ABA today said it “opposes efforts by the OCC to approve a non-depository payments charter.” The association urged “Congress to actively discharge their oversight prerogatives regarding the legality and administrative processes connected to any such charters,” the ABA said in a statement for the record for a House Financial Services Committee hearing scheduled for tomorrow.
While there is yet no formal proposal, Acting Comptroller Brian Brooks has signaled his intention to move forward with the creation of a narrow-purpose payments charter without issuing a formal proposal, and that he would welcome bank applications from non-depository payments companies. “This proposal would have serious unintended consequences, creating regulatory gaps that leave consumers exposed and vulnerabilities in the larger banking system,” ABA said.
Among other things, ABA urged lawmakers to ensure that any new charters be subject to the same stringent regulatory and supervisory standards that currently apply to banks. The association emphasized that when considering new charters, regulators should engage in an open, transparent process, adding that “major policy determinations should be made with robust public input and should not be implemented via the approval of an individual charter.”