OCC Begins Accepting FinTech National Bank Charter Applications

Home » FinTech » FinTech News » OCC Begins Accepting FinTech National Bank Charter Applications

OCC Begins Accepting FinTech National Bank Charter Applications

At long last, the Office of the Comptroller of the Currency has announced that they’re accepting national bank charter applications from FinTechs. The move comes after the U.S. Department of the Treasury released a report titled “A Financial System That Creates Economic Opportunities: Nonbank Financials, FinTech, and Innovation” that offered recommendations intended to “modernize regulations for an array of financial products and activities.” As expected these charters will be dubbed Special Purpose National Banks, with the OCC explaining that “FinTech companies that apply and qualify for, and receive, special purpose national bank charters will be supervised like similarly situated national banks, to include capital, liquidity, and financial inclusion commitments as appropriate.”

Announcing the acceptance of FinTech charter applications, Comptroller of the Currency Joseph Otting said in a statement, “The decision to consider applications for special purpose national bank charters from innovative companies helps provide more choices to consumers and businesses, and creates greater opportunity for companies that want to provide banking services in America. Companies that provide banking services in innovative ways deserve the opportunity to pursue that business on a national scale as a federally chartered, regulated bank.” Similarly, in the Treasury Department’s report, Secretary Steven Mnuchin wrote, “American innovation is a cornerstone of a healthy U.S. economy. Creating a regulatory environment that supports responsible innovation is crucial for economic growth and success, particularly in the financial sector. America is a leader in innovation. We must keep pace with industry changes and encourage financial ingenuity to foster the nation’s vibrant financial services and technology sectors.”

As Forbes reports, reaction to the OCC’s announcement has been mixed. While most seem to agree that the development is a positive one, there are still concerns that the decision doesn’t do enough to fix the FinTech regulatory system.  Additionally some legislators have taken issue with this federal mandate overriding previous state regulatory policies. Among them is New York DFS superintendent Maria Vullo, who said in a statement that the new charter “is clearly not authorized under the National Bank Act…[and] will impose an entirely unjustified federal regulatory scheme on an already fully functional and deeply rooted state regulatory landscape.”

It’s been more than a year and a half since the OCC first unveiled plans to offer FinTechs Special Purpose National Bank charters, with the delay leading some to wonder if the idea would actually come to fruition. Now that the big day has finally arrived it’s still not clear what impact the new regulatory rules will have on the sector. Additionally, with the announcement just over a week old, we have yet to know which FinTechs might apply for the new charter and which will continue under their current schemes. In any case, there’s clearly a growing focus on FinTech for better or worse.

Comments

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Author

Jonathan Dyer

I'm a small town guy living in Los Angeles looking to make solid financial decisions. I write for a number of finance websites, including HuffingtonPost and Business2Community. I founded DyerNews.com in 2015 to focus on personal finance and the emerging FinTech markets.

Other Articles by Jonathan Dyer

SIM Swapping Hack Proves Latest Threat in Cryptocurrency Theft

For all the excitement and possibilities that come with cryptocurrencies, there's also been a fair number of frustrations. Looking past the price volatility that's sunk many investors' accounts, hacking has also proven to be a problem for crypto holders. Adding to the issue, there's little recourse hacking victims can take...

One-Third of Small Businesses Worried About U.S. Trade Policy

While optimism among small business owners may be high, that doesn't mean that there aren't causes for concern. Take, for example, the United States' trade policy that has resulted in several tariffs being enacted against imports from numerous nations and, in turn, tariffs imposed on outbound U.S. goods. Now the latest...

Zelle Reportedly Looking to Expand into Business Payments

In a relatively short period of time, Zelle has grown into the most-used peer to peer (P2P) payments app, topping competitors like Venmo, Square's Cash App, and App Pay Cash. Now it seems the big bank-backed app is looking to expand its reach even further. According to a report by...