Taking Stock of Proposed Rules for FinTech Companies

Earlier this month, Comptroller of the Currency Thomas J. Curry announced that the Office of the Comptroller of the Currency (OCC) will move forward with plans to create a special purpose national bank charter for financial technology companies. A white paper simultaneously issued by the OCC outlines its proposal for the special purpose charters, citing limited trust banks and credit card banks that have received OCC charters as precedent. But the paper also requests public comments on a range of issues that must be resolved before the OCC can adapt its review and expectations to the wide variety of business models in the FinTech space. All of which means it remains to be seen what effects such a charter will have on the market, particularly in light of the recent election.

A New Option

In his remarks, Curry clarified the role that the special purpose charter would play in the U.S. dual banking system, noting that the issuance of a national charter option does not create an obligation to obtain one. FinTech companies would merely have a new third choice available to them, in addition to a state bank charter (in jurisdictions where they are available); and to remain out of the banking system, perhaps by partnering with or providing services to existing banks and other financial companies. FinTechs that wish to accept deposits must also obtain Federal Deposit Insurance Corp. (FDIC) insurance (subject to certain rarely implicated exceptions), for which a separate application process to the FDIC would apply, as well as additional legal and regulatory requirements.