In a speech last Wednesday, Noreika lauded the idea of granting bank charters to fintech companies, noting that defining banking “too narrowly” would lead to stagnation of the industry. The idea to allow these companies obtain charters was first proposed by Noreika’s predecessor, former comptroller Thomas Curry last year.
“On principle, companies that offer banking products and services should be allowed to apply for national bank charters so that they can pursue their businesses on a national scale if they choose, and if they meet the criteria and standards for doing so. Providing a path for these companies to become national banks is pro-growth and in some ways can reduce regulatory burden for those companies,” said Noreika, in a July 19 speech, adding that the option for a charter application should stand alongside operating like a state bank, or partnering up with existing banks.
Noreika makes a strong case in noting that the time is ripe for the financial services market to broaden the scope of how it defines “banking”. This is especially important if banks want to keep pace with the breakneck speed at which fintech companies have been reaching new customers through innovation.
But token support of the industry is one thing, but without an actionable plan, it is basically meaningless.
It has been months since the former Comptroller floated the idea of a national banking charter for fintech firms, but there is still no word from OCC with regards to specific guidelines on what and how fintech companies holding the charter would be regulated.
Unanswered questions include whether they would be required to abide by traditional bank liquidity requirements, or whether the OCC would have to collaborate with other regulatory bodies to streamline regulations for the proposed charter.
Noreika himself admitted in his speech that the OCC has not determined whether it will actually accept or act upon applications for the charter, so his show of support for the idea at this point means very little.
Both Noreika and the OCC should speed up the process for the charter framework if they truly want to prove themselves as “pro-growth” and working to "level the playing" field for fintech companies.