OCC Chief Pushes Back on Criticisms of Fintech Charter Plan

Comptroller of the Currency Thomas Curry on Monday took aim at arguments against offering national charters to financial technology firms.

The Office of the Comptroller of the Currency has the authority to provide charters to fintech firms, despite some stakeholders who say doing so falls outside of the regulator’s purview, Curry said in prepared remarks for the LendIt USA 2017 conference in New York.

“To be clear, the National Bank Act does give the OCC the legal authority to grant national bank charters to companies engaged in the business of banking,” he said, adding that such companies don’t need to take deposits to qualify for a charter. “It is not circumscribed just because a company delivers banking services in new ways with innovative technology.”

The agency introduced a plan in December to offer charters to fintech firms on a voluntary basis. Industry groups such as the American Bankers Association responded by emphasizing the need for consistent regulation of traditional banks and chartered fintech firms. Those trade groups asked for more specific details on the OCC’s stipulations for chartered firms.

Progressive groups such as the Center for Responsible Lending decried potential gaps in regulatory rigor, while state regulators such as the Conference of State Bank Supervisors criticized the OCC for what they saw as overreaching its authority.

The OCC is working to publish a supplemental document to clarify how the regulator will evaluate fintech companies that apply for charters, Curry said. He noted that the agency has received more than 100 comments on its December white paper outlining the plan.

Curry also disputed the notion that the OCC’s plan muddles banking and commerce — two entities required to be walled off from one another under the regulator.

“Proposals that would mix banking and commerce are inconsistent with the OCC’s chartering standards and would not be approved,” he said. “I don’t say these things to scare off companies that may be thinking about a national charter. Instead, it is precisely these high standards and the rigorous, value-added supervision by the OCC that makes becoming a national bank attractive for those who meet these expectations.”