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OCC moves ahead with proposed payments charter – Politico


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OCC moves ahead with proposed payments charter – Politico

The Office of the Comptroller of the Currency said it will be ready as soon as Sept. 1 to begin processing applications for national charters from payment companies, Politico reported.

The charter would allow payments companies, such as PayPal, and cryptocurrency exchanges, such as Coinbase, to operate across state lines under a single set of rules as well as expand the financial services they offer.

Acting Comptroller of the Currency Brian Brooks, who formerly worked for Coinbase, told Politico that the OCC does not need regulation or a new statute for it to offer the charter.

In a July 29 letter to the OCC, bank trade associations expressed their concerns over a "narrow-purpose payments charter," stressing that the OCC should undertake a transparent process in considering new charters and that it should ensure that the type of oversight applied to bank holding companies is also applied to fintech companies that receive charters.

Brooks said in response to the letter that the decision-making process on financial technology company charters will remain transparent.

Bryan Hubbard, deputy comptroller for public affairs, said in a statement that the OCC's existing processes for licensing and supervising payment companies are sufficiently robust to consider applications related to that core banking activity.

"Those processes for licensing and supervising banks apply to full-service banks and statutorily authorized uninsured national trust banks engaged in payments as well as other potential applicants engaged in any combination of the core functions of banking — taking insured deposits, lending money, or paying checks," Hubbard said.

The OCC was dealt a blow in October 2019 when a judge for the U.S. District Court for the Southern District of New York ruled that the OCC cannot issue bank charters to institutions that do not take deposits.

Brooks told Politico that the district court ruling does not apply nationally and that the OCC is appealing that decision.