Office of the Comptroller of the Currency to Issue Charters to Payment Companies

Despite vehement opposition from much of the financial community, Acting Comptroller of the Currency, Scott Brooks, apparently is going ahead with his plan to issue narrow bank charters for activities such as payments.

National Association of Federally-Insured Credit Union officials said earlier this week that Brooks had told them that the OCC will proceed “in a manner that is transparent, deliberate, measured, and consistent with the laws and regulations governing the federal banking system.”

He made similar comments to reporters.

Traditional banking industry trade groups, including the Credit Union National Association and NAFCU, contend that Brooks’ proposal is ill-advised and was formed without using the proper regulatory process, which would allow public comment.

In addition, an official representing state banking regulators condemned the OCC plan. “While the OCC disregards the statutory limits of its authority as set by Congress and the rule of law in ignoring a federal court ruling, state regulators are focused on their responsibility to protect consumers and foster economic development across the country,” said John Ryan, president/CEO of the Conference of State Bank Supervisors. “State regulators are opposed to this unconstitutional expansion of power.”

He compared the payments proposal to an ill-fated plan by the OCC to issue charters to financial technology companies. In May 2019, a federal district judge ruled that the OCC could not issue fintech charters because the term “business of banking” requires “receiving deposits as an aspect of the business.”

“The OCC’s proposed payments charter is no different than the fintech charter already rejected in federal court and subject to a nationwide order preventing the OCC from accepting applications from a company that does not take deposits,” he said. 

The OCC is appealing that decision.

Related:

Comptroller Under Fire for Special Bank Charter Proposal

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