The Department of Justice (DOJ) is ramping up its anti-trust efforts, creating new challenges for large fintechs entering traditional bank spaces.

The DOJ has recently brought forth several criminal cases challenging wage fixing and “no poach” talent agreements between large companies. While these cases were not fintech-specific, growing non-bank financial institutions will likely face similar scenarios, Gail Levine, partner at law firm Mayer Brown, said on Wednesday during the firm’s ‘Fintech and Anti-Trust: What You Need to Know’ webinar.

“Wage fixing and no-poach agreements are deemed per se illegal by the Justice Department, unless it’s some necessary part of a larger, legitimate collaboration,” Levine said. “And this comes up a lot in spaces where talent is scarce and valuable, and that may well describe the challenge in the fintech space.”

While the DOJ has lost a number of such cases, the lesson for fintechs is clear; use sound talent management strategies or risk legal trouble and “considerable” personal and corporate distraction, Levine told Bank Automation News.

“DOJ’s Jonathan Kanter has said that the agency isn’t backing down, and it’s going to continue to bring these cases,” Levine told BAN. “In this environment, fintech firms are smart to aim to attract and retain their talent by being the best places to work — and they should think hard before sharing information with the competition about how they win over their employees.”

Other regulatory bodies have officially entered the fintech fray. On Monday, the Consumer Financial Protection Bureau (CFPB) announced that it would utilize an obscure Dodd Frank-era rule to supervise the activities of large fintechs and ensure equal footing between fintechs and banks.

During the webinar, Levine also noted bank mergers as an area of interest, pointing to a 2021 announcement from the DOJ’s anti-trust division that stated it would consider revising its methodology for reviewing bank mergers. The DOJ is now “asking questions” in the following areas:

• Does the DOJ currently stop harmful mergers, and does it review a full range of competitive factors when reviewing bank mergers?;
• Should merger standards differ between banks and non-banks?; and
• How should internet-only banks be treated?

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