OCC: Fintech Charter Not a ‘Ticket to Light-Touch Supervision’

A senior OCC official reaffirmed today that the agency’s limited-purpose fintech charter would not lead to “light-touch” supervision for fintech companies.  “I have to dispel the misperception that once the fintech company would become a national bank, weaker and less effective consumer protections will apply and state law would cease to apply entirely,” said Grovetta Gardineer, senior deputy comptroller for compliance and community affairs, speaking at a Women in Housing and Finance event. “Institutions granted a national charter will be held to the high standards of safety and soundness and fairness that all federally chartered banks must meet.”

Gardineer emphasized that fintech firms granted a national bank charter would undergo the same supervision process and be held to the same capital, liquidity and consumer protection standards as OCC-supervised banks. She added that state laws on fair lending, debt collection and other things would still apply, just as they do for nationally chartered banks. Her comments came after a lawsuit filed earlier this week by the Conference of State Bank Supervisors, which said that in moving forward with the limited-purpose charter, the OCC overstepped its authority under the National Bank Act.

The American Bankers Association has offered conditional support for the OCC’s fintech charter proposal, provided that existing rules are applied evenly and fairly and with effective oversight. In previous comments to the agency, ABA emphasized that fintech companies applying for the 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. ABA also called on the OCC to increase its efforts to empower traditional banks to innovate.


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