Brown, Merkley Warn Against OCC Fintech Charter

Sen. Sherrod Brown of Ohio, the top Democrat on the Senate Banking Committee, and former panel member Sen. Jeff Merkley on Monday said the Office of the Comptroller of the Currency should not offer charters to financial technology firms.

The senators warned in a letter to Comptroller Thomas Curry that OCC charters for fintech firms could undermine financial stability and jeopardize consumer protections. The OCC last month said it would offer charters to fintech firms that lend money, receive deposits or pay checks.

“While the OCC’s leadership on these issues is indispensable, we believe that the OCC’s plan to offer alternative charters to nonbank and fintech firms as explained could upset the current financial regulatory structure,” the lawmakers wrote. “We would urge the OCC to refrain from offering any alternative or special purpose charters.”

The senators said the OCC’s plan would encourage firms to engage in “charter shopping” to skirt state and federal laws. State regulators have also pushed back against OCC fintech charters, saying they will give advantages to more established companies.

Brown and Merkley (D-Ore.) disputed a key argument of fintech advocates. While the industry says charters would streamline the regulatory pipeline, which in turn will help consumers who struggle to access traditional banking services, the senators say the OCC proposal would allow firms to offer limited services that don’t benefit “underbanked” consumers.

“It is unclear to us how the OCC’s proposal, which would normalize the delivery of à la carte services by non-depository firms, aligns with the goal of providing the underbanked with access to a full range of ‘safe, secure, and affordable banking services,'” the senators wrote in their letter.

They also questioned the OCC’s authority to charter firms that don’t accept deposits, and they cautioned that large firms could take unfair advantage of alternative charters.

“Nothing would ensure that both bank and currently impermissible non-bank activities were intermingled in one company, and that a commercial entity could not create or acquire an alternatively chartered company,” the lawmakers wrote.


Finance Brief: Icahn Resigns as Special Adviser to Trump

Billionaire investor Carl Icahn resigned from his role as President Donald Trump’s unpaid adviser on regulatory reform issues just before The New Yorker published a profile that detailed potential conflicts of interests related to Icahn’s stake in a Texas-based petroleum refining company. Icahn cited “partisan bickering” in his resignation letter and denied he had profited from his advisory position.

Finance Brief: Week in Review & What’s Ahead

Members of President Donald Trump’s Strategic and Policy Forum, an advisory group of business leaders, decided to disband after Trump blamed the violence in Charlottesville, Va., on both white nationalists and the protesters who opposed them. Later, Trump announced the dissolution of that group and of an advisory panel on manufacturing. JPMorgan Chase & Co. Chief Executive Jamie Dimon, a Strategic and Policy Forum member, said in a memo to employees that he “strongly” disagreed with Trump’s comments.

Finance Brief: Week in Review & What’s Ahead

California Insurance Commissioner Dave Jones said the state will investigate whether or not Wells Fargo harmed hundreds of thousands of customers by selling them car insurance they didn’t need. The probe follows subpoenas issued by New York state’s banking and insurance regulator to two Wells Fargo units last week.

Finance Brief: Labor Department Seeks 18-Month Delay on Fiduciary Rule

The Labor Department said in a court filing that it was seeking an 18-month delay on the fiduciary rule, which requires financial advisers to act in retirement savers’ best interests. The agency filed the document as part of a lawsuit in the U.S. District Court for the District of Minnesota, in which it said that it was proposing to push the compliance date to July 1, 2019, and loosening some of the rule’s restrictions.

Load More