The Impact of the OCC’s Proposed FinTech Charter on Non Bank Lenders
On December 2, 2016, the Office of the Comptroller of the Currency issued a white paper proposing to grant a new federal “special purpose” national bank charter (the “Proposed Charter”) to financial technology companies operating in the United States. The Proposed Charter would allow a company organized under it to operate across multiple states with a single authorization, and could significantly reduce the complexities that the current patchwork of state laws on lending and money transmission has created. In particular, the Proposed Charter could greatly benefit non bank businesses focused on lending (“Non-Bank Lenders”), such as credit funds and marketplace lenders. The Proposed Charter has a number of potential drawbacks, and it will likely appeal only to Non-Bank Lenders willing to accept the substantial costs and oversight associated with being regulated as a national bank.