Regulation

Comptroller Curry Defends FinTech Banking Charter Plans

Speaking in front of the LendIt conference in New York yesterday (Mar. 6), Comptroller of the Currency Thomas Curry told those assembled that the oversight body will go forward with plans to offer banking charters to fintech companies.

Curry was reportedly defending against charges laid by banking trade bodies and state regulators that such plans are an over-extension of the Office of the Comptroller’s powers.

“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,” Curry told the conference. “That authority includes granting charters to companies that limit their business models to certain aspects of banking, and it is not circumscribed just because a company delivers banking services in new ways with innovative technology.”

Murray mentioned the over 100 comments the office has gotten, paying particular attention to one from Maria Vullo of the New York State Department of Financial Services. Vullo wrote that the OCC “should not use technological advances as an excuse to attempt to usurp state laws that already regulate FinTech activities.”

She further noted that the proposals as set forth will “imperil crucially important state-based consumer protection laws and increase the risks presented by nonbank entities.”

Curry disagreed.

“That’s wrong. State laws that address anti-discrimination, fair lending, debt collection, taxation, zoning, crime and torts generally apply to national banks and will also apply to fintech companies that become national banks.”

Nor is the OCC “somehow mixing banking and commerce,” said Curry. “The OCC understands the importance of maintaining the longstanding separation of banking and commerce. Commingling banking and commerce could introduce risks associated with non-banking-related commercial activities, interfere with the allocation of credit, and foster anti-competitive effects and undesirable concentrations of economic power.”

Curry also noted that the OCC is working to publish a supplement to its existing licensing manual that will further clarify its approach to evaluating applications from fintech companies.

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