Regulation

OCC Gearing Up To Publish Position On FinTech Charter

The Office of the Comptroller of the Currency (OCC) is getting ready to release its position on a proposed charter for online lenders and other FinTech companies in the next three months.

According to Reuters, FinTech companies have been waiting to see if OCC Chief Joseph Otting would move forward with the charter, which would allow FinTech firms to conduct business throughout the country.

The charter was introduced by Otting's predecessor Thomas Curry in 2016.

“Technology-based products and services are the future of banking and the economy,” Curry said at the time.

The aim of the charter is to help FinTech companies reach people who are underserved by traditional banking, as well as help them maintain consumer protections. The FinTechs that receive a charter would be subjected to regular scrutiny to ensure they are meeting the standards of the OCC.

The charter has been on hold, though, due to lawsuits from state regulators that license FinTech firms. They believe that an OCC charter exceeds the agency’s authority.

But one of the suits, brought by the New York Department of Financial Services, was dismissed by a Manhattan federal judge in December. Another filed by the Conference of State Bank Supervisors is still pending.

Otting, who was named the U.S. Comptroller of the Currency in November 2017, said at a conference that the OCC wanted to publish its position on the charter within the next 60 to 90 days.

“We haven’t concluded on the position and we welcome people’s feedback. But I would say that if we did allow FinTechs to be regulated, they would be subject to the same rules and regulations as other banks,” he said.

He added that the agency would also be releasing a consultation within the next month on updating the Community Reinvestment Act, decades-old rules designed to promote lending to low-income communities.

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