OCC Fintech Plan Faces Uncertainty as Comptroller Term Expires
As the term of Comptroller of the Currency Thomas Curry expires and with no replacement in sight, the OCC could be headed toward a showdown with Congress over the agency’s decision to issue special charters to fintech companies.
Curry announced in October that the OCC would be developing guidelines for companies that wanted to receive the new charter. The agency solicited comments, and more than 100 people responde.
In March, the OCC published a draft supplement to its licensing manual, which contains existing regulations for chartering national banks.
Comments on that supplement were due April 14.
And although Curry said the OCC will issue charters to fintech companies, his own future is in doubt. His term expired this month and President Trump has not nominated a replacement, although Joseph Otting, a former associate of Treasury Secretary Steven Mnuchin at OneWest Bank ,has been mentioned as a possible nominee.
But even when Trump selects a nominee, the Senate confirmation process could take months.
Until then, Curry presumably could continue to serve.
House Financial Services Committee Republicans--led by Chairman Jeb Hensarling (R-Texas) -- have warned that they might take action if they are not pleased with the OCC’s action.
“In light of the importance and complexity of the issue, OCC should not rush this decision,” they said in a letter to Curry last month.
They said the OCC should allow stakeholders the opportunity to review the special charter and permit the incoming comptroller the chance to assess the charter.
And they delivered a blunt warning.
“If the OCC proceeds in haste to create a new policy for fintech charters without providing the details for additional comment or rushing to finalize the charter prior to the confirmation of a new Comptroller, please be aware that we will work with our colleagues to ensure that Congress will examine the OCC’s actions and, if appropriate, overturn them,” the GOP members said.
On the other side of the Capitol, some Senate Democrats have questioned whether the OCC has the power to issue such charters.
Sens. Sherrod Brown (D-OH), ranking Democrat on the Senate Banking Committee and Jeff Merkley (D-OR) said earlier this year that authority to issue such charters must come from Congress.
Meanwhile, traditional banking and credit union trade groups are divided over the charter proposal.
Earlier this year, NAFCU said that the OCC must ensure that online lenders are subject to the same consumer protections and data standards as banks and credit unions.
The Independent Community Bankers of America last week called on the OCC to rescind the proposal and seek specific authority from Congress to issue fintech charters. The group also said that the OCC plan is so vague that it “raises serious concerns as to whether the OCC is creating a new category of banks that will be less regulated than an insured depository institution. “
The American Bankers Association has said it supports the concept of the OCC issuing fintech charters, but wanted it to ensure that companies meet the same standards as traditional banks. And the ABA said it wanted the OCC to encourage “additional dialogue to address lingering questions.”