The Office of the Comptroller of the Currency (OCC) announced last week it would move forward with special-purpose bank charters for fintech firms. One of the main criticisms shared by IBAT and other banking associations is that these charters would allow fintechs to evade the regulatory scrutiny community banks face and also that any new chartered institution should be subject to the same supervision and regulation required of community banks. The latter would require the OCC to procure explicit statutory authority from Congress before it issues fintech charters.
John W. Ryan, president and chief executive officer of the Conference of State Bank Supervisors, had the following to say about these new charters:
“Regarding the OCC’s move to create a new national charter for select, uninsured fintechs: An OCC fintech charter is a regulatory train wreck in the making. Such a move exceeds the current authority granted by Congress to the OCC. Fintech charter decisions would place the federal government in the business of picking winners and losers in the marketplace. And taxpayers would be exposed to a new risk: failed fintechs. On behalf of the citizens to whom we are accountable, state regulators are keeping all options open to stop this regulatory overreach.”