In this photo illustration, the Robinhood logo is displayed on an iPhone on December 17, 2020 in San Anselmo, California. | Photo illustration by Justin Sullivan/Getty ImagesDemocrats have long been conflicted over financial technology companies like online lenders, praising the flashy upstarts for their ability to help lower-income Americans build wealth yet wary of the risks they pose to unsuspecting consumers.
Those suspicions about fintech will be on full display this week when the House Financial Services Committee, led by Rep., summons Robinhood co-founder Vlad Tenev, other executives and hedge fund managers linked to the brokerage for a potentially explosive hearing. Among the witnesses scheduled to testify at the Feb. 18 session are GOP megadonor Ken Griffin, a hedge fund titan whose company, Citadel Securities, is a key source of revenue for Robinhood.
Michael Barr has faced pushback for his paid advisory roles at two prominent firms. He advised cryptocurrency trader Ripple between 2015 and 2017 on international payments matters and was a consultant for Lending Club on various projects, including on One example: small-dollar loans that consumers pay back in installments. “They’ve made it so much easier for people to use these services vs. dragging your 50-inch television down to a pawn shop,” said Mary Jackson, CEO of the Online Lenders Alliance. She said online lending has also increased racial equity by making relevant decisions “colorblind.”
“Investing and gamification are in some ways opposing concepts,” Rep. Jim Himes , a senior member of the House Financial Services Committee, said in an interview. “There aren’t a lot of people who make a lot of money investing, but those who do, do it in the long term. The idea you’re going to be a responsible investor by regularly trading via your device is just plain wrong, and a lot of people are going to get hurt by that idea.
“One of the general promises of fintech is that this innovation will lead to increased inclusion and more access to all sorts of communities that have been left out in the past,” a Senate Democratic aide said. “Enough time has passed that a lot of these guys would need to show some results for their claims.”
The ability to pump and dump doesn't democratize markets it just allows manipulators who already hold all the cards with boiler rooms and billions of dollars to make most of the money. Democracy isn't Libertarianism for a reason.