OCC Requires FinTech Applicants To Apply As Nondepository Institutions

The Office of the Comptroller of Currency (“OCC”) recently  established that it will use its authority to grant special-purpose charter to allow FinTech companies into the banking system.  The charter details have not yet been finalized.  In order to apply for this special-purpose charter, a company must engage in fiduciary activities, or either one of the three core banking functions: lending money, check processing or receiving deposits.

It appears that the OCC will require fintech applicants to apply as nondepository institutions, meaning that these fintect firms will not require FDIC insurance as they will not take deposits.  However, the OCC  could make some requirements part of the chartering process, including, but not limited to requiring  compliance with the Community Reinvestment Act.   This process will benefit our fintech clients who have been subject to regulatory compliance and licensing issues in the states where they operate.  This national charter will grant the same preemption  that currently held by  national banks.   We look forward in assisting our clients in obtaining these charters and continuing to work with the strategic alliance  model.

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