The Independent Community Bankers of America® expressed strong concerns with an Office of the Comptroller of the Currency proposal to grant special-purpose bank charters to unregulated financial technology companies. In a comment letter on the agency’s fintech white paper, ICBA said that the OCC lacks explicit statutory authority to grant such charters and should request specific congressional approval prior to issuing a charter. 

“ICBA strongly supports responsible innovation and welcomes the OCC establishing a new Office of Innovation that could potentially help those community banks that are interested in partnering with…‘fintech’ companies,” ICBA wrote. “However, ICBA has strong concerns about issuing special purpose national bank charters to fintech companies without spelling out clearly the supervision and regulation that these chartered institutions and their parent companies would be subject to.”

In its comment letter, ICBA said the OCC should:

• Propose rules for public comment spelling out its examination and supervision expectations and other regulatory requirements, consult with the other banking agencies, particularly the Federal Reserve, concerning such issues as access to the Fed’s payment systems and its discount window,

• Ensure large commercial entities are not allowed to own special-purpose national banks as subsidiaries, which would create conflicts of interest and extend the federal safety net to commercial interests,

• Clearly define what is a “fintech” company and who would be eligible for such a charter, and

• Ensure that any new chartered institution is subject to the same supervision and regulation as required of community banks.

The OCC’s white paper acknowledges the need to hold fintech firms to the same high standards of safety and soundness, fair access and fair treatment that apply to national banks and federal savings associations. However, ICBA cannot support the OCC’s plan without further clarification from agency officials and a more in-depth explanation about the vital components of a special-purpose charter for unregulated fintech firms.