Net Net: Promoting innovation and managing change
Net Net: Promoting innovation and managing change

Sheila Bair goes the fintech route

Sheila Bair
Peter Foley | Bloomberg | Getty Images

Sheila Bair, who for five years led the FDIC, is taking on a new role: She is joining online lender Avant's board of directors.

"It's been a long-term interest of mine," Bair said. "I like the transparency, and Avant doesn't charge origination fees."

Bair has held a number of roles in government and regulatory bodies responsible for overseeing the banking industry. She was assistant secretary for financial institutions in the Treasury Department, and commissioner and acting chair of the Commodity Futures Trading Commission.

From 2006 to 2011, Bair led the FDIC under Presidents Barack Obama and George W. Bush, playing a crucial role in providing credit support to banks in the U.S. financial system as they were challenged in an unprecedented liquidity crisis.

Start-ups are bolstering their ranks with government veterans as regulators are actively looking to change the way the industry does business. On Thursday, the Treasury Department's Office of the Comptroller of the Currency revealed plans to change regulations that apply to financial technology and the banking industry.

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As fintech companies ramp up funding to compete with major Wall Street institutions and mature in their development, a number of Beltway veterans have been called upon by start-ups to serve in senior roles.

In 2015, lender SoFi added Arthur Levitt to its ranks as an advisor. He is a former Securities and Exchange Commission chairman who led the SEC during former President Bill Clinton's administration. Levitt also serves in advisory roles at Motif Investing, a start-up for traders, and PeerIQ, which provides risk management services for peer-to-peer lenders.

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Raj Date, a former Consumer Financial Protection Bureau official, is a director with peer-to-peer payments company Circle, according to the firm's website, and like Levitt is a director with PeerIQ.

And Lawrence Summers, former Clinton treasury secretary, is on payments company Square's board. Summers is also on Lending Club's board, according to the company's website, along with Michael Barr, who has held various positions in government including his role as Treasury Department assistant secretary for financial institutions.

"I see a future where banks and fintech companies work together, particularly in finding a way to get responsible pricing to the consumer," Bair said.

Correction: The story was updated to fix Bair's quote. She said "I like the transparency, and Avant doesn't charge origination fees."