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12/6/2016

Client Alert: OCC to Offer Special Purpose National Charters to FinTech Companies

Action Item

The OCC just announced plans to issue special purpose national charters to FinTech companies under a proposed new policy. Contact us to formulate any comments you may want the OCC to consider, discuss the scope of this development and how the introduction of these charters might be expected to impact your current operations, including your existing FinTech partnerships.

The OCC FinTech National Charter

On December 2, 2016, Thomas Curry, Comptroller of the Currency, announced the OCC's intention to offer limited-purpose national charters to financial technology ("FinTech") companies that are engaged in certain banking related activities. The OCC also published a paper discussing the agency's considerations with respect to the proposed new charters and is calling for comments to be submitted to the OCC by January 15, 2017.

A link to the announcement, Comptroller Curry's remarks as well as the OCC paper can be found here.

Under the new program, chartered FinTech entities offering services such as mobile payment platforms or online lenders would benefit from the same preemption of state laws as national banks, allowing them greater flexibility to operate nationally without tripping localized regulatory schemes and without having to partner with brick-and-mortar banks. Such entities would be required to meet rigorous chartering standards and would still not be able to accept federally-insured deposits without the approval of the FDIC.

Details of the chartering program have not yet been finalized and it remains unclear how the introduction of FinTech charters will ultimately impact the financial services marketplace.

As this issue evolves, we will continue to monitor the development of the OCC's FinTech chartering program.

We Can Help You

Please contact us if you are interested in discussing how these developments might impact your operations, any current relationships you may have with a FinTech provider or if you wish to formulate comments to the OCC.

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