Academic journal article ABA Banking Journal

OCC Greenlights Federal Fintech Charter

Academic journal article ABA Banking Journal

OCC Greenlights Federal Fintech Charter

Article excerpt

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

ABA welcomed the news with conditional support. "We are strongly encouraged by the OCC's comments on a potential special purpose charter for fintech companies," said ABA President and CEO Rob Nichols. "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."

Accompanying the announcement was an OCC white paper on its authority, principles and process for chartering special-purpose national banks, which it already does for uninsured trust banks and special-purpose credit card banks. Under the National Bank Act, the OCC may issue charters for any company involved in making loans, processing payments or receiving deposits.

Acknowledging a wide variation in fintech companies' business models, products and goals, Curry said 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. …

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