NAFCU’s Andrew Morris Monday reiterated the association’s concernsregarding the Office of the Comptroller of the Currency’s (OCC) efforts to create specialized charters, arguing that regulators “should not give preference to fintech as a new model of banking ready to replace traditional institutions, but rather seek to modernize traditional supervisory frameworks.”
By prioritizing this approach, Morris, NAFCU’s senior counsel for research and policy said it will “ensure that the promise of better, more efficient service or expanded access to credit is predicated on responsible innovation rather than regulatory arbitrage.”
NAFCU acknowledges the benefits of fintech and innovation in financial services, and last year released a whitepaper that charts a path toward regulatory coordination between traditional financial institutions and fintech companies. The association has also closely monitored the OCC’s efforts to establish fintech charters, which have faced legal challenges.
However, NAFCU has cautioned the agency against introducing risks to the financial system or undermining consumers’ trust in their financial institution. NAFCU and several other trades last week sent a letter to Acting Comptroller Brian Brooks advising against moving forward with a narrow-purpose payments charter. While the OCC has not formally introduced this charter, Brooks has indicated the agency this fall would unveil a charter that would essentially create a “national version of a state money transmission license” and offer nonbank payment providers “a national platform with preemption.”
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