Acting OCC head Noreika stirs fintech charter debate
20 July 2017 | 9979 views | 0
The new head of the US Office of the Comptroller of the Currency (OCC) has come out fighting in defence of his predecessor's plans to grant special-purpose bank charters to fintech firms, defying pending litigation from state regulators.
The proposals, championed by former US Comptroller James Curry, have led to an acrimonious spat with state supervisors, who argue that the changes will usurp state rules that already exist to nurture innovation and protect consumers. Both the Conference of State Bank Supervisors (CSBS) and the New York Department of Financial Services have filed lawsuits alleging that the OCC is over-reaching its authority in granting charter status to non-banks.
Curry was replaced in May as head of the Federal agency by Trump-appointee Simpson Thacher & Bartlett partner Keith Noreika. In his first major speech on the issue since taking over the reigns, Noreika has dismissed the concerns of state regulators, stating: "Quite simply, I think it is a good idea that deserves the thorough analysis and the careful consideration we are giving it."
While noting that the OCC is not currently considering any specific requests from non-depository institutions, and did not guarantee the OCC would eventually do so, he defended the efforts "for changing the conversation about financial innovation and fintech".
"There is no dispute the OCC has the authority to charter these entities. In fact,the states in their current lawsuits concede as much in their arguments," he notes. "Accordingly, we may well take them up on their invitation to use these authorities in the fintech-chartering context. Many fintech business models may fit well into these long-established categories of special purpose national bank charters."