OCC Charter Moves Forward, Questions Remain

Last week, the Office of the Comptroller of the Currency (OCC) announced it would begin accepting applications from fintech companies for a special purpose national bank charter.

Since the agency proposed the charter in 2016, reaction to the idea from the fintech community was cautiously positive. As PaymentFacilitator reported at the time, whether a fintech company wanted to apply for the charter or not would be a very individual process.

But in general, some fintech-focused organizations expressed their support for a regulatory framework that would protect consumers while supporting innovation.

As a recent article in Bloomberg Law noted, the idea of a single regulator is appealing to those businesses who otherwise have to navigate individual state licensing schemes.

Indeed, PaymentFacilitator reported in 2016 that businesses required to be licensed as money transmitters were one audience for whom a federal charter might be appealing. While still being subject to state laws, those businesses would report to a single regulator, streamlining their regulatory compliance efforts.

For its part, the Conference of State Bank Supervisors (CSBS) issued a statement last week calling the OCC charter a “regulatory train wreck in the making,” saying that the move exceeds the agency’s authority. The CSBS had previously filed a complaint against the agency.

And as is the case with any new implementation, details remain to be worked out.

For example, Bloomberg Law also reported that the Federal Reserve has not yet made it known whether non-bank companies would be allowed to be part of its payments system, which offers lower transaction fees.