In addition to compliance change management, OCC highlighted growing compliance risks for anti-money
laundering and Bank Secrecy Act rules. The agency noted that technology designed to improve efficiency can
“create vulnerabilities that can be exploited by criminals,” adding that “timely identification” of these openings
“continue[s] to present challenges.” Read the report.
ABA SUPPORTS CONSISTENCY, OVERSIGHT IN FINTECH CHARTER
ABA on January 17 offered its support for OCC’s proposal to grant special-purpose national bank charters to
financial technology firms, as long as existing rules are applied evenly and fairly and with effective oversight. In
its comment letter, ABA recognized the OCC’s efforts to facilitate responsible innovation within the banking
system, emphasizing that the implementation of the new charter will be critical to ensuring a level playing field for
banks and fintech companies. “The OCC must ensure that the appropriate regulations apply consistently to all
national bank charters and that no regulatory gaps emerge,” ABA said.
Specifically, ABA said that fintech companies applying for a limited-purpose charter must be held to the same
standards as national banks in terms of governance structure, capital and liquidity requirements, compliance risk
management and financial inclusion, among other things. The association urged OCC to work with other
agencies “carefully and cooperatively to assure that no current policy lines are directly or inadvertently moved as
a consequence of this action.”
ABA added that in addition to granting a limited-purpose charter to fintech firms, OCC must also remain focused
on empowering traditional banks to innovate. “Banks are the original fintech companies and have a long history
of bringing innovative services to customers in a responsible manner,” said ABA’s Rob Morgan. “There are a
number of steps that OCC can take to help facilitate this. These include enabling banks to undertake limited-scale tests of innovative products and making it easier for banks to partner with fintech companies.”
ABA will continue to provide feedback to OCC as the agency works through the details of the fintech charter in
the weeks and months ahead. Read ABA’s comment letter. Read ABA subsidiary BAFT's comment letter.
OCC: Fintech Charter Has ‘Very High Bar’; Few Applicants Expected
Earlier, during an ABA member webinar, senior OCC officials provided more details about the agency’s proposed
special purpose national bank charter intended for innovative fintech firms. The officials noted that the charter is
not a different kind of charter; it would be a national bank charter, with all of the privileges and responsibilities
The agency will hold applicants to a “very high bar” on par with existing national bank charters, said OCC Acting
Chief Innovation Officer Beth Knickerbocker, adding that this would limit the interest.
As the OCC has previously noted, fintech charter applicants that do not hold deposits would not be subject to the
Community Reinvestment Act and other laws specific to FDIC-insured banks. However, OCC Deputy Chief
Counsel Karen Solomon noted that “a firm that gets a national bank charter should have obligations related to
community investment or financial inclusion.” She said OCC would design ways that firms can meet financial
inclusion obligations and that the OCC was preparing a written policy for applications.
Solomon also emphasized that the agency is very conscious of the need to avoid regulatory gaps with respect to
the entities that the agency charters. To avoid gaps, as they do with uninsured national trust banks, they would
condition approval on compliance with an operating agreement that spells out particular conditions that must be
met and would be subject to supervision and enforcement.