Tag: Office of the Comptroller of the Currency (OCC)

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New Special Purpose National Bank Charter for FinTech Companies
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CFPB Revises Supervisory Appeals Process

New Special Purpose National Bank Charter for FinTech Companies

New York partners Anthony Nolan and Judith Rinearson will be speaking in a Strafford live webinar on “New Special Purpose National Bank Charter for FinTech Companies: Evaluating the Benefits and Regulatory Pitfalls on Thursday, March 16 2017 at 1:00pm-2:30pm EDT. This will focus on a recent proposal by the United States Office of the Comptroller of the Currency (OCC) to consider granting special purpose national bank charters to FinTech companies that are engaged in fiduciary activities or in activities that include receiving deposits, paying checks, or lending money. The special purpose charter offers the benefits of federal preemption and some state licensing requirements. However, there are regulatory and supervisory burdens that must be carefully considered such as activity limitations, BSA/AML requirements and minimum capital and liquidity requirements.

The panel will provide an overview of the OCC’s proposal for special purpose national bank charters for FinTech companies and the potential regulatory pitfalls that FinTech companies must consider. The program will address the OCC’s chartering process and the supervisory, financial and operational conditions that would apply. It will review these and other key issues:

  • Benefits of special purpose national bank charters for FinTech companies;
  • Regulatory pitfalls of special purpose national bank charters for FinTech companies;
  • The OCC’s chartering process and the supervisory, financial and operational conditions that would apply;
  • Positions of other relevant US bank regulatory agencies;
  • Implications for the future development of the Fintech industry in the United States.

For more information or to register click here.

CFPB Revises Supervisory Appeals Process

The CFPB recently revised its policy on Appeals of Supervisory Matters.  Supervisory appeals are an avenue for supervised entities to obtain a second opinion from CFPB headquarters about examiners’ findings.  However, the Bureau’s policy excludes the most significant matters — specifically, all aspects of enforcement — from this process.

In 1994, Congress required the federal prudential regulators to establish “an independent intra-agency appellate process” that is “available to review material supervisory determinations,” with “appropriate safeguards … for protecting the appellant from retaliation by agency examiners.”

Although the Bureau is not expressly subject to this congressional mandate, it established a similar appeals process in 2012.  The Bureau’s policy allows entities to appeal less-than-satisfactory compliance ratings (a 3, 4, or 5) and adverse findings in a supervisory letter or examination report, but not the supervisory letter or examination report itself.

None of the regulators allow a supervised entity to use the appeals process to contest the decision to pursue an enforcement action.  But in the case of the OCC, “[w]hile banks may not appeal a decision by [examiners] to pursue a formal enforcement-related action, banks may appeal conclusions in” an exam report that underlies a potential enforcement action.

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