  • If you have answered "Yes" to any of the above questions, in what ways do you expect to govern or regulate on issues relevant to the firms with which you have a past association? Do you predict that these firms will materially benefit from your governance decisions?
  • Will you commit now to not pursue nor accept employment, compensation, or other professional benefit from firms within the fintech or cryptocurrency industries after you leave this role? Regardless of your answer to the previous question, what do you predict you shall pursue professionally after your time in government service?
  • The OCC just granted its first Special Purpose National Bank Charter to a fintech firm last year, despite Harvard Law School's Forum on Corporate Governance concluding these charters benefit fintech "investors such as private equity firms" who want to bank "without the burdens of regulation." Would you grant additional Special Purpose charters to fintech firms who seek to avoid state banking regulations?
  • Do you think an association with a former financial regulator helps a nascent firm convince investors that it is legitimate and law-abiding?

The Revolving Door Project (RDP) scrutinizes executive branch appointees to ensure they use their office to serve the broad public interest, rather than to entrench corporate power or seek personal advancement.