Featured Product

    OCC and CFPB Request for Legal Clarity on Issuance of Fintech Charters

    January 06, 2021

    Brian P. Brooks, the Acting Comptroller of the Currency at OCC, issued a statement endorsing the need for federal charters for fintech companies. The statement was issued on the release of a report from the CFPB taskforce. Mr. Brooks agreed with the conclusion of the report that the nation needs federal charters for fintech companies to effectively, efficiently, and safely serve the financial needs of consumers under a single uniform set of rules. The report also highlights the need for legal certainty about which agency (OCC or CFPB) is authorized to grant charters to fintech companies.

    In the statement, Mr. Brooks mentioned that, under the law, OCC grants national charters to companies engaged in lending, payments, or deposit-taking. In its wisdom, Congress, in the Dodd-Frank Act, separated chartering and prudential supervision from consumer protection enforcement, assigning chartering authority to OCC and specific consumer protection enforcement authority to CFPB. According to the report, the Taskforce recommends that Congress either authorize CFPB to issue federal charters or licenses to non-bank fintech companies engaged in payments, remittances, or lending services, or clarify the authority of OCC. By making CFPB the licensing agency, Congress would assure that consumer protection concerns are at the forefront. The report highlights that OCC, which has a long history of evaluating and granting charters, recently took steps to issue charters to such companies engaged in lending and has announced its intent to do the same with money transmitters. These efforts are subject to legal uncertainty because of questions about whether a non-depository institution can engage in “banking” under the National Bank Act.

    If Congress elects not to authorize CFPB to issue federal licenses, it should clarify that OCC has that authority. This alternative option would ensure that fintech companies operating nationwide are subject to a single set of laws. Moreover, it is noted that OCC has significant expertise in fintech in general and in these services specifically; thus, OCC may be well-positioned to supervise non-bank fintech companies with multistate operations. Regardless of which agency charters the fintech companies, the agency exercising that authority should pay careful attention to any capital requirements and other unnecessary or excessive regulatory burdens. 


    Related Links

    Keywords: Americas, US, Banking, Fintech, Fintech Charters, Regulatory Capital, CFPB, OCC

    Featured Experts
    Related Articles

    EBA Finalizes Templates for One-Off Climate Risk Scenario Analysis

    The European Banking Authority (EBA) has published the final templates, and the associated guidance, for collecting climate-related data for the one-off Fit-for-55 climate risk scenario analysis.

    November 28, 2023 WebPage Regulatory News

    EBA Mulls Inclusion of Environmental & Social Risks to Pillar 1 Rules

    The European Banking Authority (EBA) recently published a report that recommends enhancements to the Pillar 1 framework, under the prudential rules, to capture environmental and social risks.

    October 31, 2023 WebPage Regulatory News

    BCBS Consults on Disclosure of Crypto-Asset Exposures of Banks

    As a follow on from its prudential standard on the treatment of crypto-asset exposures, the Basel Committee on Banking Supervision (BCBS) proposed disclosure requirements for crypto-asset exposures of banks.

    October 19, 2023 WebPage Regulatory News

    BCBS and EBA Publish Results of Basel III Monitoring Exercise

    The Basel Committee on Banking Supervision (BCBS) and the European Banking Authority (EBA) have published results of the Basel III monitoring exercise.

    October 18, 2023 WebPage Regulatory News

    PRA Updates Timeline for Final Basel III Rules, Issues Other Updates

    The Prudential Regulation Authority (PRA) recently issued a few regulatory updates for banks, with the updated Basel implementation timelines being the key among them.

    October 18, 2023 WebPage Regulatory News

    US Treasury Sets Out Principles for Net-Zero Financing

    The U.S. Department of the Treasury has recently set out the principles for net-zero financing and investment.

    October 17, 2023 WebPage Regulatory News

    EC Launches Survey on G7 Principles on Generative AI

    The European Commission (EC) launched a stakeholder survey on the draft International Guiding Principles for organizations developing advanced artificial intelligence (AI) systems.

    October 14, 2023 WebPage Regulatory News

    ISSB Sustainability Standards Expected to Become Global Baseline

    The finalization of the two sustainability disclosure standards—IFRS S1 and IFRS S2—is expected to be a significant step forward in the harmonization of sustainability disclosures worldwide.

    September 18, 2023 WebPage Regulatory News

    IOSCO, BIS, and FSB to Intensify Focus on Decentralized Finance

    Decentralized finance (DeFi) is expected to increase in prominence, finding traction in use cases such as lending, trading, and investing, without the intermediation of traditional financial institutions.

    September 18, 2023 WebPage Regulatory News

    BCBS Assesses NSFR and Large Exposures Rules in US

    The Basel Committee on Banking Supervision (BCBS) published reports that assessed the overall implementation of the net stable funding ratio (NSFR) and the large exposures rules in the U.S.

    September 14, 2023 WebPage Regulatory News
    RESULTS 1 - 10 OF 8938