Washington, D.C. (July 16, 2019)—The Independent Community Bankers of America® (ICBA) called on policymakers to be extremely cautious about allowing Facebook to proceed with its proposed Libra digital currency. In a letter ahead of Tuesday’s Senate Banking Committee hearing, ICBA said a regulatory regime comparable to that which applies to banking industry payments products and services should apply to Libra if policymakers allow it to proceed.
“The proposed creation of Libra, if allowed to proceed, would be a significant and irreversible development that would alter the global financial landscape,” ICBA President and CEO Rebeca Romero Rainey wrote. “The stakes are too high to proceed without a thorough understanding of the risks and consequences, intended and unintended.”
In its letter, ICBA said Facebook’s market power, influence, and data sharing jeopardize consumer privacy, with the integration of tech giants and consumer finance resulting in an enormous concentration of financial and technological data and assets. ICBA also cited Libra’s potential impact on global financial stability. ICBA further warned that Libra would create an avenue to money laundering without proper oversight.
If policymakers allow Facebook to implement Libra, appropriate regulation will be needed to mitigate these risks and ensure public trust, ICBA wrote. ICBA cited the multitude of regulations that apply to the traditional payments products and services offered by the closely regulated banking system, such as requirements covering capital, consumer protections, due diligence, business resiliency, information security, third-party management, and more.
ICBA looks forward to continuing to work with policymakers to address community bank concerns with the Libra proposal.