Special-Purpose Fintech National Banks
Under Comptroller Otting, the Office of the Comptroller of the Currency has finalized its version of a proposal first broached by Thomas Curry in the Obama Administration to create special-purpose charters for national banks focusing solely on financial technology.1 Effective immediately, the new policy may lead to a stream of non-banks using the many advantages of a national charter to offer nationwide an array of products and services in partnership with banks, on their own, and, where these are packaged with parent-company offerings, in ways now impermissible for traditional banks. However, while the prudential and financial-inclusion standards applicable to these charters may in some ways be more lenient than those governing traditional national banks, they may still prove onerous for business models that to date have eschewed regulatory capital and the risk-management controls that would be required of them. Each charter application is likely to face considerable public notice and comment unless or until enough charters are operating to reduce the novelty of the OCC’s new framework.

FINTECH20.pdf