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Monday, April 4, 2016

ABA Welcomes OCC’s Principles for ‘Responsible Innovation’

The ABA applauded the OCC for its white paper outlining principles for how the agency will support innovation in the financial system. The principles are organized around what the agency calls “responsible innovation” that provides flexibility for banks and nonbanks to serve customers better while maintaining sound risk management and consumer protection standards.

The principles focus on providing dedicated agency resources to support inquiries from financial providers about innovative activities. To do this, the agency would need to foster an internal culture receptive to innovation and leverage in-house expertise, while also seeking feedback from outside stakeholders and collaborating with other regulators.

Comptroller of the Currency, Thomas Curry highlighted benefits of banks allying with nonbank fintech firms to offer new products, noting that these partnerships can combine banks’ customer relationships, deposit bases and cybersecurity protections with new sources of innovative technology. However, Curry cautioned that all participants in these partnerships would need to manage risks appropriately and comply with consumer protection rules.

The OCC sought feedback on several areas related to its supervision of financial innovation. Comments on the white paper are due by May 31. The OCC will also host a Washington, D.C., forum on responsible innovation on June 23.

Read more.
View the white paper.

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