Comptroller of the Currency Joseph Otting today highlighted his agency’s efforts to foster responsible innovation, including through the creation of its special purpose fintech charter.
In remarks at the FDIC’s fintech conference, Otting noted that the OCC continues to see charter conversations “evolving around a couple buckets,” including mostly entities involved in “small-ticket lending activities where they see the ability to operate on a national scale with their business model,” as well as custody entities. As regulators, Otting added, “we have to be open, we have to encourage people to come in and have dialogue with us.”
In another panel discussion focusing on the role of regulatory agencies in innovation, CFTC Chief Innovation Officer Daniel Gorfine noted that “you have to make sure you understand how the tech is evolving before you issue guidance,” and that “you don’t want a regulator to act preemptively,” as it could lead to prescriptive requirements that ultimately stifle innovation.
Paul Watkins, director of the Office of Innovation at the Consumer Financial Protection Bureau, added that through its regulatory sandbox initiative, the bureau is working to “understand technology on the front end before things go wrong.” He added, “it’s crucial that we’re not coming in on the back end, after consumers have been harmed.”