National Fintech Charter

Based on its vision of the national-bank and federal-thrift charters as industry-innovation leaders, the OCC is considering allowing non-bank financial technology (fintech) firms to avail themselves of a special-purpose federal charter. This would bring them under federal safety-and-soundness and resolution rules, as well as clarify the direct reach of consumer-protection standards for retail-focused fintech operations. However, at least with regard to prudential and resolution standards, the OCC could allow considerable variation from standard national-bank practice. While in some cases they might hike consumer-protection and financial-inclusion requirements, in others they might provide considerable cost benefits through less stringent prudential requirements than applicable to like-kind activities housed in a traditional banking organization. Firms that take advantage of this charter would receive not only greater customer confidence, but also the ability to operate across the U.S. rather than under state-by-state usury, consumer-protection, and other requirements that add significant cost and barriers to efficient operations.