WASHINGTON—Is the OCC backing away from its proposal to establish a special purpose national bank charter for fintechs? One new report suggests that may be the case, based on recent comments from Keith Noreika, acting Comptroller of the Currency.
As CUToday.info reported, in April the Office of the Comptroller of the Currency announced it would begin considering applications from fintechs to become special purpose national banks. However, the proposal has received a great deal of opposition from bankers.
In late April, state banking regulators filed suit against the OCC and its proposal. The lawsuit was filed in federal district court in Washington, D.C., by the Conference of State Bank Supervisors, which represents state-chartered banks nationally, as well as state bank regulators. The suit argues that the OCC’s charter proposal violates the National Bank Act and other federal banking laws.
In the lawsuit, the state banking regulators allege that the OCC is overstepping its authority under the National Bank Act, and further claims the OCC lacks authority to create a special purpose charter without approval from Congress.
The Independent Community Bankers of America has also challenged the OCC proposal, stating the OCC lacks explicit statutory authority to grant such charters and should request specific congressional approval prior to issuing a charter.
Business Insider recently reported that Noreika, speaking at Georgetown University, provided updates on the agency's progress in passing fintech legislation.
“A possible dark spot was in Noreika's remarks on the OCC's fintech charter. Since the OCC first proposed licensing non-deposit-taking fintechs as special purpose national banks, the proposal has faced criticism and lawsuits, but the OCC stood firmly behind the proposal's merits and its right to implement it. However, while Noreika again defended the OCC's right to license non-depository companies, he also said the agency has not decided whether it will ‘exercise that specific authority.’ This is more ambiguous than the OCC's previous stance, perhaps suggesting the regulator believes the measure won't survive such strong opposition,” Business Insider stated.