Fintech applications for national bank charter bring legal, policy concerns
A joint letter to the Office of the Comptroller of the Currency from America’s Credit Unions and other financial services organizations raised significant legal and policy questions about fintech companies’ recent applications for national bank charters. The organizations’ questions center on proposed business plans and whether they align with activities normally performed by national trust banks.
Sent late Thursday, the letter outlines specific concerns and urges the OCC to postpone consideration of the applications from two fintech companies, Wise and Ripple. Their applications for national trust charters would give Wise and Ripple access to both a Federal Reserve master account and to a U.S. bank charter, but without the supervisions and deposit and insurance costs of credit unions and banks.
“Granting these Applications could represent a fundamental departure from existing OCC precedent, and the Associations firmly believe that such a departure demands public input,” the letter reads.
The organizations also note:
- The public portions of the applications do not allow for meaningful public assessment of the fintechs’ proposed business models and operations; and
- Approval despite the fintechs’ lack of traditional fiduciary activity in their applications would represent a significant change in OCC policy, and such a change should only be made with a public notice and comment period to allow appropriate feedback.
America’s Credit Unions’ legacy organizations submitted similar concerns in 2021 when the OCC considered applications from Bitpay and Paxos, which were conditionally approved by the OCC.
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