Plans by the Office of the Comptroller of the Currency to consider national bank charters for fintech companies are moving forward, despite concerns by state regulators and lawmakers.
The OCC provided additional details this week about its plans in a draft supplement to the agency’s existing Licensing Manual. The supplement outlines how the agency would apply the licensing standards and requirements in existing regulations and policies to fintech companies applying for special purpose national bank charters, according to an OCC news release. Comments on the proposed draft document will be accepted through April 14.
In December, Comptroller of the Currency Thomas J. Curry announced the OCC would consider applications from fintech companies to become special purpose national banks.
“It is clear that fintech companies hold great potential to expand financial inclusion, empower consumers, and help families and businesses take more control of their financial matters,” Curry said during remarks at the time at George Washington University Law Center in Washington, D.C.
The OCC’s draft supplement describes unique factors it will consider in evaluating applications from fintech companies; expectations for promoting fair access and treatment and financial inclusion; and the agency’s approach to supervising those fintech companies that become national banks, according to the OCC release.
The OCC received more than 100 comments after it announced its plans in December. The agency considered those comments in developing the draft supplement, which builds on nearly two years of work by the OCC on responsible innovation, the release stated.
The plans are not meeting with universal support, however.
John W. Ryan, president and CEO of the Conference of State Banking Supervisors, said in a March 15 statement the OCC plan sets a “dangerous precedent,” and creates new risks for consumers and taxpayers. The CSBS submitted a detailed comment letter to the OCC in January, outlining numerous concerns regarding a federal fintech charter.
“The new OCC charter preempts existing state consumer protections without a comparable mechanism to replace them,” Ryan said in the statement. “It also exposes taxpayers to the risk of inevitable fintech failures. This is a dangerous combination.
“It is deeply unsettling that the OCC chose to ignore the public record — including letters from Republicans and Democrats in Congress — warning of the harm this action will cause to consumers and the added risks to taxpayers,” Ryan added in the release.
Meanwhile, 34 Republican members of the U.S. House signed a March 10 letter to Curry expressed their concern about the need for more public feedback on the issue and argued that any decision should be delayed until after Curry’s term ends in April.
“In light of the importance and complexity of this issue, the OCC should not rush this decision,” the letter stated. “The OCC should provide a full and fair opportunity for stakeholders to see the details of the special charter, solicit feedback and allow the incoming Comptroller the opportunity to assess the special purpose charter.”
To read related article about the OCC’s plans for a fintech charter, click here.