A proposal to allow FinTech companies to have special bank charters has been questioned due to the departure of the head of the Office of the Comptrol
A proposal to allow FinTech companies to have special bank charters has been questioned due to the departure of the head of the Office of the Comptroller of the Currency (OCC).
Thomas Curry, the US treasury OCC chief, has planned to stay on after officially finishing his five-year term at OCC, so that he can realize his plan. The latter has reportedly drawn opposition from state regulators.
As he prepared to step down, Curry pointed out that it is important to allow online lenders to have flexibility in the type of license they use.
According to the OCC, it is in the public interest to make special purpose national bank (SPNB) charters available to qualified fintech companies, as the article explained.
Replacing Curry would take months as it requires Senate approval. One of the possible nominees considered to take his place is Joseph Otting, a former associate of Treasury Secretary Steven Mnuchin.
While many fintechs support the introduction of a federal license, state regulators say that they have jurisdiction over lenders that are not actually banks. Following from this, they have sued the OCC over its plan to offer special FinTech charters.
The Conference of State Bank Supervisors, which represents state banking regulators, has opposed the OCC plan by calling it “an unprecedented, unlawful expansion of the chartering authority given to it by Congress.”
The elimination of the special FinTech charter could put off FinTech companies. They may face the difficulties of a lengthy and costly application process for a full banking license, as the article opinionated.