Acting Comptroller of the Currency Keith Noreika Supports National Bank Charters for FinTech Companies

Acting Comptroller Keith A. Noreika described efforts by the Office of the Comptroller of the Currency (“OCC”) to support responsible innovation, particularly with regard to granting national bank charters to FinTech companies.

At the Exchequer Club in Washington, D.C., Mr. Noreika remarked that the federal banking system must be more “inclusive,” and voiced a commitment to removing barriers that prevent the establishment of new banks. Mr. Noreika said that granting national bank charters to banking-oriented FinTech companies is a “good idea” that warrants careful consideration by the OCC, and noted that the banking landscape has evolved. To keep pace with evolution, Mr. Noreika argued, the OCC must avoid defining banks in an overly restrictive manner. By creating an avenue for FinTech companies to receive national bank charters, Mr. Noreika said, the OCC would promote growth and potentially reduce regulatory burdens.

Mr. Noreika addressed two lawsuits filed against the OCC. The first was filed by the New York Department of Financial Services, and the second, by the Conference of State Bank Supervisors. Each lawsuit challenges the OCC’s authority to grant special-purpose charters to FinTech companies that do not take deposits. He asserted that the OCC does in fact have authority to grant the charters in “appropriate circumstances,” and added that the OCC plans to defend that authority “vigorously” in its litigation responses.

Mr. Noreika rejected the argument that established banks would be disadvantaged by allowing FinTech companies to receive national banking charters. Granting these charters might bring FinTech companies “out of the shadows,” he stated, and subject them to a more rigorous and structured regulatory regime, since they would be supervised as national banks.

Mr. Noreika also addressed the contention that granting national charters to FinTech companies could jeopardize consumer protection. Mr. Noreika said that (i) national banks also are subjected to state laws that are designed to protect consumers, and (ii) a multitude of regulations are tailored specifically to national banks and contain strong protections for consumers.

Mr. Noreika highlighted other efforts by the OCC Office of Innovation, such as “office hours,” which are meetings requested by companies with OCC staff to discuss the regulatory implications of financial technology.