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Battle lines are drawn; OCC debates charters for FinTech firms

Joe Mont | January 24, 2017

The Office of the Comptroller of the Currency recently announced that it could consider applications from financial technology companies that want to become special purpose national banks.

While there are many benefits to tempt FinTech firms, there will be challenges and regulatory burdens that need to be carefully considered.

“The OCC made clear that in important areas—for example, anti-money laundering—that with a national charter you are going to need to meet supervisory expectations with respect to a compliance program,” says Arthur Long, co-chair of law firm Gibson Dunn’s financial institutions practice group. “That is the quid pro quo for the benefits of federal regulation such as preemption of certain state laws. This is not going to be regulation lite.”

In announcing the plan, the OCC stressed that firms that seek a charter will be evaluated to ensure they have a reasonable chance of success, appropriate risk management, effective consumer... To get the full story, subscribe now.