In a statement released on July 31, The Office of the Comptroller of the Currency (OCC) announced its decision to begin accepting applications for special-purpose national bank charters from financial technology companies that don’t take deposits. While state banking regulators have argued that such charters are outside of the agency's authority, the OCC's announcement ended nearly two years of uncertainty due to leadership changes and legal challenges. On the same day, The Treasury Department also issued a full endorsement of a nationwide bank charter for fintechs, calling these “regulatory sandboxes” important for fostering innovation.
In an article published by Bloomberg Law, RK&O partner Vincent Basulto discussed how these changes could impact the federal banking system, as well as factors that would lead a fintech to consider an OCC charter. “A significant motivation of any online lender in deciding to pursue a special purpose charter is going to be the reduced compliance costs associated with having a single primary regulator,” he said. "The overall regulatory benefits of a single regulator would likely still be enough for the charter to be worth considering, even if the Fed were to decide that fintech charter holders wouldn’t gain access to the payment system."
Click here to read "Fintechs Eyeing OCC Charter Seek Clarity on Fed Payments System" - Bloomberg Law (subscription required)