Acting Comptroller of the Currency Michael Hsu signals greater oversight on fintech charters

In testimony before the House Financial Services Committee this week, acting Comptroller of the Currency Michael Hsu suggested fintech charters may be looked at more closely. It’s a way to ensure fintech charters are granted in a “safe and sound way, where we can adapt to the innovation.”

Why should we care?
The OCC is concerned that granting charters to fintechs will convey the benefits of banking without its responsibilities. Hsu is also concerned that some industry participants, particularly large banks, haven’t paid enough attention to risk management. There are also hints that the Biden-era OCC may backpedal on some of the moves undertaken by previous Comptroller of the Currency Brian Brooks. “We created an Office of Innovation, updated the framework for chartering national banks and trust companies, and interpreted crypto custody services as part of the business of banking. I have asked staff to review these actions," Hsu said. During the prior administration, the Office of the Comptroller of the Currency ushered in a new special-purpose charter for fintech firms and approving trust charters for crypto companies. If moves from the last comptroller are reversed, it certainly won’t be the only recent example. Earlier this week, the OCC said it was stopping implementation of most of the key provisions of its 2020 rule reforming the Community Reinvestment Act.