In a March 10, 2017, letter to Comptroller Thomas Curry, 34 members of the House Financial Services Committee (HFSC) wrote the OCC regarding its intention to issue special purpose national banking charters to fintech companies without providing details of the charter or an opportunity for comment. CBAI thanks Illinois Congressman Randy Hultgren (R-14th) for taking a leadership position in examining and questioning the OCC’s fintech charter initiative. Read HFSC Comment Letter. Read CBAI Comment Letter.
The HFSC letter stated, “In light of the importance and complexity of the issue, the OCC should not rush this decision. The OCC should provide a full and fair opportunity for stakeholders to see the details for the special charter, solicit feedback, and allow the incoming Comptroller to assess the special purpose charter.” The letter notes that Comptroller Curry’s term of service will expire in April of 2017. It concludes with a warning, “If the OCC proceeds in haste to create a new policy for ‘fintech’ charters … please be aware that we will work with our colleagues to ensure that Congress will examine the OCC’s actions and, if appropriate, overturn them.
”In a January 13, 2017 comment letter to the OCC, CBAI expressed concerns about the OCC issuing special purpose fintech charters and recommended that the OCC:
- clearly demonstrate it is fully prepared to assume the many new responsibilities of regulating fintechs;
- resolve the issue of the legality of the OCC issuing fintech charters which has been raised by the Conference of State Bank Supervisors (CSBS);
- include the other national banking regulators and the CSBS in formal outreach meetings regarding fintechs and joint rulemaking which will be available for public comment;
- and to not regulate fintechs through operating agreements which lack the transparency and consistency of formal rulemaking.
The comment letter concluded, “CBAI urges the OCC to guarantee that Fintechs will comply with all banking laws, rules and regulations, and be held to the same rigorous safety and soundness, and supervision and regulation standards currently being required of community banks and bank holding companies. These standards must include but not be limited to frequent examination, CRA compliance, compliance with laws to protect consumers, regulatory actions for noncompliance, sanctions and prohibitions, and personal liability for Fintech directors and officers. Fintechs cannot have the advantages of being a national bank with limited requirements, regulations and liability."
CBAI again thanks Congressman Hultgren for his leadership on this issue and stands prepared to work with Congress should action be required to ensure that fintech charters do not gain a regulatory advantage over community banks.