Last week I was in Washington DC to attend the third annual Online Lending Policy Summit. This is the annual get together in Washington of the Online Lending Policy Institute where regulators, lawmakers and the industry come together to discuss regulatory frameworks and responsible innovation.
The big topic of the day was the OCC’s Special Purpose National Bank Charter also known as the Fintech Charter. The topic was laid out for the audience by the first keynote speaker, Grovetta Gardineer, the Senior Deputy Comptroller for Compliance and Community Affairs at the OCC. She talked about the history of the OCC going back to 1863, with the National Banking Act, when the dollar supplanted state currencies as the sole currency of the United States, a revolutionary idea back then. Ms. Gardineer reaffirmed the authority of the OCC to introduce a national fintech charter and talked about how companies should proceed if they are interested. While she would not comment on specifics she did say that the OCC is currently having preliminary conversations with fintech companies but no formal application has been received yet.
The new head of the CFPB’s Office of Innovation, Paul Watkins, talked about the importance of the regulatory sandbox concept. He was one of the architects of the Arizona fintech sandbox and he is bringing that knowledge with him to Washington. He talked about the two main tools to help facilitate innovation at the CFPB: their trial disclosure program and the no action letter. The only recipient so far of a CFPB no action letter was Upstart so it was fitting that Alison Nicoll, General Counsel at Upstart, came on stage to direct the Q&A after Mr. Watkins presentation. He said he would like to see increased cooperation between states and the federal government when it comes to sandboxes. He also said it is very rare to see fraud occur within a sandbox as fraudsters tend not to want to enter a collaborative relationship with a regulator.