As part of its ongoing efforts to support innovation in the banking sector, the OCC today requested public feedback on a proposed “innovation pilot program.” Under this program, OCC-supervised banks—and third parties working with these banks—may receive regulatory input early in the process of developing innovative products and services, helping to develop appropriate controls during a pilot. “The program focuses on new or unique activities where uncertainty is perceived to be a barrier to development and implementation,” the OCC said.
The proposed program is distinct from so-called regulatory sandboxes offered by other U.S. and foreign regulatory agencies, which provide a safe harbor for participants from certain laws and regulations. “The program would not provide participating entities with statutory or regulatory waivers or absolve them from complying with applicable laws and regulations,” the agency said. “The program would not release entities from consumer protection requirements.”
Under the proposed terms of the program, OCC-supervised banks could request OCC participation in a pilot of up to 24 months. Tools that the OCC might use include interpretive letters, supervisory feedback and technical assistance. The legal permissibility of the proposed activity must be determined before any live test can begin. Pilot projects must include reasonable controls and exit strategies. Comments on the OCC’s proposed program are due by June 14. For more information, contact ABA’s Rob Morgan.
