Moving Towards a FinTech National Banking Charter?

Over the past two weeks, the Office of the Comptroller of the Currency (“OCC”) has taken two important steps potentially towards the chartering of national trust or special purpose banks focused on FinTech businesses.

First, on September 13th, the OCC published its notice of proposed rulemaking on Receiverships for Uninsured National Banks. This proposal addresses an issue – how the bank would be wound down if insolvent – that has been a prime focus since the 2008-09 financial crisis. By doing so, the proposed rulemaking could be another step in filling in the outlines of an OCC FinTech option. Second, on Wednesday, Sept. 28th, the OCC released a revised version of its Charters booklet for the Comptroller’s Licensing Manual. This revised version pointedly contemplates the chartering of national trust banks and special purpose banks without requiring deposit insurance. While indications to date are that this relief from the deposit insurance requirement is limited, it represents a movement towards chartering uninsured national trust or special purpose banks.

Given the OCC’s expressed interest in exploring the options for FinTech businesses to use the national banking charter, we think it is reasonable to expect further guidance this year on additional steps. If the OCC ultimately allows national trust bank or special purpose bank charters tailored to FinTech businesses – and includes some flexibility on ownership, chartering, and regulatory and supervisory standards – this could provide a significant boost to the options for innovation.