Magazine article American Banker

OCC Fintech Charter: A Solution to a Nonexistent Problem

Magazine article American Banker

OCC Fintech Charter: A Solution to a Nonexistent Problem

Article excerpt

Byline: Drew J. Breakspear

The Office of the Comptroller of the Currency's decision to offer special-purpose national charters to fintech companies is misguided and troubling on many levels. By choosing winners and losers in the financial marketplace, this one-size-fits-all approach to fintech chartering could ultimately prove detrimental to the growth of fintech businesses and those who benefit from innovation.

The OCC's framework would apply a uniform system of overseeing and chartering companies regardless of where they operate, but the federal agency's approach will not be the best fit for every state. Local and state regulators are most familiar with their respective financial services landscape, and a policy that works for one state may not work best for another.

The Florida Office of Financial Regulation has staff across the state who work tirelessly to ensure that we meet the needs of those we regulate and consumers. In Florida, our licensees and state-chartered institutions value their direct access to local regulators who know and can be responsive to the state's markets and economic trends.

But that understanding of community needs is lost when regulatory authority is channeled through a single federal regulator located far from the delivery of services.

Yet an even greater concern is that the OCC's special-purpose fintech charter will create an unfair marketplace. The federal criteria for obtaining a charter will favor large fintech firms over small businesses, which are the engines of employment growth and the development of new products and ideas. …

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