The Office of the Comptroller of the Currency (OCC) announced on Tuesday that it would be accepting applications for special-purpose national bank charters for financial technology companies, hours after the Treasury Department released a report approving that step (among other required innovations in the regulation of banking). The grant of special-purpose national bank charters would allow fintech companies, marketplace and online lenders, payment service providers and cryptocurrency issuers to conduct regulated banking activities, including making loans and engaging in payments activities, without the need for state-by-state licensing and regulatory compliance.
The recipients of special-purpose national bank charters would operate without FDIC deposit insurance, to the extent applicants would not take deposits, and would be subject to the same standards and level of supervision as similarly situated national banks. This would include comprehensive risk assessment, capital adequacy, liquidity, compliance risk management, consumer protection and fair lending compliance, financial inclusion, recovery and resolution planning, governance and Bank Secrecy Act/anti–money laundering requirements.
In April 2017, a coalition of state banking regulators filed suit against the OCC in the US District Court for the District of Columbia, claiming OCC had exceeded its authority in issuing a fintech charter and had failed to provide adequate opportunities for notice and comment. Originally dismissed on ripeness grounds, it is reasonable to anticipate the case may be reopened now that the OCC has announced plans to accept applications for special-purpose charters.
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