OCC Fintech Charter

During OLPI’s MPL Policy Summit this past September, Comptroller Curry spoke about the importance of the MPL Policy Summit and OLPI in promoting the continued conversation about the importance of responsible innovation.   Among other things, he asked various questions about whether existing laws were adequate in addressing and promoting responsible innovation.  He asked if the innovations seen in marketplace lending should be regulated, who should be responsible for regulating an organization or activity.  This is where he spoke of the possibility of a federal license or charger for marketplace lenders and fintech firms.

In talking about a fintech charter, he stated that some believe a federal charter could help responsible innovation through ensuring fintech companies receive rigorous, bank-like federal regulation and ongoing supervision.  However, he said others have voiced concerns that a fintech charter would allow fintech companies to avoid certain state consumer protection laws. A full transcript of Comptroller Curry’s remarks can be found here.

This past December, the Office of the Comptroller of the Currency (OCC) issued a white paper entitled Exploring Special Purpose National Bank Charters for Fintech Companies.  The paper sought public responses to the following specific questions to help them assess the pros and cons of a fintech charter:

  1. What are the public policy benefits of approving fintech companies to operate under a national bank charter? What are the risks?
  2. What elements should the OCC consider in establishing the capital and liquidity requirements for an uninsured special purpose national bank that limits the type of assets it holds?
  3. What information should a special purpose national bank provide to the OCC to demonstrate its commitment to financial inclusion to individuals, businesses and communities? For instance, what new or alternative means (e.g., products, services) might a special purpose national bank establish in furtherance of its support for financial inclusion? How could an uninsured special purpose bank that uses innovative methods to develop or deliver financial products or services in a virtual or physical community demonstrate its commitment to financial inclusion?
  4. Should the OCC seek a financial inclusion commitment from an uninsured special purpose national bank that would not engage in lending, and if so, how could such a bank demonstrate a commitment to financial inclusion?
  5. How could a special purpose national bank that is not engaged in providing banking services to the public support financial inclusion?
  6. Should the OCC use its chartering authority as an opportunity to address the gaps in protections afforded individuals versus small business borrowers, and if so, how?
  7. What are potential challenges in executing or adapting a fintech business model to meet regulatory expectations, and what specific conditions governing the activities of special purpose national banks should the OCC consider?
  8. What actions should the OCC take to ensure special purpose national banks operate in a safe and sound manner and in the public interest?
  9. Would a fintech special purpose national bank have any competitive advantages over full- service banks the OCC should address? Are there risks to full-service banks from fintech companies that do not have bank charters?
  10. Are there particular products or services offered by fintech companies, such as digital currencies, that may require different approaches to supervision to mitigate risk for both the institution and the broader financial system?
  11. How can the OCC enhance its coordination and communication with other regulators that have jurisdiction over a proposed special purpose national bank, its parent company, or its activities?
  12. Certain risks may be increased in a special purpose national bank because of its concentration in a limited number of business activities. How can the OCC ensure that a special purpose national bank sufficiently mitigates these risks?
  13. What additional information, materials, and technical assistance from the OCC would a prospective fintech applicant find useful in the application process?

As foreshadowed in Comptroller Curry’s remarks at the MPL Policy Summit, there has been a wide-range of responses to the paper.  Several observers felt that the proposed charter would provide a necessary framework for the responsible growth of marketplace lenders, while other observers feared that it would reduce regulatory burdens for fintech companies –a common theme for both those pro and con the fintech charter was a fear that payday lenders would take advantage of the charter.  It appeared many felt it was appropriate for the OCC to provide a 36% APR cap to ensure the charter would not be available for payday lenders.

OLPI was, in general, positive about the OCC taking steps to improve the regulatory ecosystem in the United States for marketplace lending.

“We view the prospects of a special purpose Fintech national bank charter as an important step for improving the United States’ Fintech ecosystem in line with the efforts of the OCC’s global peers in the UK, Australia, China, and the UAE, to name a few. We believe that, from a public policy perspective, it is far better for financial services regulators to be active participants than onlookers. Protection of consumers, small businesses, and the financial system itself will be more effective if carried out by supervisors who are fully informed and knowledgeable.”

Prof. Cornelius Hurley, Director, Online Lending Policy Institute Inc.

A full copy of OLPI’s response can be found here.  We will provide additional analysis of the other comments to the OCC’s paper, and links to the comments are accessible below.

Comments on the paper are accessible below.

Commenter Affiliation Location Comment Date Read Comment
W. Bradley Wilkes
WingCash, LLC Lehi, UT 1/27/2017 Comment (PDF)
Paul Proctor
ParityPay, Inc.
Juan Andrade
Financial Services and Technology executive and entrepreneur
London, UK 1/19/2017 Comment (PDF)
Bryan A. Schneider
Illinois Department of Financial and Professional Regulation Chicago, IL 1/17/2017 Comment (PDF)
Conor French
General Counsel
Funding Circle San Francisco, CA 1/17/2017 Comment (PDF)
Frank Altman
President and Chief Executive Officer
Community Reinvestment Fund, USA Minneapolis, MN 1/17/2017 Comment (PDF)
Nick Elders
Vice President – Technology Solutions and Services
Jane M. Azia
Bureau Chief
State of New York
Office of the Attorney General
Consumer Frauds and Protection Bureau
New York, NY 1/17/2017 Comment (PDF)
The Honorable Jared Polis
Member of Congress
Congress of the United States
House of Representatives
Washington, DC 1/17/2017 Comment (PDF)
John Court
Managing Director and Deputy General Counsel
The Clearing House Association L.L.C. New York, NY 1/17/2017 Comment (PDF)
Christopher Cole
Executive Vice President and Senior Regulatory Counsel
Independent Community Bankers of America Washington, DC
Christopher B. Killian
Managing Director
Securities Industry and Financial Markets Association Washington, DC
Jo Ann S. Barefoot
Barefoot Innovation Group, LLC
Senior Fellow, Center for Business & Government
John F. Kennedy School of Government, Harvard University
Cambridge, MA 1/17/2017 Comment (PDF)
Kabir Kumar
Director, Global Policy
Omidyar Network Washington, DC 1/17/2017 Comment (PDF)
Manuel P. Alvarez
General Counsel, Chief Compliance Officer
Affirm, Inc San Francisco, CA 1/17/2017 Comment (PDF)
Richard H. Neiman
Head of Regulatory & Government Affairs
Lending Club San Francisco, CA 1/17/2017 Comment (PDF)
Scott Talbott
Senior Vice President of Government Affairs
Electronic Transactions Association Washington, DC 1/17/2017 Comment (PDF)
Randolph Kantorowicz-Toro
Mobile Money Corp. New York, NY 1/16/2017 Comment (PDF)
Thomas J. Miller
Attorney General of Iowa
Office of the Attorney General of the State of Iowa Des Moines, IA 1/17/2017 Comment (PDF)
Juan Suarez
Head Legal Counsel
Coinbase, Inc. San Francisco, CA 1/17/2017 Comment (PDF)
National Consumer Law Center On behalf of its low-income clients and Consumer Federation of America Consumers Union Main Street Alliance U.S. PIRG Washington, DC 1/17/2017 Comment (PDF)
Prof. Cornelius Hurley
Online Lending Policy Institute Inc. Boston, MA 1/17/2017 Comment (PDF)
Nathaniel L. Hoopes
Executive Director
Marketplace Lending Association San Francisco, CA 1/17/2017 Comment (PDF)
Perianne Boring
Founder and President
Chamber of Digital Commerce Washington, D.C. 1/17/2017 Comment (PDF)
John A. Beccia
General Counsel and Chief Compliance Officer
Circle Internet Financial, Inc. Boston, MA 1/17/2017 Comment (PDF)
Stephen T. Middlebrook Jacksonville, FL 1/17/2017 Comment (PDF)
Jules Kim
Chief Operating Officer
Poloniex, Inc. Washington, D.C. 1/17/2017 Comment (PDF)
Responsible Business Lending Coalition 1/17/2017 Comment (PDF)
Brian Peters
Executive Director
Financial Innovation Now Washington, DC 1/17/2017 Comment (PDF)
Christopher Cole
Executive Vice President and Senior Regulatory CounselJames Kendrick
First Vice President, Accounting and Capital Policy
Independent Community Bankers of America Washington, DC 1/17/2017 Comment (PDF)
Jennifer Tescher
President & CEOJeanne M. Hogarth
Vice President
Center for Financial Services Innovation New York, NY 1/17/2017 Comment (PDF)
Keith J. Barnett, Esq.
Troutman Sanders LLP on behalf of Third Party Payments Processors Association Atlanta, GA 1/17/2017 Comment (PDF)
Maria T. Vullo
New York State Department of Financial Services New York, NY 1/17/2017 Comment (PDF)
Robert Morgan
Vice President, Emerging Technologies
American Bankers Association Washington, DC 1/17/2017 Comment (PDF)
Robin L. Wiessmann
of Pennsylvania Department of Banking and Securities
Harrisburg, PA 1/17/2017 Comment (PDF)
Tod R. Burwell
President and Chief Executive Officer
Bankers Association for Finance and Trade Washington, DC 1/17/2017 Comment (PDF)
Greg Kidd
CEO and co-founder
globaliD San Francisco, CA 1/16/2017 Comment (PDF)
Jackson Mueller
Associate DirectorAron Betru
Associate Director Managing Director
Center for Financial Markets
Milken Institute
New York, NY 1/16/2017 Comment (PDF)
Jonathan Solomon
Chief Executive Officer
Red Leaf Chicago, LLC., d/b/a DigitalMint Chicago, IL 1/16/2017 Comment (PDF)
Mackenzie Wallace 1/16/2017 Comment (PDF)
Michelle Sternthal, Ph.D.
Deputy Director of Policy & Government Affairs
Main Street Alliance Washington, DC 1/16/2017 Comment (PDF)
Richard C. Litman 1/16/2017 Comment (PDF)
Albert Goldstein
Chief Executive Officer
Avant, Inc. Chicago, IL 1/15/2017 Comment (PDF)
Ben Craigie
Director of Compliance & Training
Massachusetts Bankers Association Boston, MA 1/15/2017 Comment (PDF)
Brian R. Knight
Senior Research Fellow
Mercatus Center at George Mason University Arlington, VA 1/15/2017 Comment (PDF)
Hester Peirce
Senior Research Fellow and Director,
Financial Markets Working Group
J. W. Verret
Senior Affiliated Scholar/Associate Professor, Antonin Scalia Law School
Brian Simmonds Marshall
Policy Counsel
Americans for Financial Reform Washington, DC 1/15/2017 Comment (PDF)
Dafina Williams
Vice President, Public Policy
Opportunity Finance Network Philadelphia, PA 1/15/2017 Comment (PDF)
Daniel Gorfine
VP, External Affairs and Associate General Counsel
On Deck Capital, Inc New York, NY 1/15/2017 Comment (PDF)
Frank Borchert
General Counsel
College Ave Student Loans
Epic Research
Marlette Funding
Navient Solutions, Inc.
Wilmington, DE 1/15/2017 Comment (PDF)
Jeff Chester and Katharina Kopp Center for Digital Democracy Washington, DC 1/15/2017 Comment (PDF)
Edmund Mierzwinski U.S. Public Interest Research Grop
George Frost, Esq. Law Offices of George Frost Berkeley, CA 1/15/2017 Comment (PDF)
Joe Valenti
Director of Consumer Finance
Center for American Progress Washington, DC 1/15/2017 Comment (PDF)
Lisa S. McGreevy
President and CEO
Online Lenders Alliance Alexandria, VA 1/15/2017 Comment (PDF)
Nick Bourke The Pew Charitable Trusts Washington, DC 1/15/2017 Comment (PDF)
Patrick Murck
Cooley LLP
on behalf of ShapeShift AG _ 1/15/2017 Comment (PDF)
Pete Mills
Senior Vice President
Residential Policy and Member Services
Mortgage Bankers Association Washington, DC 1/15/2017 Comment (PDF)
Richard Eckman
Pepper Hamilton LLP
on behalf of unnamed client Wilmington, DE 1/15/2017 Comment (PDF)
Richard Eckman
Pepper Hamilton LLP
on behalf of LEND360 Wilmington, DE 1/15/2017 Comment (PDF)
George Frost, Esq. Law Offices of George Frost Berkeley, CA 1/15/2017 Comment (PDF)
Roseanne Lazer
Compliance Officer
TransferWise Inc. New York, NY 1/15/2017 Comment (PDF)
Sabrina M. Rose-Smith Goodwin Procter LLP Washington, DC 1/15/2017 Comment (PDF)
Scott Galit
Payoneer Inc. New York, NY 1/15/2017 Comment (PDF)
Adam Rust
Director of Research
Reinvestment Partners Durham, NC 1/14/2017 Comment (PDF)
Marceline White
Executive Director
Maryland Consumer Rights Coalition Baltimore, MD
Andrew Morris
Regulatory Affairs Counsel
National Association of Federally-Insured Credit Unions Arlington, VA 1/14/2017 Comment (PDF)
David Grindal
Director, Solution Consulting
ACI Worldwide Toronto, ONT 1/14/2017 Comment (PDF)
Dong Hong
Vice President, Senior Counsel
Consumer Bankers Association Washington, DC 1/14/2017 Comment (PDF)
Dr. Sead Muftic
BIX Bank Corporation _ 1/14/2017 Comment (PDF)
Jason Gardner
Founder and Chief Executive Officer
Marqeta, Inc. Oakland, California 1/14/2017 Comment (PDF)
Kevin Stein California Reinvestment Coalition San Francisco, CA 1/14/2017 Comment (PDF)
Andy Morrison
Campaigns Coordinator
New Economy Project
on behalf of signees
New York, NY 1/13/2017 Comment (PDF)
Benson F. Roberts
President and CEO
National Association of Affordable Housing Lenders Washington, DC 1/13/2017 Comment (PDF)
Courtney K. Robinson
Policy Counsel
Center for Responsible Lending Washington, DC 1/13/2017 Comment (PDF)
David G. Schroeder
Vice President Federal Governmental Relations
Community Bankers Association of Illinois Springfield, IL 1/13/2017 Comment (PDF)
David Klein
CEO & Co-Founder
CommonBond, Inc New York, NY 1/13/2017 Comment (PDF)
Deborah Hagan
Chief, Consumer Protection Division
Office of the Attorney General
State of Illinois
Chicago, IL 1/13/2017 Comment (PDF)
Dr. Douglas Jackson
Fulcrum IP Corporation Florida 1/13/2017 Comment (PDF)
Eric Weaver
CEO & Founder
Opportunity Fund Los Angeles, CA 1/13/2017 Comment (PDF)
Frank R. Pignanelli
Executive Director
National Association of Industrial Bankers Salt Lake City, UT 1/13/2017 Comment (PDF)
Gary Lewis Evans
President & CEO
Paymency Inc. San Diego, CA 1/13/2017 Comment (PDF)
Jessie Cheng
Deputy General Counsel
Ripple San Francisco, CA 1/13/2017 Comment (PDF)
Joan Aristei
Vice President
Regulatory Legal & Compliance
Oportun, Inc. Redwood City, CA 1/13/2017 Comment (PDF)
John A. Costa
Managing Director
Auriemma Consulting Group New York, NY 1/13/2017 Comment (PDF)
John Taylor
President and CEO
National Community Reinvestment Coalition Washington, DC 1/13/2017 Comment (PDF)
Judith Rinearson
Partner, K&L Gates, MSBA Advisor
Money Services Business Association New York, NY 1/13/2017 Comment (PDF)
Karl A. Racine
Attorney General for the District of Columbia
Government of the District of Columbia
Office of the Attorney General
Washington, DC 1/13/2017 Comment (PDF)
Kevin Foster-Keddie
WSECU Olympia, WA 1/13/2017 Comment (PDF)
Board Chair QCash Financial, LLC
Michael Townsley
Senior Analyst & Policy Counsel
Conference of State Bank Supervisors Washington, DC 1/13/2017 Comment (PDF)
Paul A Waltz
SHAZAM, Inc Johnston, IA 1/13/2017 Comment (PDF)
Peter Renton
Co-founder and Chairman
Founder and CEO
LendIt Conference LLC
Lend Academy LLC
Denver, CO 1/13/2017 Comment (PDF)
Peter Van Valkenburgh Coin Center Washington, DC 1/13/2017 Comment (PDF)
Richard Foster
Senior Vice President & Senior Counsel for Regulatory and Legal Affairs
Financial Services Roundtable Washington, DC 1/13/2017 Comment (PDF)
Christopher F. Feeney
Richard Johns
Executive Director
Structured Finance Industry Group Washington, DC 1/13/2017 Comment (PDF)
Rose Oswald Peels
Wisconsin Bankers Association Madison. WI 1/13/2017 Comment (PDF)
Scott Askins
General Counsel
Kabbage, Inc. Atlanta, GA 1/13/2017 Comment (PDF)
Sushil K. Tuli
President & CEO Brook L. Ames, Esq.
In-House Counsel
Leader Bank, N.A. Arlington, MA 1/13/2017 Comment (PDF)
Thor Tobin Mathison
General Counsel
PromisePay Inc. St. Louis, MO 1/13/2017 Comment (PDF)
Timothy Flacke
Executive Director
Commonwealth Boston, MA 1/13/2017 Comment (PDF)
The Honorable
Tony Cárdenas,
Gregory W. Meeks,
Gwen Moore,
Donald M. Payne, Jr.,
Cedric L. Richmond,
Terri A. Sewell
Members of Congress
U.S. House of Representatives Washington, DC 1/13/2017 Comment (PDF)
William E. Brown
2017 President
National Association of REALTORS® Washington, DC 1/13/2017 Comment (PDF)
Aaron Greenspan
President & CEO
Think Computer Corporation San Jose, CA 1/12/2017 Comment (PDF)
Joseph R. Hasto, Jr.
Chief Financial Officer
Elements Financial Federal Credit Union Indianapolis, IN 1/12/2017 Comment (PDF)
Masayuki Hosaka
Vice Chairman and FinTech Segment Leader
Rakuten Card Co., Ltd.
Rakuten, Inc.
San Mateo, CA 1/12/2017 Comment (PDF)
Robert S. Lavet
General Counsel
Social Finance, Inc. Reston, VA 1/12/2017 Comment (PDF)
Stephen Denis Small Business Finance Association Washington, DC 1/12/2017 Comment (PDF)
Jennifer J. Finger
EVP Strategy and Development
Beneficial State Bank Oakland, CA 1/11/2017 Comment (PDF)
Joel Sherwin
Neopay Los Angeles, CA 1/11/2017 Comment (PDF)
Robert L. Hartwig
Legal Counsel
Iowa Bankers Association Johnston, Iowa 12/29/2016 Comment (PDF)
James R. Ra’anan
General Counsel
IDT Telecom, Inc. Newark, NJ 12/28/2016 Comment (PDF)
Safa Mahzari
12/27/2016 Comment (PDF)
Timothy Li
Kuber Inc. Orange, CA 12/24/2016 Comment (PDF)
John Bordelon
President and CEO
Home Bank, N.A. Lafayette, LA 12/13/2016 Comment (PDF)
Matt Rhodes
Binghamton, NY 12/7/2016 Comment (PDF)
Edward J. Boyle
Bank-tech Executive
Montclair, NJ 12/6/2016 Comment (PDF)
Robert E. Rutkowski Topeka, KS 12/6/2016 Comment (PDF)

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