April 30, 2019

OCC proposed an Innovation Pilot Program for testing of innovative activities in the financial sector. The program would be voluntary and designed to provide eligible entities with regulatory input early in the testing of innovative activities that could present significant opportunities or benefits to consumers, businesses, financial institutions, and communities. Comment period for this proposal expires on June 14, 2019.

Entities eligible for the proposed program would be OCC-supervised financial institutions, including those engaging a third party to offer the innovative product, service, or process. Entities may propose a pilot individually or as a collaborative effort such as a consortium or utility. To be eligible, entities seeking to participate in the program should demonstrate how OCC involvement in the pilot is appropriate and how the proposed activity has the potential to achieve one or more of the following:

  • Meet the evolving needs of consumers, businesses, and communities
  • Promote financial inclusion, fair access, and fair treatment of consumers or small businesses
  • Improve the efficiency or effectiveness of bank processes, operations, or the provision of financial services
  • Mitigate significant risks to individual banks or the overall banking system
  • Advance risk management, security, and regulatory compliance

The program generally provides for OCC engagement in a pilot lasting no less than three months and no greater than 24 months. The duration of the pilot will be assessed on a case-by-case basis and should be commensurate with the nature and objectives of each proposed pilot as well as with the related risks. Within the program, OCC will consider tailored regulatory tools on a case-by-case basis, based on the facts and circumstances presented during the evaluation process. OCC will consider using these tools only when their use would not violate existing laws, involve an unsafe or unsound practice, or cause an unsafe or unsound condition.

 

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Comment Due Date: June 14, 2019

Keywords: Americas, US, Banking, Fintech, Regtech, Innovation Pilot Program, Testing Pilot, OCC

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