OCC Inching Toward FinTech Charters

Apr 10, 2018 | News

Comptroller of the Currency Joseph Otting spoke earlier this week on recent developments in his office’s proposal to offer special purpose bank charters to FinTech companies. The Office of the Comptroller of the Currency (OCC) is now estimating that it will publish its position on the charter system in the next few months.


Demand amongst financial technology companies for federal bank charters has been present for some months now, with a few FinTechs even seeking traditional bank charters in the interim. Otting’s predecessor, Keith Noreika, noted last fall that the charter system was still in an “exploratory phase.”


The lack of finality with the proposal at the OCC did not stop state banking officials from challenging the special purpose charter system. Following the release of a draft licensing manual for national FinTech charters last year, New York and the Conference of State Bank Supervisors (CSBS) each filed suit to block implementation of the special purpose bank charter system intended to bring FinTech companies away from state rule and under federal supervision. CSBS even developed its own alternative to the OCC’s proposal, dubbed Vision 2020.


A federal judge would ultimately throw out New York’s lawsuit finding that since the OCC had yet to determine whether or not it would issue the charters, no alleged injury had taken place on the part of New York. The suit was therefore speculative, and the state lacked the standing requisite to continue.


Aside from discussion about the FinTech charter proposal, Comptroller Otting spoke about the Senate’s recent bipartisan bill to reform the Dodd-Frank Act. While he did not outright endorse the bill, Otting did encourage the two houses of Congress to work together during a “monumental change in our ability to influence regulation.”


The two chambers are currently divided over the degree to which the Dodd-Frank Act should be amended. House Financial Services Committee Chairman Jeb Hensarling (R- TX) informed Senate leadership recently that the House would not entertain the bill unless it unwound banking and securities regulations even more.  

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