On Friday December 2nd, the Office of the Comptroller of Currency (“OCC”) announced that it would start considering applications for special purpose national bank charters from fintech (financial technology) companies. The OCC believes that providing fintech companies charters will establish a regulatory framework for the fintech industry. As noted by the OCC, a company receiving the special purpose national bank charter will be “held to the same rigorous standards of safety and soundness, fair access, and fair treatment of customers that apply to national banks and federal savings associations.”

In addition to regulation by the OCC, a fintech company receiving a charter could be subject to regulation from other governmental bodies, including the Federal Reserve, Federal Deposit Insurance Corporation and the Consumer Financial Protection Bureau.

Any company seeking a special purpose national bank charter is expected to have a well-developed business plan setting forth in “significant detail” the bank’s activities. The plan must also cover the governance structure, capital, liquidity, compliance risk management, financial inclusion and recovery and exit strategies.

SLS is well positioned to advise any company seeking a special purpose national bank charter. SLS has experts in every aspect of the application process and years of experience working with regulatory agencies.

The OCC’s proposal is open for comment until January 15th and is expected to receive many comments as the move has been both applauded and criticized in the financial and banking industry. SLS will continue to monitor any developments with the OCC’s announcement.