Digital Currency Perspectives
July 20, 2017

OCC Fintech Charter in Trump Administration Cards

If you are wondering about the prospects of the OCC Fintech national bank charter under the Trump Administration, we got a sign yesterday.  In his remarks to the Exchequer Club in Washington, D.C., President Trump’s Acting Comptroller of the Currency, Keith Noreika, came strong to the mic, roundly stating the charter is a “good idea” and flatly saying “yes”, the OCC has the authority to grant the Fintech charter in the face of legal challenges by the New York Department of Financial Services and the Conference of State Bank Supervisors.

Here are three other takeaways from the Acting Comptroller’s remarks:

  1. The Fintech charter promotes the dual banking system. The bedrock of banking in the U.S. is our dual banking system, that is separate but competing state and federal charters to choose from.  This competition is believed by many to create a healthy dynamic among regulators, resulting in a wider range of products and services available to consumers, lower regulatory costs, and more effective supervision.  In his remarks, the Acting Comptroller stresses that our banking needs are best served by a  vibrant dual banking system:  “Providing a path for [Fintech] companies to become national banks is pro-growth and in some ways can reduce regulatory burden for those companies. National charters should be one choice that companies interested in banking should have. That option exists alongside other choices that include becoming a state bank or operating as a state-licensed financial service provider, or pursuing some partnership or business combination with existing banks.”
  2. The OCC is having informal meetings with interested Fintech companies. Although the OCC is not currently accepting applications for the Fintech charter, the Acting Comptroller reveals that his agency is meeting with Fintech companies, stating: “And, to be clear, we have not received, nor are we evaluating, any such applications from nondepository fintech companies. The OCC will continue to hold discussions with interested companies while we evaluate our options. These meetings have been very informative and provide insight into the financial landscape and the companies providing traditional banking services as they continue to evolve.”
  3. Existing OCC bank charters may be an option now. The Acting Comptroller reminds that the OCC’s existing charters may be an option for Fintech companies, saying: “Of course, companies can continue to seek a national bank charter using other authority that the OCC has to charter full-service national banks and federal saving associations, as well as other long-established special purpose national banks, such as trust banks, banker’s banks, and other so-called CEBA credit card banks. There is no dispute the OCC has the authority to charter these entities. In fact, the states in their current lawsuits concede as much in their arguments. Accordingly, we may well take them up on their invitation to use these authorities in the fintech-chartering context.  Many fintech business models may fit well into these long-established categories of special purpose national bank charters that do not rely on the contested provision of [the OCC’s rules].”

Read the Acting Comptroller’s full remarks here: