On April 30, 2019, the Office of the Comptroller of the Currency (“OCC”) opened a 45-day public comment period on a proposed Innovation Pilot Program (the “Program”).[1] The Program is designed to provide early-stage regulatory input to eligible entities – primarily, national banks – testing innovative financial activities.


In recent years, certain federal and state agencies – as well as international financial authorities – have established regulatory “sandboxes” to enable controlled involvement with financial technology firms. The goal of sandboxes is to develop new solutions and enhance risk management for regulators, banks, and nonbank participants before market implementation. As a leading voice among banking regulators, the OCC continues to explore ways to provide supervisory support to responsible financial innovation – such as the Program.

The Innovation Pilot Program

Since October 2016, the OCC’s Office of Innovation has served as a central point of contact for banks, nonbanks, and other interested parties and as a clearinghouse for innovation-related matters.[2] The Office of Innovation has developed the Program to build on the OCC’s innovation initiatives. The Program’s objectives are:

  • to support responsible innovation within the U.S. federal banking system;
  • to offer timely engagement between the OCC and eligible entities;
  • to further the OCC’s understanding of, and ability to supervise, innovative activities
  • to foster development of controls and safeguards; and
  • to promote OCC policy objectives while avoiding unintentional and unnecessary inhibition of responsible innovation. [3]

Eligibility for the Program and Expressions of Interest

Program eligibility is limited to OCC-supervised financial institutions (i.e., national banks). The Program’s key benefit is direct and cooperative early-stage review by OCC experts of innovative financial technology proposals in a controlled environment. National banks may propose a pilot individually, as a joint effort with multiple banks, or in conjunction with a third party. Proposals must demonstrate both how OCC involvement in the pilot is appropriate and how the proposed activity serves selected Program purposes.[4] Third parties may not submit proposals on their own.

Before submitting an expression of interest for the Program (“EOI”), eligible entities should have a preliminary discussion with the OCC. EOIs will be evaluated on whether the entity is capable and prepared to execute the proposed pilot, as well as safety and soundness implications, consumer impact, legal and regulatory compliance, and other suitability factors (subject to OCC discretion). Participants should note that, while the OCC will maintain the confidentiality of proprietary information, including participant identity (to the extent permitted by law), the OCC intends to develop publicly available materials based on the Program.[5]

Public Comments on the Program

The OCC seeks feedback from stakeholders (e.g., banks and financial technology firms) on all aspects of the Program. The OCC has provided the following six questions for consideration:

  1. As a supplement to existing agency processes, will the Program provide additional value?
  2. Are the eligibility criteria and evaluation process appropriate for an effective Program? Why or why not?
  3. Are the general Program parameters appropriate? Why or why not?
  4. What may be the preferred nature of regulatory engagement through this Program?
  5. What type of innovative activities would be best served through this Program?
  6. Are there other suggestions or feedback as to how the Program should work?

Comments and responses to the questions should be submitted to the OCC at pilotprogram@occ.treas.gov, no later than June 14, 2019. After the comments have been reviewed, the OCC will consider further refinements to the Program and announce the effective date of the Program.

As with any public comment solicitation, well-crafted responses have the potential to inform the OCC’s deliberations on the final version of the Program. We recommend that banks and financial technology firms review the Program materials to consider potential implications. Additional information about the Program – including a set of “Frequently Asked Questions” prepared by OCC staff – are available at the OCC’s website.[6]