Despite concerns raised by Democratic senators, the Office of the Comptroller of the Currency is moving ahead with plans to issue charters to qualified fintech companies.
“We will be issuing charters to fintech companies engaged in the business of banking because it is good for consumers, businesses, and the federal banking system,” Comptroller Thomas Curry said in a speech Monday at the LendIt USA 2017, a fintech conference in New York.
Curry announced in October that the OCC would be developing guidelines for companies that wanted to receive the new charter. The agency solicited comments, and more than 100 people responded, he said.
After reviewing those comments, Curry said the agency will go ahead with its plan to issue charters to fintech companies.
Two Democratic senators have said that the OCC should not issue charters to fintech companies.
In a letter to Comptroller of the Currency Thomas Curry, Sens. Sherrod Brown (D-OH) and Jeff Merkley (D-OR) said the agency would be exceeding its statutory authority if it issued such charters. Merkley and Brown, the ranking Democrat on the Senate Banking Committee, said it is up to Congress to decide whether fintech companies should be chartered and who should issue the charters.
In his speech, Monday, Curry contended that the OCC does have the authority to issue such charters.
“To be clear, the National Bank Act does give the OCC the legal authority to grant national bank charters to companies engaged in the business of banking,” he said. “That authority includes granting charters to companies that limit their business models to certain aspects of banking, and it is not circumscribed just because a company delivers banking services in new ways with innovative technology. “
He added that the law does not require that a bank take deposits to qualify for a national bank charter, saying that the OCC has been issuing national charters to limited-purpose banks for decades.
Curry also said that he wanted to dispel the notion that “receiving a national bank charter is a ticket to light-touch supervision.”
He said the newly chartered institutions would be examined by qualified examiners and that the standards for the institutions would be the same as for banks.
The new institutions would be subject to appropriate capital and liquidity standards, he said.
Fueling some of the concerns is the idea that once a fintech company is chartered it would be subject to less stringent federal laws and that state policymakers would have no oversight, Curry said.
That’s not the case he said, adding that federal laws have become stricter since the financial crisis.
“Federal preemption has also changed as result of the Dodd-Frank Act, which clarified the scope of the OCC’s application of federal preemption for national banks,” he said.
As a result, he said, state laws addressing “anti-discrimination, fair lending, debt collection, taxation, zoning, crime, and torts, generally apply to national banks and will also apply to fintech companies that become national banks.”
