Hurricane Sandy Broke Banking w/ Phil from American Fintech Council

Banking's interesting too. There are people in Silicon Valley who may say we're at the point where we're doing 10x leveraged loans for you to buy derivatives on gold markets in the Congo. What do you mean you don't have access to a bank account? It's a big problem.

Not everybody has access. Here is the challenge. The challenge is you want to create innovation, you want to create sort of proper opportunities and appropriate opportunities for consumers to engage, but you don't want to sacrifice the consumer protection that has been built into the banking system for the last 200 years. Banks are closing at a historic rate, particularly in minority and rural communities.

And so we've got to do more as an industry. And I think that's what we're trying to promote. Everybody, welcome back to Risk and Reason. You've me, Eli.

This week I'm joined by a friend, a competitor in our FinTech Fantasy Football League, and one of the smartest people I know in this uh in fintech more broadly banking. That's Phil Goldfetter from American FinTech Council. Phil, thanks for joining us. Eli, thank you so much for having me.

I think you've done me a bit of a disservice. Uh as I recall, I'm a returning champion uh to the fintech fantasy league. Uh defending champion, I should say. Um, and I'm eager to once again, you know, come away with a winning season.

And you haven't really missed a beat by us moving league formats this year. You you haven't missed a beat. You're very adaptable. Uh yeah, I will say this.

I do not enjoy the current format. Um, I do it begrudgingly, but you know, getting to be amongst such uh such an amazing group of peers, it's you know, you know, we put it up with things like that. You're too kind. Well, we appreciate you you you having uh the perseverance to move from ESPN to sleeper and to join us on Riverside.

Phil, you have a really interesting background in that. I think a lot of people like myself jump into uh companies that are in regulated spaces and we have no actual qualifications. You've spent a lot of time in politics. Uh you and tell me what I get wrong, but you worked for the Bloomberg uh administration in New York.

You worked, I want to say, in DC for Chuck Schumer, uh, and you were a member of the State Assembly. How did those experien one, like, how did you get into politics and and how what what drew you to that? And that what did you always uh like were you always focused even back then on how government should be working with companies? Or tell us a bit about that that background and narrative.

So that's you know, I mean, I need about a half an hour just for that question. Um the answer is I, you know, I follow in my father's footsteps, not in the sense of politics, but in a commitment towards community and public service. I remember from a youngest age sort of dragging me out on a cold night to go attend a civic meeting because we were gonna, you know, sort of complain about uh uh the streetlights and and the safety concerns because of the streetlights on our block brow.

And you know, it was sort of those, it was that experience that made me realize of what is important. Um and the idea of actually building a career around it was something I didn't think about probably until I got to college. And I realized that, you know, you you could really make a difference and impact change by getting engaged. And so many people like to have opinions while they sit on the sidelines.

For me, as I hope you've learned, we like to really, I like to get into it, right? And I like to sort of be a part of that solution and be a part of the fix. And so I I sort of, as you mentioned, sort of propelled through government every stage. I did, you know, work for executive, for legislature, city, state, and federal.

So I really covered every aspect of government. I think what really drew me into the fintech space and ultimately why I made this transition was I represented a district uh in southern Queens that got devastated during Hurricane Sandy. It wasn't too long ago. We just passed our 13 year anniversary since the devastation.

And you really don't know, you know, what you have until you've lost it all. And we talk about my house was flooded, my office was flooded. The district I represented, 85% was either flooded out or burned down. A lot of sort of the articles around me sort of still commemorate some of the work we did and some of the struggling that people went through.

And some of the legislation that I passed in Albany was specific to how do we solve for you know city infrastructure challenges and problems. What I realized in all of that was sort of the challenges as it related to banking and financial services accessibility when you no longer have access to to sort of traditional means. And, you know, I there was issues with the insurance industry, but you know, it's so funny because I think what bothered me even more, because I think there's an expectation that the insurance industry is going to be slow.

And I apologize to anybody in that space. But once you got the check from your, you know, from your insurance company because you finally settled with them or you finally got uh got uh got the check, for those of you who who own a home know that you don't actually own your home, right? The bank who is helping, you know, it's your mortgage company holds your own your home and you pay them. Eventually, after 40 years or 30 years or 20 years, you eventually own your home.

But that means the insurance company doesn't cut you a check. They cut a check jointly to you and to your mortgage holder. And if your mortgage holder was a big bank, uh it was a little bit easier. But there are mortgage holders all over the country.

And we had zero access and zero ability to get in touch with banks, to be able, even if we got into banks, how are you gonna move the money around? Because you just don't have access to what you traditionally were used to. And so I realized that if I were ever gonna transition into the public sec into sort of the private sector, I thought that financial services was really would be a good home for me, but not just financial services, thin tech innovation. How do you create accessibility for families, not just during a disaster, but but all the time as families require that access, you know, in rural communities and minority communities, communities, and really everyday families who are just transitioning into uh into innovative tools to access their financial services.

And so that's really what drove me. I spent seven years uh working at Cross River Bank, um building out their public affairs department. And the American FinTech Council seemed like, you know, the the next best and perfect spot for me in terms of taking all the collective experiences from my career and not just sort of advocating on behalf of any one single company or entity or even vertical, but really being a champion for the entirety of the ecosystem. And so that's sort of again a long story.

And and just in honor to like, and again, I think you're a perfect example, and the company like Footprint is a perfect example when talk about things like, you know, uh regulatory technologies and things like identity verification and and so many other uh, you know, aspects that companies like Footprint bring to the ecosystem, which tells a story that is not just about a consumer-facing product, right? It's also about all of the technology and all of the innovation we're building in to ensure that consumer is protected.

And so it's about creating the right balance between consumer offering as well as the innovative technologies that are keeping them safe at the exact same time, and why we're so excited to have Footprint as one of the many diverse companies as part of the association. It's an amazing background. I appreciate the kind words. You bring up a fascinating from the Sandy Recovery.

Um, to make a uh a bit of maybe a strange analogy, I think people are surprised by the stats of how many Americans don't have access to broadband internet. People think that this is obvious. What people we have Starlink, we have very fast Wi-Fi, why don't people have broadband? Banking's interesting too, in that you know, there are people in Silicon Valley who may say, we're at the point where we're doing 10x leverage loans for you to buy derivatives on gold markets in in uh the Congo.

What do you mean you don't have access to a bank account? It's a big problem. Could you maybe touch a bit more on that? And like what is the gap of why why is it so difficult to give fine access to what we maybe view as basic financial services to so many Americans?

So I think what you just said, you you hit it, you know, at it uh on its head in that not everybody has access. I mean, I you know, again, I spent time in the state legislature sort of on legislation, on efforts, on, you know, creating opportunities to create sort of access to broad brand, even here in New York City, right? We're we're challenged. And for those of you who ever visit New York City, sort of the the newest towers that are going up, which we hope this is the final, the last, you know, sort of stage of creating some of that access in New York City for so many families who don't have it.

But it's also it's it's number one is access. Number two is consumer demand for for change. And and I think oftentimes there's this narrative driven by, you know, those who are purporting to be consumer groups and at, you know, and and are looking to help consumers who will say this is really just about industry's desire to make money, right? Industry couldn't make money if consumers weren't demanding these products.

And I give this analogy a lot. I bank differently than my father banks. My my daughter banks differently than I bank. My daughter will never ever see the inside of a branch, right?

She has four different apps. She has, you know, access to all of her money. She's able to move it around any which way she wants. You know what the biggest challenge for my daughter is?

When my father writes her a check, she oftentimes will give it to me so I can deposit it and push it into her account so she can then move it as she wants to. And so it's a question of what consumers are demanding. And so here's the here is the challenge. The challenge is you want to create innovation, you want to create um sort of proper opportunities and and and appropriate opportunities for consumers to engage, but you don't want to sacrifice the consumer protection that has been built into the banking system for the last 200 years.

You also don't want to take away the responsibility of bankers from protecting the integrity of the financial services ecosystem. And so it's a very delicate balance, but ultimately it's not just about companies' desire to make money and build an industry. It's about finding new ways to serve consumers. And to me, that's everything, right?

And so, you know, meeting consumers where they are, you know, sometimes it's about a place where, quite frankly, they don't have uh they don't have access to truth uh traditional services. And by the way, it's no big secret, banks are closing at a historic rate, particularly in minority and rural communities. And so we've got to do more as an industry. And I think that's what we're trying to promote.

The American FinTech Council is a standards-based organization. We're always looking to find the right uh middle ground to ensure we're creating that access. So my daughter could could invest her money and plan for her future and start saving for college and start saving for the things she wants to do, but at the same time, not worry that that money is going to get stolen or gonna be, or she's gonna be scammed and that she is kept safe as the evolution continues. It's a great point, you know, it even in the couple years for since starting Fulbright, we've had two very interesting FDIC-related occurrences.

One was with Silicon Valley Bank and First Republic in kind of the tech banking crash. And then we've seen with Synapse and Evolve uh another example where some, you know, we don't need to get too political here, but some definitely say the FDIC should be coming in here and backstopping this. And that trust is at the core of American banking. And, you know, even if these disclosures weren't technically clear, uh it's still required.

What does trust mean to you? Because it I think you could, if you want to get very philosophical, claim that uh American GDP is built on trust in the institutions. And if you go back to OA, if you go back to any of these crises, the idea has been that the US will make sure that the institutions that are too big to fail, uh, that you can trust them. What do you think about that as a concept?

How do you reconcile that with then startups are not chased bank and they may be providing more services? You talk about banks are closing an unprecedented rate at underserved communities. Uh, there may be uh Chime or companies such as that maybe will be serving that better. How how do you think about trust and the role of that here?

Goes to the old, the old reason why uh community banks used to be built the big marble pillars in front of them, right? Because that was a a statement, a bold statement of strong foundation, strong pillars, and that your money is going to be safe, right? And I think that hasn't changed, right? And that's also what something we talk about at the American FinTech Council a lot.

We represent both the fintech companies and the most innovative companies who are serving consumers, but we also represent uh innovative banks, right? And it used to be the narrative that like only one of them could survive or all only one of them could be doing well was false, right? The idea is that they should be worked together to merge both of those ideas. You want the trust and reliability of a community bank, but you you want to combine it with the innovative offerings of a fintech company.

And to me, that is the best pathway forward. I think the biggest challenge that we have is the regulatory system has not kept pace uh with the innovation in financial services. And that's not something that is is new. We've been talking about that for many, many years.

Only in the last, I would say, maybe 12, 14 months have we actually started to see some progress and some evolution. Something that going back, you know, you mentioned Silicon Valley Bank. The biggest challenge was it was very easy to blame on fintech or crypto, right? But quite frankly, it had nothing to do with it.

It really had nothing to do with it. It was really a, you know, it was it was a question of how are we actually looking and determining risk, you know, and and how we think about risk and and and how are we thinking about manage managing those structures. It was a nice narrative that crypto caused Silicon Valley Valley Bank's uh demise, but it really, really had nothing to do with it. And and when it came back to when it came to evolve into synapse, again, I think we were still very early on in the industry uh when that sort of came together, when that relationship was built.

And I think there was a lot of unknown, right? We didn't know what was the best way. How do you think about third-party risk management? How the regulatory innovations really didn't necessarily exist as they do today.

And so I think a lot of mistakes were made. And I think, again, there are those who are always going to look to take advantage of consumers, unfortunately. And I I uh to me, I look at at a company like Synapse, who really, you know, sold a bill of goods to many banks and talked about all these things that they said that they could do, but ultimately they couldn't do. However, it was the bank's responsibility.

I think that's something, you know, a lesson learned is not that banks should not be in the innovation space and that banks should not be innovating. They need to recognize and understand what is their responsibility within that partnership and what is the responsibility of the FinTech company. And it it's always unfortunate when you have to learn lessons uh on the backs of mistakes being made, but unfortunately that's the way it is. I think the system today is much stronger for it.

And I'll point specifically to a couple of banks last year or in the last two years that have gotten consent orders, right? You saw there was a period of time where there was, you know, maybe 10, 12, 13 banks that had gotten consent orders and specifically related to their engagement with innovation, their engagement with think tech companies. And there was a few of them who were bold enough, you know, to basically say the consent order is not a challenge, right? It's it's a recognition that we're not perfect.

It's a recognition that we can make it even stronger. But thanks to this, we're gonna double our efforts, we're gonna, we're gonna triple our efforts, and we're gonna make our programs and our offerings that much better. Today, many of those banks are literally leading the charge who have already resolved many of the issues that they had with the regulators at the time, who have already kind of picked up those pieces, recognized them and their mistakes, and have built themselves even stronger.

And so again, it doesn't mean that like, you know, you're you're looking for, you know, a consent order or regulatory challenge, quite the opposite. You're not looking for it. But when it comes, you're not afraid of it. And you embrace it as a mechanism to learn, to understand the challenges.

And again, I'll say this is, and I think you know this, to look to the regulatory technology companies to say, how can I, at least from the bank perspective, increase my innovation on the regulatory and compliance side as quickly as I am in the in the consumer offering side. And to me, that's a lesson that that we have seen uh we that that many companies have learned. And I'll I'll give you one one sort of one more um one more example is I I I've been in this industry for almost 10 years now, and I can tell you that more and more fintech companies are employing chief compliance officers today than ever before, right?

Which to me is a recognition, not that they're taking over compliance, but they're trying to bridge the understanding gap between their partner bank and the work they're doing. And so the banks unfortunately don't have all the time to teach every fintech company sort of the the nuances of the compliance and regulatory structure. And those tech companies, based on the lesson learned over the last few years, have embraced that and taken that upon themselves. And so you're seeing more and more chief compliance officers at fintech companies, which makes their plug-in into banks that much more seamless because they're starting to talk the same language.

Phil, one one thing I love about AFC is you bring a lot of people into a room who normally aren't in a room together. And it's not just for a summit, it's for dinner. Uh, it's for and I think that when you get when you just break bread with people, you see this crazy thing happen where you just start speaking. And I think normally when you're in uh on a Zoom, you're button-uped, you're afraid, and you're performative.

When you get people together in a room, you connect as people. To me, it leads to something that I'm curious your perspective on, which is what are the what's the one question or questions that fintechs are afraid to ask banks that they should be asking so they can better work with them? And vice versa, what's the question or two that banks should be asking fintechs that they're afraid to? And my guess is that because these questions aren't being asked, uh work that could really be uh influential and help people isn't getting done.

So I'm curious, what should people be asking that they've been afraid to? So, first and foremost, thank you for that. You know, we built the American FinTech Council, I think, like many trade associations, see themselves as regulatory policy engagement. How do you build a larger voice to impact regulatory structures for an emerging industry?

What we have found, as we've now grown to to well more than 150 members, is that there we've created a real community effect. Um, and partly is because of this is an awesome industry and an awesome ecosystem, and you're a good example of that. But also because, again, it's sort of, I think the not just the energy, but the the warm and fuzzy feeling that I like to say that I bring to our network and that it it's we don't do anything for the sake of doing it, right? We create opportunities to have meaningful dialogue so we can actually move the needle.

Sometimes that's within the industry itself, right? Sometimes that's an internal facing thing where, you know, your Solving nuanced and interesting problems for other members. And again, I think what you said is exactly right. You know, everybody's a little bit nervous on a Zoom.

You put people around a table, um, and it creates interesting opportunities. And I'll I'll point, you know, we brought all of our CEOs or many of our CEOs to an event in July. And I think to start at dinner, everybody was a little bit like nervous. I don't know what to make of everybody else.

And some people had relationships. But, you know, I think once you're there and you're sitting next to somebody and they'll I'll say it, you know, you have a glass of wine, you everybody warms up, right? You nobody is, you know, sort of everybody's guard comes down and you're able to have those exact conversations, which I would argue, you know, for nothing else, these are conversations, these are questions you're asking that you generally struggle with internally. The idea to understand that, oh my God, there's another guy who has runs a similar business to what I run, and he's facing the same challenge, or even better, he faced it a year ago, and here's how he solved it.

I don't have to tell you what that means in terms of savings, and and I apologize to our outside council friends, but savings at outside council and the various consultants who are also our friends. So I, but but I again that community has been real. And we talk about sort of the value proposition for an organization like AFC. We still do our policy and regulatory, and we still we spend a lot of time in our working groups, but a big part of what we do now is really trying to convene those those opportunities for people to come together.

To to your question, you you uh it's funny, it would have been the perfect question a year ago. I would argue today, and I'll say we'll take some credit for that, and I'll give you and and all of our members in the American FinTech Council credit, no one should be afraid to ask anyone. And if you are, then maybe you're doing the wrong thing or you're thinking about something the wrong way. What I mean by that is if there is a level of uh or there is a lack of comfort between a fintech company and their bank partner or their potential bank partner and they're afraid to ask a question, that should raise a lot of red flags.

Um you know, about I'll give you a good example, right? Like we learned through the consent order sort of period of time the the just the how meaningful it is and and how appropriate it is to have your board fully engaged in the work that you're doing. And so if a fintech company is afraid to ask bank leadership, you know, about those questions. Is your board now engaged?

What is the oversight? What is the level of oversight? How do you think about the, you know, historically, a fintech company says it's not my business. I don't know how to ask that question, I don't want to ask that question.

But, you know, we've learned a lot over the last few years. And I hope if people are taking the lessons out of those learned experiences and the shared experiences, then if they there should be nothing that a fintech company should be afraid to ask their bank and a bank should be asked or fintech company. And I want to say there are those who are gonna call me and say, eh, that was a cop-out answer, right? I'm about to put your feet to the fire.

Don't worry. I'm gonna ask you a question. Yeah, no, I have no doubt. Because I, you know, it it's it's a question of, you know, again, we look at all the and this is going back a couple of years.

So what's your Twitter handle? We're gonna have our listeners reach out to you if there are questions. Now that they can, and it's it's at YP Goldfetter. Um so feel free or hit me up on LinkedIn.

Um we're we're very active, as you know. We we love to engage. Great content. And we love to be proving raw.

The best part of what we get to do is is we're building consensus. Eli, I I hope you appreciate what you get to do every day, is that you are building a mer in an industry that did not exist before you, right? Not in the way you're doing it. And so when you think about what we do, and and you can see, because I'm gonna start to get on my soapbox now, so I'm getting excited.

We get to, you know, 200 years ago, over the last 200 years, a lot of people before us have built the structure that exists today. You and I are building the structure that will exist in 100 years from now that the next group of innovators are gonna try and change for the new products. And so we get to be a part of the future of financial services regulation. We get to be a part of the future of financial services.

And that's not gonna happen when one ecosystem or company tells another one what they're doing right or wrong, or when that one tells that one what they're doing right or wrong. It's when we sit around those tables, we have those conversations, even more importantly, when we do it in concert with our regulators. And I'll, you know, you taught, you know, I just mentioned our CEO event. Um, and I don't think you were at this one.

I think somebody from Footprint may have been there. We did a Chief Risk and a Chief Compliance Officer event in Washington. We've done them before. They're always great because you had just chief risk and chief compliance officers who come together.

You know what made it awesome is that every regulatory agency had a representative there as well. Not just, you know, you know, somebody in the middle of the organization, but you had agency leaders from the FDIC, the OCC, the Federal Reserve. And I remember it so distinctly that there was a panel, we had a panel presentation, and someone at the FDIC on the panel says, wait a second, I want to hear what you have to say. Don't ask me questions so you can get my opinion.

I kind of want to hear what your challenge is. And it created, it was sort of that, wow, look what we were able to build. It was an honest, off the record, sharing, it's sort of dialogue that I will, I tell you, because I've seen it first and created change that has led to sort of, you know, uh opportunities for consumers to be even safer, for innovative companies to get a bit more clarity and to understand. And then for further engagement, right?

You know, there was someone who joked in the middle of one of the sessions, like, oh, I want to speak quickly before the FDIC gets here. And I said, Well, all due respect, the FDIC is sitting right behind you and he's been sitting there for the last half an hour. That's awesome. Eli, we shouldn't be afraid of those things.

And I think you and I saw it firsthand. There was a time in this ecosystem, in the a period within this ecosystem that everybody was afraid of their regulators and afraid of regulatory compliance and oversight. And I think we've turned the corner not to abandon oversight, quite the opposite. We've embraced it in a way that enables us to continue to evolve it to make it even stronger, to make it even better.

So I I completely agree with uh what you're saying about just what about an AFC and in Nashville. I I'll shout out who became dear friend, Steve and Stacy Bishop. Uh you sat me down in the table, and I was lucky enough to be sitting next to Stacy, and then Steve came over, and we kept in touch, and a couple months later we went to the Chiefs Eagles game together, and they'll listen to this, so I won't make them fully relive the result of it. Uh, but it it it there is something true to I think breaking down barriers.

Um now what I'll say is footprint, we've been spending a lot of time recently on AI products for compliance. And it's this interesting paradigm in that it's not that we are necessarily afraid of having conversations, but the difficult thing is we don't know how to have them in some cases, in that there are things that are magical about how AI can really help compliance officers at banks. And we've been blown away by the response and what how people can use it. At the same time, as we know, these models are not 100% explainable.

And that is pretty scary in a world where you need you all the time we hear that Fulfrum from the beginning has not been a black box. And competitors that are black boxes are not approved at banks. With AI, it's something that we see banks really want, but we we we can give them a confidence score, but it's a confidence score of a confidence score. How should we speak about that?

Uh to me, you know, it's funny because there was no way we were getting through this conversation without talking about either AI or digital assets or both. I was just waiting for you to come at me with it. Yeah. It's, you know, I so let me say two things, right?

We often time there are oftentimes sort of keywords or the sexy words of the moment that everybody loves to build into their panels. While, you know, sort of I think digital assets is kind of like, you know, it's sort of pushing AI. They're they're kind of fighting for the attention, and you see it. Yeah, money 2020, it's like stable coins hits you with a punch, and then uh agentic commerce hits you with a it's a real rope dope uh of the two.

Oh, it's hilarious. I I tell you, I I went last you know, not too long ago, I went to the uh uh and I forget the title of it, but it was at the the innovative payments um uh uh conference at the Federal Reserve, right? So we went to the Federal Reserve, the historic Federal Reserve for an innovative payments conference that was 90% about for uh about digital assets. Um again, I I don't think was a it was a great conversation, uh a little bit controversial depending on your take.

Um, but like it's driving the conversation, and and which is going to the point I was trying to make. Do we have the real use cases? Do we understand what it's doing? And I think right now, I would argue we should be spending a lot more time on AI.

I'm not saying to abandon digital assets, but because AI is starting to become real. I think, you know, two years ago, it was a lot of talk and it was the only buzzword, right? And and crypto was kind of digital assets, crypto was kind of dead for a bit, right? It's now had its resurfaces, it's having its resurgence.

But AI was still was sort of the talk, but AI wasn't really happening in real time. I mean, companies were talking about implementing AI, but they weren't actually doing it. Right now, companies are actually doing it, right? Like you're at you're seeing the real use cases for AI.

Um, and we need to make sure that we're having those real conferences. We partnered with a uh a company to do an AI um conference specific uh in Utah not so long ago, where I had the opportunity to uh interview Jonathan Gould, who is the controller for the currency. And I, you know, it was funny because I, you know, you never know. And as much as I I've known Jonathan for many, many years, and and we've had I've had the privilege to work with him on a lot of things and excited that he is now the controller of the currency.

But in talking to controller Gould, he asked the very basic question. So, how do you think about uh about AI and more specifically, maybe broadly, about innovation in the financial services space? And what he said was, which was again, it shouldn't be profound, but it was, is that we have to rethink the way we talk and consider risk and and discuss risk. And quite frankly, banks and financial services companies that are not innovating are potentially more risky than the ones that are.

And to me, that was the highlight of the day, right? Because that is a full-on embracing of the idea that banks better figure it out, right? You're you can't offer services at scale if you're not thinking about your compliance at scale. And AI is at the front of that, and and you know that better than anyone.

And is that though on a bank to is it a does a bank have to figure it out first or a regulator? Like, and I guess the other way of thinking about that is if for you, is it fair for a bank to say, hey, we want to use this, but until the regulators put out a statement on how we can use probabilistic models in AML reviews, we're just not gonna touch it. And the shame of that is that if we take, you know, going back to what you spoke at the beginning, underserved communities, uh, community banks often don't have that much staffing on this.

So reviews take longer. So for us, we get really excited that well, we can make this quicker. What would you tell that bank in that scenario? You know, again, I I would tell them to join the American FinTech Council, right?

I say that not because, you know, we're the only ones who are or are doing this because I'm gonna tell you a great story. And when I back in in 2006, I worked for for Mayor Mike Boulevard here in New York City, and I would oftentimes be dispatched to solve, you know, large challenges and large problems. People love to complain. I say that about banks too, by the way.

Entities love to complain and scream about their problems. And I remember that one day I was in this community and someone said, We're gonna fight City Hall to get the change we need in our community. And I was quoted in the paper that week saying, You don't have to fight City Hall and you don't have to chase City Hall. I'm standing right here.

Tell me what you want. That is the regulators we have in office today. Controller Gould, who I just talked about, uh acting uh acting FDIC chairman Travis Hill, uh, Governor Mickey Bowman at the Fed, who are committed to understanding the innovation from the people who know it best. And so you don't have to fight them.

Banks have to take the opportunities and change the way they think a little bit. And that to me is the hardest part in that banks are not used to engaging with their regulators like that, right? Traditional banks are afraid of their regulators. We gotta tear that notion down.

The regulators are here. They're here. You don't have to fight them, you don't have to hide from them. You have to engage with them.

Someone told me a story how when he first got to his bank, he reached out to their bank examiner just to ask a basic question. The CEO of his bank sent an email company wide. Company wide, the CEO sent the email. Who reached out to the regulator and dare do that without approval from the compliance department, right?

And he's like, whoa, like you need approval to re like there should be a give and take all the time without a fear of, oh my God, are you gonna say anything that's gonna get you in trouble? There should, it's not a gotcha game. Consumer protection is not a gotcha game. People call me like an idealist, right?

Like I but I fundamentally believe it. And that is something that we infuse into the American FinTech Council, and that I don't, I don't want to hear the talking points. If we can't move the needle, then let's move on to the next thing, or we can't. When it comes to AI, as you know, we have found open doors uh with the FDIC, with the OZC, with the Fed, with the SEC, literally across the board.

I think, you know, the the challenge for us is sort of getting, again, the action, right? What are the next steps? How are we gonna see that action? And then even more so is sort of the state level, at state level engagement and state bank regulators and so on.

And so there's a lot of work to be done. But the industry's got to stop complaining about what doesn't exist and be a part of that change to engage. And, you know, again, you don't need to join AFC. I hope that everybody listening to this does join the American Intown Council, but it just means you have to invest the time and the energy to think about the relationship with your regulator, knowing that while you're doing that, we're working in Washington and across the country in regional offices to sort of get them to understand and to make sure that they are not what's sort of being um uh they're they're not being um sort of, you know, playing, but they're not playing the gotcha game, right?

That their being is open and honest. And and it goes back to that event we did in July where you have chief compliance officers, regulators, who again, it's my so to this point, I would argue it's my proudest moment because it it shows, number one, that we've built sort of a great ecosystem. But number two is that the way government is meant to work, right? Government is not meant to get you.

It's regulators are not meant to get you. They're meant to sort of give you the tools so you can continue to serve their constituents, period, in a safe, honest, fair way. And that's I think what's in your heart and soul. I think it's what in my heart and soul.

And unfortunately, there are bad actors out there. There are absolutely bad actors who look to take advantage. There were people in, you know, going back to my my for the earliest stages of my time in office when, you know, Hurricane Sandy hits, families had no access to money or food, and people were gouging for bottles of water or for a gallon of gasoline. There are always bad actors who are gonna take advantage.

That is not everyone, and that is not the norm. Those are the anomalies. You can't regulate for the anomalies, you have to regulate for the norm. And I think we're we're finally in a position in time.

We have to build something. But I will end. I know we're we're coming low on time. You actually have to build something, and we've got, you know, time right now to do it.

For anybody who says, oh, everything is great, we could just go about our business and not invest in building regulatory clarity and invest the time and the energy it takes to explain what you're doing, as quickly as this all started, it could all end. And we saw that again, going from you know, into 2020 when when financial services regulators made a shift. And in response to what they perceived was happening before they got there, they clamped down on everybody. Right?

I think it's time we we put the politics aside when it comes to financial services regulation and policy, and we actually build a meaningful uh foundation that you and I could be proud of that our kids will use and that their kids are gonna try and change it. I love it. It is so well said. My final few things are a couple rapid fire questions for you, Phil.

Uh and the you'll see these are probably a bit less intense regulatory from a regulatory perspective, but we want to know the person behind the council. Phil, what's your favorite movie? Uh oh god, uh Rambo First Blood. Don't read too much into it.

I would say just I would say just don't read too much into that answer, mostly because for some reason my parents as a seven-year-old let me watch it over and over and over and over again. Um, and so it's just, you know, baked in. I love it. Favorite podcast other than Risk and Reason?

Uh well, so you said favorite book? I'll uh favorite book is probably Barbara Barbarians at the Gate. Burns at the Gate. That's fantastic.

Did that lead to regulatory action? Uh it was it wa it it was excellent. I'm probably too big to fail. It's probably close second.

Um but but again, just it's something I never thought as a kid growing up that was something I'd be getting into and was just books you could not put down. There that's a great reading list. Um, Phil, thank you so much for coming on. And thank you so much truly just for your passion.

It is so so needed in that I think people can get caught up in the what can't we do? And not enough people are are bringing so many years of service and work to people like you are. I was saying the point of all of this at the end of the day is helping people. And how do we actually go about doing it?

And you've brought together a group to do it. So thank you so much. We appreciate your time. And if you're not a part of American FinTech Council, reach out to Phil.

Come to where the meetings of the minds happen. But thanks for coming on. Isaac, thank you, and and thanks to the work that you're doing. I say that we're only as smart as the members we surround ourselves with, and and having your expertise has really made all the difference in the world.

Thank you.