US regulator creeps towards position on fintech charter
The head of the US Office of the Comptroller of the Currency (OCC) says it will publish its position on a proposed fintech charter within the next three months.
As reported in September 2017, the acting comptroller said it was in the exploratory phase of its fintech charter. The controversial charter has been welcomed by some in the industry, although there is some uncertainty as to whether capital and other requirements still could be too high for all but the largest tech companies.
State regulators, however, are (and were) up in arms, saying there’s no need for federal regulation of fintechs and such a move also could weaken consumer protections.
One of those suits, brought by the New York Department of Financial Services, was dismissed by a Manhattan federal judge in December, while another brought by the Conference of State Bank Supervisors is still pending.
In the latest development, we’re sort of edging slowly towards some facts and details.
According to Reuters, Joseph Otting, who was appointed comptroller in November, said at a conference this week in Washington hosted by the Independent Community Bankers of America that the regulator was aiming to publish its position on the charter within the next 60 to 90 days.
“We haven’t concluded on the position and we welcome people’s feedback. But I would say that if we did allow fintech to be regulated, they would be subject to the same rules and regulations as other banks,” said Otting, who is the first former banker to lead the OCC in decades.
Reuters adds that Otting also told the audience that the agency would be releasing a consultation within the next month on updating the Community Reinvestment Act, decades-old rules which aim to promote lending to low-income communities.
Interestingly, the Huffington Post had something else to add about these events.
It said that Otting announced: “I like banks.” And the OCC is “supposed to be a bank watchdog”.
The Huffington Post reminds us that Otting was working as a banking executive during the mounting subprime lending debacle years at US Bancorp and OneWest Bank, where he was CEO.
At that time, OneWest came under “heavy criticism” for how it handled foreclosures after the subprime crisis.
Politicians have also chimed in, as they often do, with Senator Sherrod Brown (D-Ohio) slamming Otting during his confirmation hearings last year.
Brown tweeted that the Trump administration is “putting the banking industry back in charge of policing itself” and Otting “is yet another bank exec who profited off the financial crisis who is being rewarded by the Trump Administration”.
