By Sara Merken
Federal regulators aren’t ready to take concrete steps to offer fintech firms a special charter, acting Comptroller of the Currency Keith Noreika said Sept. 13.
Noreika told a fintech conference in New York that the new administration is still getting its feet wet on the issue. We are only “up to our ankles,” he said.
The OCC last December proposed taking charter applications from fintech firms. That action spawned litigation from state regulators amid questions about whether the agency has the authority to issue the charters.
Noreika became acting OCC director in May and has vigorously defended the agency’s authority in the fintech space. He said the agency and industry players will need to come together and set expectations for both sides ahead of issuing a special charter.
Noreika’s comments come one week after payment processor Square became the second fintech firm to try to secure an industrial loan company charter from the Federal Deposit Insurance Corporation.
“You can’t ignore the changing nature of technology and the banking industry,” Noreika said.
The OCC Office of Innovation, launched in October 2016, recently offered details about a pilot program to allow banks and third-party vendors to test out fintech products and services without the full burden of regulation.
The agency wants to support and encourage innovation without being “strangled” by regulation and a threat of legal liability in the initiative, Noreika said. A pilot program would only provide a certain level of a safe harbor from regulatory oversight and liability, he said.
President Trump’s pick to be comptroller of the currency, Joseph Otting, is awaiting Senate confirmation after the Senate Banking Committee advanced his nomination Sept. 7. Noreika said Otting, the former chief executive officer of OneWest Bank, is “well-suited” to take the changing business of banking to the next level.
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