Washington DC – A New FinTech Hub


The FinTech ecosystem is always debating the merits of NY versus SF. Today, we have a new contender to add to the mix: DC.

As many of you know I started my career in government, and I’m passionate about public service. When people ask me why I left my role in government to work in FinTech, my answer is that I’m hugely passionate about financial health. Money is power, and the fact that 27% of the American population is unbanked or underbanked astounds me.

As I dive into my journey in financial inclusion, I stopped by to talk to Jotaka Eaddy, the Vice President of Policy, Strategic Engagement, and Impact for LendUp.

Here are some of the insights she shared:

Having previously worked on criminal justice reform, how did you end up in FinTech and what are you working on in your role at LendUp?

I started my advocacy work at age 16, and eventually served as the senior advisor to the President of the NAACP. Economic empowerment is a tenet of seeking true civil liberties for all people, and FinTech can lead us there.

For my current role, I spend about ⅓ of my time in DC, and the rest in SF, leading engagement and development around policy positions for LendUp. On the day to day, this means I’m working to engage with advocates, elected officials, and regulators. I’m spreading the word about who we are and the impact we are driving. What is special about LendUp is our commitment to social impact. We’re a mission-driven financial technology company, striving to create a pathway for anyone in this country who wants better financial health. We offer the first socially-responsible credit cards — the L Card and the Arrow Card, as well as loans that give borrowers the opportunity to decrease their fees over time.

We’re driving a national conversation about financial inclusion, and our team is focused on social impact, measuring and improving the financial health of our customers.

What is LendUp looking to achieve with its presence in DC?

We’re figuring out, how do we learn and drive impact? How do we formulate policy that helps drive impact for our customers? We want to communicate those messages with policy makers and influencers. It’s important to note, those policy makers and influencers are not just in Washington, they are around the country. Elected officials are at state capitals across the nation, and they have a growing interest in how financial technology can be a driver of financial inclusion for their constituents.

How has the FinTech landscape in DC grown/changed in the last 5 years?

There is lots of interest in FinTech. I have been engaged in FinTech for 4 years, and over that time, I’ve seen a real increase in interest. There is now a deeper understanding of FinTech, and I’m seeing a deeper desire to understand financial technology, and how regulations can change to help bridge gaps that FinTechs can solve for. In last 3-4 years, we’ve seen the CFPB’s Project Catalyst Initiative, and the OCC opened an Office of Innovation. The FCC has always  delved into tech, but they are now more focused on in FinTech specifically. On the congressional level there is lots of interest. Some members are very vocal around financial tech, and they have hope that FinTech can fill gaps that have been created by the banking system. At the federal level, Congressman Emanuel Cleaver, Congressman Gregory Meeks, Congressman Patrick McHenry, are a few individuals engaging with FinTech. There is also a similar level of interest at the state level. Arizona and the debut of their Regulatory Sandbox is a perfect example of state level legislators taking initiative.

Who are some key players/departments in the government thinking about innovation and what are they working on?

LendUp, of course, is on the ground. The White House still does focus on innovation. During the Obama administration, there was a keen interest in tech overall. As a result, there was also a focus on FinTech, and there are still some conversations happening with this administration. The Department of Treasury comments and pursues conversations around financial technology. Trade associations like the ETA, CFSI, and FinNow, among others, are very active, and even companies like PayPal, which is a LendUp investor. There are more and more FinTechs advocating on the hill.

There has been a lot of discussion about governments around the world adopting tech and working with startups to provide better services to their people. The EU working with lending startups to provide SMEs with business loans is a great example. Have you seen the US government thinking about embracing innovation in its daily work?

We’re still in early stages, but we’re a lot closer than 4 years ago. Like I said before, we’re starting to see a deeper understanding of FinTech in the government. Recently, we’ve seen a network of state regulators discussing how we can have more coordination amongst state regulators. We’ve seen the OCC Fintech Charter. There are a lot more conversations happening about FinTech for social good. Over the next 2-3 years, we’ll see more movement. The policy level is not as fast moving as Silicon Valley, or the tech landscape. There is a lot at stake, and there is a healthy balance between moving swiftly and slowing the conversation down for due process.

How can startups get involved in the push for government adoption of innovative technology and policies?

To start, find like-minded startups with the same objectives, with a similar business model. Working in coalitions is important, and it’s effective. There is so much info, and so many conversations. So much state legislation is coming out about financial technology. It can be overwhelming, but start by finding a coalition or a trade group. That’s good best practice for a starting point. Think about: which piece of the larger strategy should you start with? Start really small, and focus on building relationships with people who want to learn or engage more. You can even start with a goal to visit DC twice a year, and engage 2-5 members of Congress. Better yet, visit states where your business has a large footprint and talk to their elected officials.

Any last thoughts?

There is an incredible amount of opportunity in FinTech for financial inclusion. It’s not monolithic. Various FinTechs are focused on various verticals of the industry, but there are just not as many focused on the 56% of Americans who have been shut out of traditional banking. There is a great opportunity to service a community that has been pushed to the margins. We see more companies focusing on financial inclusion and financial health, and it’s a trend that I hope to see grow, since there is a great amount of opportunity. I got into this line of work when it became clear to me that technology and innovation can be a true driver for change. We can bring dignity back to financial services. That’s what we’re doing at LendUp.

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