It’s August and it’s hot in Washington DC.  Yet in the nation’s capital, fintech policy may actually be hotter than the temperatures outside.  Much of the latest buzz has come from the recently released Treasury report which focuses largely on the Trump administration’s outlook for financial innovation. This document is the fourth in a series of reports in response to Executive Order 13772 that details the President’s core principles for financial regulation. The 222 page report contains more than 80 recommendations. The issues that grabbed the headlines included recommendations urging the OCC to move forward with a special purpose bank charter for fintechs (it must have worked  since the OCC made a major announcement just a few hours after the report was released), encouraging U.S. regulators to develop a system similar to a regulatory sandbox, establishing a national data security and breach notification standard and calling for the rescission of the Bureau of Consumer Financial Protection (BCFP) payday/small dollar lending rule. Below, I highlight a few items in the report that may have gone under the radar. These emerging areas offer significant promise for both consumers and market participants alike and can be accelerated by a balanced and thoughtful policy approach. Fintech Policy in the US: New Credit Models and the Promise of Alternative Data The report devotes a section to the promise of new scoring models designed to leverage alternative data sources in credit decisions.  Alternative data in this context is frequently defined as information that currently resides outside of the credit bureau files.  Treasury discusses the opportunities that alternative data presents in expanding access to credit, especially for thin file and credit invisible consumers. The report also highlights FICO’s recent innovation in bringing an alternative data score to market that utilizes telecom and utility payments as well as select public records data not found widely in credit bureau files today. The score provides new credit insights for those who currently cannot be scored without this additional information. The results have been impressive and for the latest findings see a recent announcement regarding our work in this area. Quick Take:  The report was on the mark in encouraging regulators to help facilitate the development of new solutions utilizing alternative data. Treasury is also correct to emphasize the need that any new innovations ensure data accuracy and comply with existing consumer protection laws and regulations including the Fair Credit Reporting Act, Equal Credit Opportunity Act, the Federal Trade Commission Act as well as compliance with model validation and management guidelines. Fintech Policy in the US: Data Aggregation and Consumer Financial Account Data In the fintech world, consumer access to financial account data has attracted great interest. The report provides a short primer on how digitization has sparked new opportunities for fintech firms involved in data aggregation. The report also discusses the challenges with screen-scraping and the importance of improving API methods to address issues such as standardizing data elements and liability concerns linked to data breaches. Yet despite some remaining challenges, Treasury remains very pro-consumer access. It recognizes the BCFP’s prior efforts to promote consumer access to financial account information and encourages the Bureau to provide further clarity to ensure that “third parties properly authorized by consumers, including data aggregators and consumer fintech application providers” are able to obtain financial account information. FICO couldn’t agree more. In fact, we are already working with our partners on the development of a new score that would facilitate the inclusion of consumer-permissioned checking, savings and money market account information to provide additional insights on credit applicants that might not otherwise be approved. Many more d