Written by Eamonn K. MoranOn July 31, 2018, the Office of the Comptroller of the Currency (OCC) announced that it will begin accepting applications for special purpose national bank (SPNB) charters from nondepository fintech companies engaged in the business of banking. The OCC states that its decision to move forward “is consistent with bipartisan government efforts at federal and state levels to promote economic opportunity and support innovation that can improve financial services to consumers, businesses, and communities.” The decision was documented in a policy statement and supplement to the OCC’s Comptroller's Licensing Manual. The application process and requirements appear largely similar to the guidelines and criteria the OCC previously released in December 2016 and March 2017. In announcing the decision, the OCC’s policy statement and Comptroller's Licensing Manual Supplement emphasize that:
- Every application will be evaluated on its unique facts and circumstances. The OCC will use its existing chartering standards and procedures for processing applications from fintech companies as outlined in the Comptroller’s Licensing Manual. As with all national banks, the OCC will consider whether a proposed bank has a reasonable chance of success, will be operated in a safe and sound manner, will provide fair access to financial services, will treat customers fairly, and will comply with applicable laws and regulations. The OCC will also consider whether the proposed bank can reasonably be expected to achieve and maintain profitability and whether approving the charter will foster healthy competition.
- Fintech companies that apply and qualify for, and receive, SPNB charters will be supervised like similarly situated national banks, to include capital, liquidity, and financial inclusion commitments as appropriate.
- The OCC expects a fintech company that receives a SPNB charter to demonstrate a commitment to financial inclusion. The expectations for promoting financial inclusion will depend on the company’s business model and the types of planned products, services, and activities.
- Fintech companies will be expected to submit an acceptable contingency plan to address significant financial stress that could threaten the viability of the bank. The plan would outline strategies for restoring the bank’s financial strength and options for selling, merging, or liquidating the bank in the event the recovery strategies are not effective.
- New fintech companies that become SPNBs will be subject to heightened supervision initially, similar to other de novo banks.
- The OCC states that it has the authority, expertise, processes, procedures, and resources necessary to supervise fintech companies that become national banks and to unwind a fintech company that becomes a national bank in the event that it fails.
While we are pleased to have you contact us by telephone, surface mail, electronic mail, or by facsimile transmission, contacting Kilpatrick Townsend & Stockton LLP or any of its attorneys does not create an attorney-client relationship. The formation of an attorney-client relationship requires consideration of multiple factors, including possible conflicts of interest. An attorney-client relationship is formed only when both you and the Firm have agreed to proceed with a defined engagement.
DO NOT CONVEY TO US ANY INFORMATION YOU REGARD AS CONFIDENTIAL UNTIL A FORMAL CLIENT-ATTORNEY RELATIONSHIP HAS BEEN ESTABLISHED.
If you do convey information, you recognize that we may review and disclose the information, and you agree that even if you regard the information as highly confidential and even if it is transmitted in a good faith effort to retain us, such a review does not preclude us from representing another client directly adverse to you, even in a matter where that information could be used against you.