OCC to Grant Federal Charters to Fintech Firms

The OCC “will move forward” with plans to provide special-purpose national bank charters to financial technology firms, Comptroller of the Currency Thomas Curry has announced. The move would help level the playing field for fintech firms that compete with banks by providing a consistent regulatory framework and promote consumer protection, Curry said.

ABA welcomed the news. ABA President and CEO Rob Nichols said,

We are strongly encouraged by the OCC’s comments on a potential special purpose charter for fintech companies. This is a bank charter for fintech companies that will hold them to the same standards of safety, access and fair treatment. Maintaining high-standards is the best way to ensure customers have access to the best financial products and services.

During a Q&A session following his remarks, Curry acknowledged the wide variation in fintech companies’ business models, products and goals and added that the “diversity of approach in the fintech area” will be “the hardest evaluative aspect of the chartering process.” He emphasized that the OCC will take a tailored approach when determining whether or not to grant charters and setting capital requirements for fintech firms. Curry added that the OCC is also seeking input on how firms could be resolved in the event of failure, and that “there needs to be as part of the calculation a buffer that either reduces the risk of failure or allows for a ‘soft landing’ of that business, either through the regulatory process or through our receivership authorities under existing law.”

Curry also addressed another common concern: how to ensure that non-deposit-taking fintech companies would meet community financial needs, since the Community Reinvestment Act only applies to FDIC-insured institutions. “The OCC has the unique ability to impose requirements in some or all of these areas through the chartering process to require companies seeking national charters to support financial inclusion in meaningful ways, as appropriate for the business model and activity of a particular company,” Curry said.

Read the speech.