The Office of the Comptroller of the Currency has announced that it will begin accepting applications for Special Purpose National Bank (SPNB) charters from companies (especially fintech companies) that seek to engage in the  business of banking, other than taking deposits. In a July 31 policy statement, Comptroller Joseph Otting said the new policy aims to provide industry innovators the same opportunity to obtain a charter as companies providing banking services through more traditional means, while adhering to the same high standards. The statement also asserts OCC's statutory authority under the National Banking Act to grant the charters – which some state banking regulators have challenged in court, thus far unsuccessfully.  It remains to be seen how attractive the SPNB charter will be to fintechs. Otting emphasized that fintech companies that receive SPNB charters will be supervised like  traditional national banks.  Likewise, an accompanying Comptroller's Licensing Manual Supplement that details the application process for a SPNB charter indicates that the two most significant differences from the application process for a traditional national bank charter are that (1) SPNB applicants will not have to obtain deposit insurance (because they cannot take deposits) and (2) the OCC will take into consideration that SPNB applicants are likely to have a different funding model and risk profile than applicants for a traditional national bank charter.  Other than those relatively minor concessions, applicants for a SPNB charter are going to be subject to the full range of OCC expectations with respect to such issues as business plans, management expertise, governance, internal controls, risk management processes, capital and liquidity planning and management, contingency plans and resiliency, AML/KYC/BSA, IT resiliency, data security, compliance programs, internal auditing, operational risk management, financial inclusion and OCC examinations.   Further, new SPNBs will initially be subject to heightened supervision, just as traditional de novo national banks are.  It is likely that only the largest and most mature fintech companies will have the resources and infrastructure necessary to obtain an SPNB charter and then consistently satisfy on-going OCC examinations.  

  • "Companies that provide banking services in innovative ways deserve the opportunity to pursue that business on a national scale as a federally chartered, regulated bank," Otting stated.
  • But OCC's action came under criticism from the senior Democrat on the House Financial Services Committee, Representative Maxine Waters (D-CA), who said sufficient stakeholder deliberation was not provided, questioned OCC's legal authority to make the move, and expressed concern that "these new fintech charters would be subject to weaker requirements for community reinvestment compared to the OCC's 2016 proposal."
  • In an August 5 report, the ratings agency Moody's stated, "We believe the OCC's charter standards are challenging and will likely dissuade applicants."