Comptroller of the Currency Thomas Curry believes financialtechnology has a lot of promise, but he cautioned that banks should innovate ina safe and sound manner that minimizes risk.
"Banks have to continuously adapt to prosper, and we,as regulators, have to be knowledgeable enough to understand new technology andnimble enough to render timely decisions on matters requiring regulatoryapproval, as well as guidance about our supervisory expectations," Currysaid in remarks before the Harvard Kennedy School's New Directions in RegulationSeminar on March 31 in Cambridge, Mass.
The OCC released a white paper March 31 that outlines eightways the agency plans to implement fintech regulation, including potentiallyopening a new office dedicated to innovation. The white paperpointed to several steps the agency has taken to encourage financialinnovation, including establishing a dedicated payment systems policy groupthat provides examination support, training, and guidance to examiners and actsas a resource to banks. The OCC has also formed an internal working group onmarketplace lending to monitor developments in that sector.
"At a minimum, we'll want to be sure we have thecapacity to identify and understand new trends and technology, as well as theemerging needs of the consumers of financial products," Curry said aboutthe white paper.
Fintech firms that partner with banks or banks working onfintech should have the same safety and soundness and consumer safeguards inplace as a traditional bank, Curry said. "I would be very concerned, forexample, if we were to authorize a federal license that offers the benefits ofthe national bank charter, including preemption, without any of the safeguardsor responsibilities that apply to banks and thrifts," he said.
The OCC has received its first request for a bank charterfrom a virtual currency firm, Amy Friend, chief counsel at the OCC, at a conference March 10.
The other principles outlined in the OCC white paper includefostering an internal culture receptive to responsible innovation andsupporting and encouraging responsible innovation that provides fair access tofinancial services and fair treatment of consumers. The agency will work to enhancesafe and sound operations through effective risk management, encourage banks ofall sizes to integrate responsible innovation into their strategic planning,and promote ongoing dialogue with banks. The OCC also said it will leverageagency experience and expertise, and collaborate with other regulators such asthe Consumer Financial Protection Bureau.
The OCC is accepting comments on the guidelines until May 31.