Special Purpose Fintech National Bank Charters: OCC Issues Licensing Manual Supplement for Fintech Company Charter ApplicationsSullivan & Cromwell LLP - August 3, 2018
On July 31, 2018, the Office of the Comptroller of the Currency (OCC) announced that it will consider applications for special purpose national bank charters from financial technology (fintech) companies that are engaged in the business of banking but do not take deposits (Statement). In conjunction with the Statement, the OCC issued a supplement to the Comptroller’s Licensing Manual entitled Considering Charter Applications from Financial Technology Companies, providing additional detail on the conditions that these special purpose entities will be required to meet.
The OCC’s Statement came on the same day that the Treasury Department released its recommendations for facilitating financial innovation. Among other things, the Treasury report urges the OCC to approve “prudent and carefully considered applications for special purpose national bank charters,” but recommends that any chartered fintech companies should not be permitted to accept FDIC-insured deposits in order to reduce any potential risk to taxpayers.