Director Cornelius K. Hurley
Interview with Director of the Online Lending Policy Institute
Hurley is Professor of the Practice of Banking Law at Boston University, and the founding Director of the University’s Center for Finance, Law & Policy. Professor Hurley currently serves on the boards of directors of the Federal Home Loan Bank of Boston, and Computershare Trust Company, N.A., an integral part of one of the world’s leading transfer agents. Through the Center, Professor Hurley produced nonpartisan policy recommendations, mobilized vigorous panels of industry experts, and oversaw the overall mission of the Center. For example, he brought in Barney Frank and Chris Dodd to discuss the Dodd-Frank Wall Street Reform and Consumer Protection Act, and established the Center as a key player in financial services policy initiatives.
Prior to his work at the Center he led Boston University’s LLM program in Banking and Financial Law. Hurley was general counsel of a major bank holding company and assistant general counsel at the Federal Reserve Board in Washington, DC. He holds a Juris Doctor degree from Georgetown University, graduated from the program for management development at Harvard Business School, and he earned his undergraduate degree from The College of the Holy Cross.
To help those interested in OLPI get to know Director Hurley, OLPI’s staff sat down with him and asked him about his background and about his vision for OLPI.
What brought you to lead OLPI?
About a year ago, one of my former students who works for a major marketplace lender asked whether our Center would be interested in co-sponsoring a conference in Washington focused on marketplace lending. I had been following developments in the Fintech arena and the Center was considering at the time making Fintech one of its major topics of research. It was a natural fit and the timing was perfect so I agreed that Boston University would co-host the First Annual Marketplace Lending Policy Summit. Held last September, the Summit was a huge success.
In the process of planning and running the Summit I came to know the management team at Cross River Bank and many of the players at RocketLoans and many others in this dynamic field. That working relationship developed into my being asked to head up OLPI. My professional career has been equal parts regulator, banker, and academic. The opportunity to leverage my experience working with people I respect enormously on a subject of extraordinary importance to our financial system and our economy was simply irresistible.
You have a strong history in banking and finance law, what is one of the greatest lessons you’ve learned about banking regulations?
“Regulation” is a loaded and a politically charged word. It has different connotations to Ds and Rs. I prefer not to use the word in isolation but whenever possible talk of “sound regulation.” No one wants too much or too little regulation but all can agree that we need sound regulation in many parts of our financial system. I prefer to have policy debates over what constitutes consider sound regulation over highly-charged arguments about regulation as an abstract concept. In a world that is already divided, the last thing we need is spurious argument over nonspecific concepts.
OLPI is entering fintech as a think tank, what can a think tank do in terms of actually driving change?
You have asked a question that goes to the heart of what OLPI is all about. To us, it’s not so much a “think tank” but as we prefer to call it, a “do tank.” Let me explain. In my eleven years at Boston University I came to know many academics that were very accomplished in turning out research that had theoretical value to them and their profession but that had very little relevance to or impact on the world in which we live. Others were more focused on research that could be applied in practical ways to improve the human condition. It is these latter academic talents that OLPI will be mobilizing in the months and years to come.
Others countries that seek to create a regulatory ecosphere that encourages innovation in fintech often reference a “regulatory sandbox” –what is a regulatory sandbox?
“Regulatory sandbox” refers to a proactive initiative by the government, usually by a regulator such as the UK’s Financial Conduct Authority, that promotes Fintech in its various manifestations. Promotion can take many forms from “safe harbors” from regulatory penalties to simply bringing Fintech start-ups together with legacy institutions. Other jurisdictions, i.e., UK, Australia, and Singapore, have stolen the march on this project. Among U.S. regulators, the OCC, regulator of national banks, has shown the most creativity with its newly established Office of Innovation and possibly a new fintech federal charter. As Business Insider recently recommended, “The U.S. would be wise to examine the policies in place across the pond and consider how to implement similar ones within its own borders.” OLPI stands ready to meet this challenge.
How will OLPI differ from the Center?
In a word the chief differentiator is “focus.” At the Center, we reached out to faculty and students from the various schools and colleges that make up the University. We took that talent pool as it was and attempted to leverage upon it for the whole range of issues facing finance and financial policy. OLPI, by way of contrast, focuses on Fintech and more particularly marketplace lending by drawing upon talent wherever it may be housed. If it happens to be BU that’s fine but more often than not it will be at other universities. When it comes to solving critical issues facing marketplace lending and Fintech you can count on OLPI being an “equal opportunity employer.”
How does OLPI differ from the Associations that have formed over the past couple of years?
There are two things that differentiate OLPI from some of the trade groups that have been formed recently. First, OLPI (pronounced “ol-py”) is open to all. We use the soft “o” as opposed to the hard “o” to signify that we are an open organization accessible to all: consumer groups, industry players, attorneys, investors as well as academics. We feel strongly that the collective voice of OLPI gives it more credibility. Second, we are not an advocacy shop per se. I am not a registered lobbyist and, at the end of the day, our core mission is not lobbying. That is not to say that from time to time OLPI will not take aggressive positions on issues of importance to the sector but that is not the activity around which we are organized.
Why is OLPI needed?
OLPI comes on the scene at a time when we on the cusp of many issues that will define finance for years to come. Obviously, we have a new administration in Washington that brings with it a high degree of skepticism about both regulation and sound regulation. The reforms triggered by the Financial Crisis are up for not only review but for possible repeal. Structural reform of the financial services industry, something neglected by the Dodd-Frank Act, will be on the table. Ditto for structural reform of the regulatory agencies. Global harmonization of regulatory regimes, once a guiding principle of the G 20, is now being called into question and could easily be replaced by the atomization of finance breaking down on national or regional lines. Fintech will play a role in each of these mega-trends. That role can be either productive in terms of inclusion and social advancement or destructive in terms of wealth distribution and regulatory arbitrage. A successful OLPI will help guide Fintech and marketplace lending in a positive direction.
Where is OLPI’s base of operations?
OLPI is organized as a not-for-profit institution in Washington, DC. We are represented there by the law firm of Steptoe & Johnson. To borrow a commonly used Fintech word, OLPI is a “distributed” institution. Out of the gate, it is not our goal to build a robust staff. Rather, we intend to seed robust research and oversee it efficiently on behalf of the members. In that sense, OLPI has not just one “base” of operations but many bases that reflect the profile of our membership and the locus of our research teams. To the extent that I as executive director of OLPI have a role in helping set the institute’s agenda, you could say that OLPI is based in Boston.