Fintech, the US Government, and Regulations

The US Office of the Comptroller of the Currency (OCC) has been receiving criticism for a proposal considering a charter designating fintechs to be licensed as “special purpose national banks” (BI Intelligence). OCC Head Thomas Curry defended the charter through several points. Ultimately, many of the concerns centered around an unclear definition of fintechs and what they would qualify for. Curry clarified that fintechs would not be required to take deposits to qualify for the charter, and that instead, “a company offering any combination of federal banking services falls under the OCC’s mandate” (BI Intelligence). This makes all or at least most fintechs qualified for the charter without individual Congress approval. The next concern was about loose regulations allowing fintechs to take advantage of loopholes and not prioritize consumer protection. Curry only added here that “predatory” fintechs would not be given charter, and that all chartered fintechs would be subject to stringent regulation.

I personally see value in giving legal and regulatory recommendation. As fintechs expand, it is important to have clear definitions and be able to protect consumers. These criticisms do not give me much clarity that this charter is the way to go. While Curry defended it well, and I believe was clearly able to discuss the definition of a qualifying fintech, I am more concerned about regulations and consumer protections. Curry was unable to elaborate as well on how consumers would be protected or fintechs would be prevented from exploiting loopholes. I think full consumer awareness is vital, and since they have much less power than a corporation should something go wrong, need to be fully protected.

Source: http://www.businessinsider.com/the-us-government-is-defending-its-fintech-charter-2017-3