Testimony of Nakita Q. Cuttino Visiting Assistant Professor of Law, Duke University School of Law Before The United States Senate Committee on Banking, Housing and Urban Affairs

Abstract

This document is the written testimony of Nakita Q. Cuttino for the June 30, 2020, hearing Digitization of Money and Payments by the U.S. Senate Committee on Banking, Housing and Urban Affairs. This testimony examines the existing and potential consumer risks posed by time and access frictions in the U.S. payments system. Specifically, these frictions have long been exploited in the marketplace by service providers like payday lenders and check cashers with deleterious effects on millions of Americans. Emerging financial technology, or fintech, services like early wage access programs demonstrate that these frictions will continue to be exploited in a digital economy. Accordingly, there is an urgent need to resolve these time and access frictions to improve consumer welfare. The testimony explains why a public banking option with existing payments infrastructure will most effectively serve the aims of financial inclusion in the immediate future.