Those who suggest that the regulator of national banks is considering granting charters to non-financial companies are wrong, the acting comptroller of the currency said Thursday – but if a “fintech” company has ambitions to engage in business on a national scale and meets the criteria for doing so, it should be free to seek a national bank charter, he said.
Speaking to the Georgetown Institute of International Economic Law’s Fintech Week at Georgetown University in Washington, D.C., Acting Comptroller Keith Noreika acknowledged that the Office of the Comptroller of the Currency’s (OCC) continued deliberation of whether to offer national bank charters to fintech companies “seems to get all of the attention.”
“With so much interest, I think it is important for me to update you on where we are in that process and to correct some misperceptions that I see out there,” he said.
Noreika said that a chartered entity, regulated by the OCC, would be a bank, engaged in at least one activity of taking deposits, paying checks, or making loans. “We should not let fear prevent a constructive discussion of where commerce and banking coexist successfully today and where else it may make sense in the future. I think this is a topic that deserves a lot more exploration,” he said.
He said that if a fintech company seeks national operations, it should be able to pursue a charter under OCC’s authority. That includes charters for special purpose national banks or full-service national banks and federal saving associations, as well as other limited-purpose banks, such as trust banks, bankers’ banks, and CEBA (“Competitive Equality Banking Act”) banks, organized only to engage in credit card activities.
“Many fintech and online lending business models fit well into these categories of national bank charters, and there has been some interest in fintechs becoming full-service banks, trust banks, and credit card banks,” Noreika said. “Chartering innovative de novo institutions through these existing authorities enhances the federal banking system, increases choice, promotes economic opportunity, and can improve services to consumers, businesses, and communities.”
The acting comptroller said OCC’s initiative to charter nondepository fintech companies “remains a work in progress.” He reiterated past comments that, in the face of a challenge to the agency’s authority to issue such a charter by the Conference of State Bank Supervisors and the New York Department of Financial Services, OCC will “defend our authority vigorously.”
However, he said the agency has not decided whether it will exercise that specific authority.