Banking and Finance Law Daily Wrap Up, FINANCIAL TECHNOLOGY—Are policymakers favoring large banks, crypto and fintech firms?, (May 29, 2026)

By Colleen M Svelnis, J.D.

Better Markets asserts that recent actions by federal banking agencies and lawmakers disproportionately favor large banks, crypto firms, and fintech companies while offering minimal benefits to community banks.

A Better Markets Fact Sheet authored by Phillp Basil, Better Markets’ Director of Economic Growth and Financial Stability, asserts that U.S. banking policymakers are disproportionately favoring large banks, crypto firms, and fintech companies while offering only limited benefits to community banks. The advocacy group states that policymakers are effectively “giving cake to big banks and crypto and leaving the crumbs for community banks and Main Street,” despite public claims of support for smaller institutions.

Better Markets argues that recent actions by federal banking agencies and lawmakers disproportionately favor large banks, crypto firms, and fintech companies while offering minimal benefits to community banks. The group contends that policy changes described as supportive of community institutions are minimal, such as a modest reduction in the community bank leverage ratio, while more significant changes—such as substantially lower capital requirements for global systemically important banks—provide benefits to larger competitors.

According to the report, this imbalance has contributed to widening profitability and market share gaps. The four largest banks reported significantly higher returns on equity than community banks, and their combined profits far exceeded those of more than 4,000 community institutions.

The group states that community banks play a critical role in supporting the real economy, using a larger share of deposits for lending and approving a higher percentage of small business loans. However, current regulatory and policy frameworks—across capital requirements, supervision, deposits, and new bank formation—are described as structurally disadvantaging these institutions while enhancing the competitiveness and growth of larger and nontraditional financial firms.

Better Markets calls on policymakers to rebalance the regulatory framework to provide meaningful support to community banks and strengthen their role in the Main Street economy.

Companies: Better Markets

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