US fintech companies may gain the status of national banks

2 December 2016

Fintech companies across the United States will now be able to apply for obtaining the status of special-purpose national banks. US Office of the Comptroller of the Currency (OCC) will be accepting the applications for a charter to become recognized nationwide without any need for complying with multiple regulations in various states.

According to the comments made by Thomas Curry, the Comptroller, at the Georgetown University Law Center, fintech companies feature a great potential as they enhance the coverage of financial services, opening more opportunities for consumers and providing more options for households and businesses to manage their financial affairs.

In order to be eligible for the charter to obtain the new status of the national bank financial technology companies will have to prove their chances for success, demonstrate their due level of risk management, as well as proper policies for consumers protection and stable liquidity and sustainable capital.

It has been for some time that US companies working in the fintech sector have been seeking to have the regulators adopt the new framework that will allow them to perform their operations across the states avoiding the cumbersome process of complying with multiple jurisdictions and regulations.

Thomas Curry notes that in view of the fact there are already about 4000 financial technology businesses operating in the United States and posing real competition to the conventional national banking institutions, the best option for maintaining the health of the country’s financial and federal banking system is to allow those fintech firms enter the system through the ‘front gate’ instead of constraining them and forcing to look for ‘some back door’.

The paper on the agenda was published by the OCC and will be open for discussions through January 15, 2017.

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