The Office of the Comptroller of the Currency (OCC) is now accepting applications for national bank charters from non-depository FinTech firms.
The OCC said its decision is ‘consistent with bi-partisan government efforts’ at federal and state levels. It hope the move will promote economic opportunity and support innovation that can improve financial services to consumers, businesses, and communities.
Over the past 150 years banks and the federal banking system have been the source of tremendous innovation that has improved banking services and made them more accessible to millions. The federal banking system must continue to evolve and embrace innovation to meet the changing customer needs and serve as a source of strength for the nation’s economy,” said Comptroller of the Currency Joseph M. Otting.
“The decision to consider applications for special purpose national bank charters from innovative companies helps provide more choices to consumers and businesses, and creates greater opportunity for companies that want to provide banking services in America. Companies that provide banking services in innovative ways deserve the opportunity to pursue that business on a national scale as a federally chartered, regulated bank.”
Its decision follows “extensive outreach with many stakeholders” over a two-year period, and after reviewing public comments following the publication of Exploring Special Purpose National Bank Charters for FinTech Companies in December 2016, and Comptroller’s Licensing Manual Draft Supplement: Evaluating Charter Applications From Financial Technology Companies in March 2017.
FinTech companies that apply and qualify for, and receive, special purpose national bank charters will be supervised like similarly situated national banks, to include capital, liquidity, and financial inclusion commitments as appropriate.
The companies will also be expected to submit an acceptable contingency plan to address significant financial stress that could threaten the viability of the bank. This plan would outline strategies for restoring the bank’s financial strength and options for selling, merging, or liquidating the bank in the event the recovery strategies are not effective according to OCC. New fintech companies that become special purpose national banks will be subject to “heightened supervision initially, similar to other de novo banks”.
Copyright © 2018 RegTech Analyst
Copyright © 2018 RegTech Analyst
