New Special Purpose National Bank Charter for FinTech Companies: Evaluating the Benefits and Regulatory Pitfalls

The OCC has proposed granting special purpose national bank charters to FinTech companies that engage in one of three core banking activities: receiving deposits, paying checks or lending money. The special purpose charter offers the benefits of federal preemption and avoiding some state licensing requirements. However, there are regulatory and supervisory burdens that must be carefully considered such as activity limitations, BSA/AML requirements, minimum capital and liquidity requirements, and the role of other regulators.

Listen as our authoritative panel of banking attorneys discusses the OCC’s proposal for special purpose charters for FinTech companies. The panel will address the OCC’s chartering process and regulatory pitfalls that FinTech companies must consider.

1. Overview of OCC framework for special purpose charters
   1. Federal preemption
   2. Preemption of state money transmitter licensing requirements
   3. State and federal consumer protection laws
2. Supervisory, financial and operational conditions
   1. Potential supervision by the Federal Reserve Board
   2. Membership in the Federal Reserve System
   3. Applicability of the Bank Holding Company Act
   4. Taking deposits
   5. Community Reinvestment Act obligations
   6. Activity limitations
   7. BSA/AML and other requirements
   8. Minimum capital and liquidity requirements
3. OCC chartering process

The panel will review these and other key issues:

• Benefits of special purpose national bank charters
• Regulatory pitfalls of special purpose national bank charters
• The OCC’s chartering process and the supervisory, financial and operational conditions that would apply