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CBAI Again Urges the OCC to Delay Moving Forward in Chartering New Fintech Companies

The Community Bankers Association of Illinois (CBAI) again called on the Office of the Comptroller of the Currency (OCC) to delay moving forward with considering applications for charters for fintech companies. In the OCC’s continuing effort to charter fintechs it published for comment a Licensing Manual Supplement for Evaluating Charter Applications From Financial Technology Companies (“Supplement”). However, the Supplement falls far short of successfully addressing the many concerns raised by CBAI as well as the Independent Community Bankers of America (ICBA), the Conference of State Bank Supervisors (CSBS), and influential Members of Congress on the House Financial Services and Senate Banking Committees. Read CBAI Comment Letter.

CBAI’s observations and recommendations were enumerated in an April 13, 2017 comment letter to the OCC and included the following: the issue of OCC's authority to issue special purpose national bank charters (which was first raised by the CSBS) must be resolved; all of the banking regulators must be involved in public outreach meetings about fintechs and formal rulemaking; fintechs must not be regulated through non-public operating agreements but through specific, established and transparent rulemaking to ensure clear guidance and consistent application of rules and regulations; community banks should not be financially responsible for the OCC developing the skills needed to regulate fintechs; and the OCC must guarantee that fintechs will comply with all banking laws, rules and regulations, and be held to the same rigorous safety and soundness, supervision, regulation and enforcement standards which are required of community banks and bank holding companies.

The bottom line: Fintechs cannot and must not have the advantages of being a national bank with more limited requirements, regulations and liability. Read CBAI Comment Letter.

April 14, 2017