The OCC’s Request for Comments and Discussion on the Future of Fintech Regulation

By Charles P. Carter and Anthony (Tony) Yerry

U.S.-based digital banking startups have raised more than $10 billion since 2010, and investment in financial technology (“fintech”) companies has surpassed $24 billion worldwide. These firms are attempting to disrupt the banking value chain by providing services such as lending, bill payment, wealth management, and mobile banking. The significant federal and state regulation of these services create an obstacle for these fintech companies that technology companies in other vertical markets, such as social, internet infrastructure, and enterprise technology, do not face. It is critical for these companies, at the earliest stages of development, to understand how and when to engage with regulators and to build a culture of compliance, and it is critical for regulators to listen and adapt to the complaint from traditional banks and startups that the current regulatory framework stifles innovation and is unable to provide oversight for new forms of finance and banking.

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