As the Office of the Comptroller of the Currency considers revising its chartering rules, the agency should seek to uphold strong safety and soundness standards, increase transparency in the chartering process, and move cautiously as new regulatory frameworks develop, the American Bankers Association said today. ABA also called for updated naming rules to ensure charter applicants do not misrepresent the services they intend to offer.
The OCC in January proposed to amend its chartering regulations to clarify that national banks are not limited to performing fiduciary activities. In a letter to the agency, ABA emphasized that the OCC must “ensure that robust, broadly applicable safety and soundness standards are well understood and upheld during this period of rapid innovation” and encouraged the agency to increase transparency throughout the chartering process.
ABA noted that the responsibilities of many recent and likely future charter applicants “are not readily identifiable today because Congress and federal and state regulators have not yet adequately defined regulatory frameworks applicable to entities engaged in stablecoin and other digital asset activities.” The association asserted that the proposed amendment to the chartering regulation is material and merits continued deliberation given its “likely outsized role in the development and implementation of a number of other agencies’ pending rulemakings.”
The letter also highlighted the need for strong safeguards around resolution planning. ABA “strongly encouraged the OCC to ensure that its receivership capacities and related powers and practices are adequate to address any insolvency risks raised by any existing or new OCC charter applicant,” particularly those experimenting with new business lines and unfamiliar operational risks.
As part of its recommendations, ABA stressed the importance of name accuracy for chartered entities to avoid misleading consumers. The association encouraged “OCC to amend its regulations to prohibit any charter applicant – other than a subsidiary of a bank or bank holding company – that limits its activities to either ‘fiduciary activities’ or ‘the operations of a trust company and activities related thereto’ from including the word ‘bank’ in its name.” ABA said that this step would help ensure entities “not have a title that misrepresents the nature of the institution or the services it offers.”
