Today, the Office of the Comptroller of the Currency (OCC) released their long-awaited supplement on the new Fintech Charter. They officially announced the new charter back in December and began a 45-day open comment period. They received over 100 comments and addressed many of these comments in this supplement.

The 16-page draft licensing supplement provides more details on the new Fintech Charter and is expected to be a supplement to the existing OCC licensing manual. They addressed issues such as capital requirements, liquidity, financial inclusion plans, consumer protection and the application process.

First and foremost the OCC Fintech Charter is about encouraging innovation in finance. The OCC discussed that directly in the supplement:

The OCC has long supported innovation in the national banking system. Federally chartered institutions have continually sought new approaches to meet the needs of customers and an evolving marketplace. It has been and remains the OCC’s role to encourage and support institutions’ efforts to engage in responsible innovation to meet the needs of consumers, businesses, and communities. The OCC’s decision to issue the draft Supplement is consistent with that support. It is also one component of an initiative that began in 2015, when Comptroller of the Currency Thomas J. Curry announced the agency’s efforts to better understand innovation occurring in the financial services industry and to develop a framework to support responsible innovation in the federal banking system.

The Fintech Charter has received a mixed reception on Capitol Hill to say the least. The House Financial Services Committee sent a letter to Comptroller Curry last week warning him to not proceed with haste in pushing this new charter through before his term expires on April 9. The timing is interesting because they also announced today a new comment period on this supplement which is open until April 14. President Trump has not nominated a new Comptroller yet and Thomas Curry can serve until his replacement is confirmed. Of course, we have no idea if the new Comptroller will be a supporter of this Fintech Charter or not. [Read more…]

Back in early December the OCC announced their intention to create a national Fintech Charter. At the time they announced a request for public comments until January 15. Lend Academy and LendIt sent in a combined response before the deadline and it is reproduced below. You can also read it in PDF format here.

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The Office of the Comptroller of the Currency (OCC) has been regulating national banks since the time of Abraham Lincoln. The head of the OCC, Thomas Curry, has talked about using the authority of his office to create a special purpose fintech charter. Today, at a speech in Washington DC he laid out his plans.

Along with this speech the OCC released a paper titled, Exploring Special Purpose National Bank Charters for Fintech Companies which is available on their website. It goes into some detail about their plans and what they are trying to achieve with this charter. The OCC has requested public comment until January 15 and I am sure they will be inundated with responses.

This new charter goes beyond just lending platforms, it has quite a broad scope. From the white paper:

A special purpose national bank may limit its activities to fiduciary activities or to any other activities within the business of banking. A special purpose national bank that conducts activities other than fiduciary activities must conduct at least one of the following three core banking functions: receiving deposits, paying checks, or lending money.

How the New Fintech Charter Applies to Marketplace Lending

We reached out to Brian Korn, a partner with Manatt, Phelps & Phillips to give his initial thoughts on the new charter. Here are some of these thoughts: [Read more…]