Banking

OCC Says It’s Not Ready For FinTech Banking Applications

The acting Comptroller of the Currency Keith Noreika has officially confirmed that as of yet his office is not ready to take applications from financial technology firms looking to secure a special purpose federal banking charter.

In a statement made in New York yesterday, the Comptroller noted that his office is still working through the fact-finding portion of allowing FinTech charters, which were first unveiled in 2016.

“We aren’t yet ready to accept applications because we want to just talk to these companies to get a sense of what your business line is before we entertain applications,” Noreika said in an interview with Reuters prior to the conference.

The OCC faces issues that are broadly filtering throughout the ecosystem worldwide as financial technology companies are radically changing the financial services landscape with newer, faster digital technology — and traditional financial services players like banks are feeling increasingly disrupted.

But while issuing charters seems a ways off, the OCC has confirmed that it is processing applications from FinTech companies seeking traditional forms of bank charters, such as licenses that are issued to deposit-taking institutions and credit card providers.

“We approach this from what we have a specialty with, which is what we know the best — we know full service banks the best,” Noreika said.

The more exotic licenses, on the other hand, have drawn concern and even lawsuits. The New York Department of Financial Services and a nationwide organization of bank supervisors decided to sue the OCC after it announced last year that it was considering granting special charters.

The lawsuit claims that as a federal regulator the OCC does not have the authority to grant special charters. Such charters, they argue, could weaken consumer protection in the U.S.

Noreika said the OCC had filed a motion to dismiss the cases because the agency is not “anywhere near deciding whether we’re actually going to use” special charters.

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