OCC Expected to Release Guidance on FinTech Charter in July 2018
By Eric A. Love and Dan Cohen
On May 24, 2018, Comptroller of the Currency Joseph Otting indicated during a press call that the Office of the Comptroller of the Currency (“OCC”) will release guidance in July 2018 on whether it will move forward with issuing a special purpose charter to FinTech companies. According to press reports, Comptroller Otting had previously indicated that the OCC hasn’t yet made a final decision about issuance of a FinTech charter, although he had also signaled that guidance from the OCC on the matter could be released as early as June. His more recent comments during the press call extend this timetable by a month.
The OCC has met with various FinTech companies about the FinTech charter and, according to press accounts, Comptroller Otting stated that these companies left the meetings less interested in pursuing such a charter, given the substantial requirements that federally-chartered financial institutions must meet. In noting the changing nature of the market landscape, Comptroller Otting reportedly mentioned that many FinTech firms have established partnerships with banks. Although many FinTechs continue to consider a potential federal FinTech charter to be a positive step toward greater regulatory uniformity, some view partnering with existing banks as a way to provide their services without the regulatory compliance hurdles that would accompany such a charter.
If the OCC decides to issue a FinTech charter, the Conference of State Bank Supervisors and the New York Department of Financial Services may opt to renew their legal challenges to the OCC’s authority to issue it. These challenges were previously dismissed by two different federal courts on the ground that the actions were not sufficiently ripe for adjudication because the OCC had not to date granted the charter. We will continue to monitor and report on future developments.