Posts Tagged ‘OCC’

OCC’s Remarks on Fintech Charter and a “Conversation about Financial Innovation and Fintech”

Today, Keith A. Noreika, Acting Comptroller of the Currency gave remarks encompassing the topic of Responsible Financial Innovation and Fintech Companies.

2015-11-14 13.57.51You can read Mr. Noreika’s remarks here.

All the excitement surrounding fintech companies reminds me of something that gets me excited – college football, particularly Michigan State Spartan Football (thus, a photo from one of my past experiences at Spartan Stadium)


Back to Fintech, by way of recap…

The prior OCC, Thomas Curry announced earlier this year that OCC would move forward with considering applications from financial technology (fintech) companies to become special purpose national banks.


Mr. Curry had this to say, in the past:

“Over the past year, no topic in banking and finance has drawn more interest than innovative financial technology, and for good reason. The number of fintech companies in the United States and United Kingdom has ballooned to more than 4,000, and in just five years investment in this sector has grown from $1.8 billion to $24 billion worldwide.


“The OCC published a paper discussing the issues and conditions that
the agency will consider in granting special purpose national bank charters.” You can check that paper out here


Fintech Charter: Praise, Debate, and a Lawsuit.

The propriety of a Fintech charter has been supported by the Fintech community in general.


As reported by Crowdfund InsiderBrian Peters, Executive Director of Financial Innovation Now  “a public policy coalition comprised of Amazon, Apple, Google, Intuit and PayPal” stated;

“FIN believes that payments and lending regulation needs streamlining for the modern era. We commend the

OCC’s leadership and vision in driving this regulatory discussion. The OCC has rightly concluded that its approach must evolve to ensure that all American consumers and small businesses are empowered with better access to the benefits of financial technology.”

According to Crowdfund Insider  “Fintech Charter could benefit innovative financial firms that can provide superior services at a lower cost for both consumers and businesses.”



That being said, the propriety of such action by the OCC has been questioned by others, and officially sued by the Conference of State Bank Supervisors as an “unprecedented, unlawful expansion of the chartering authority”- check out the Press Release from the CSBS back in April.



The OCC’s present Stance on a Fintech Charter

It appears no action will be taken until at least the lawsuit is resolved.

Mr. Noreika stated today that “at this point, the OCC has not determined whether it will actually accept or act upon applications from nondepository fintech companies for special purpose national bank charters that rely on this regulation. And, to be clear, we have not received, nor are we evaluating, any such applications from nondepository fintech companies.

Still, Mr. Noreika expressed his thoughts on the need for a fintech charter:

“I also believe that if you provide banking products and services, acting like a bank, you ought to be regulated and supervised like a bank. It is only fair, but today, that is not happening. Hundreds of fintechs presently compete against banks without the rigorous oversight and requirements facing national banks and federal savings associations.”


Why Fintech Intrigues me – Purpose Driven.

I’ve previously talked about why fintech is so intriguing.

a. taking a risk doing something different;

b. disrupting business as usual;

c. for the good of others.

That’s social entrepreneurship at its finest.


Questions? Comments?


Twitter: @JeshuaTLauka

Fintech Update: Disruption for Good. The OCC’s Remarks Yesterday to Fintech Innovators at LendIt USA in New York

Yesterday, 2015-11-26-13-04-02Thomas J. Curry, Comptroller of the Currency gave remarks about Fintech Innovation at LendIT USA (The Worlds Biggest Show in Lending and Fintech) Conference in New York. You can read Mr. Curry’s remarks here.

Mr. Curry praised the innovative Fintech Companies who “have fueled healthy competition to modernize and improve how the nation’s financial services needs are met.

What I personally like is Mr. Curry’s emphasis on the opportunity Fintech has to reach the vulnerable in our communities.

According to Mr. Curry:

” Financial inclusion…brings those who are unbanked and underbanked into the fold, and too many of those individuals are concentrated in low- and moderate-income communities that are often the most vulnerable to financial difficulty and predatory practices.”

“What’s encouraging about (Fintech)is that there’s good data from the FDIC and others that suggest these communities that have been left out of the traditional system have higher adoption rates for new services that capitalize on emerging and mobile technologies”



Check out the article by Crowdfund Insider  reporting on Curry’s address: “We Will Be Issuing Charters to Fintech Companies


Why Fintech Intrigues me – Purpose Driven.

I’ve previously talked about why fintech is so intriguing.

a. taking a risk doing something different;

b. disrupting business as usual;

c. for the good of others.

That’s social entrepreneurship at its finest.

Given the hot water that big banks continue to find themselves in, it isn’t surprising that a consumer friendly alternative is attractive, particularly to the vulnerable communities.

Questions? Comments?


Twitter: @JeshuaTLauka

Big Bank Troubles and Trending Towards Community Banking or Fintech?

November 17, 2016 2 comments

“The so-called Sons and Daughters Program was nothing more than bribery by another name,”

-Assistant Attorney General Caldwell.

Today the Department of Justice issued a Press Release – JP Morgan’s Investment Bank in Hong Kong has agreed to pay a $72 Million Penalty for Corrupt Hiring S2015-11-26-13-04-02cheme in China.


A couple of thoughts:

1. The Department of Justice is out there holding Big Banks Accountable. 

Someone has to. It’s not going to be the average consumer, (Wells Fargo appears to be an exception). It’s also not going to be the small business owner taking out a construction loan. Big Banks have the leverage.

2. Local Community Banks are More Appealing Than Big Banks.

Consumers and businesses alike are looking for banks they can trust. From my perspective, as a lawyer and an adviser to business owners – I am only interested in referring my clients to professionals that I trust.

Looking at the news headlines, an average individual or small business owner might conclude that they need a local banking relationship they can trust.

In West Michigan there are a lot of good local community banks. I know good commercial lenders who care about their business clients.

Does this mean that big banks are going away? Nope.

As its been said – some of the largest banks are simply able t
o offer better deals at lower risks.

Regardless, the headlines certainly give you pause to think.

On the Topic of the value of Community Banks…

Last year Thomas J. Curry, Comptroller of the Currency gave remarks before the ABA Mutual Community Bank Conference in Washington D.C. You can read the remarks here

Mr. Curry had this to say in favor of community-based banks:

“These community-based institutions extend credit to farms and families and local businesses in towns and cities across America, and they serve their customers in a way that large banks just can’t match. They are small enough to be able to know their customers, and they work with them in good times and bad. But they are also large enough to provide the services communities need. Mutual savings associations fit firmly in that tradition”

In further support:

“You are free to do what is best for your customers, and that means you provide services and price those services in a way that puts people first – ahead of quarterly profit targets and ahead of investor interests.”

Those are pretty glowing remarks for community-based lenders.

They are certainly attributes I like to see when I am referring any of my business clients to a commercial lender – particularly a start-up entrepreneurial type client.

Mr. Curry also commented that “big banks”:

“offer a variety of important services to companies and consumers, from commercial loans to credit cards, and they present a number of challenges from a supervisory perspective.” 

I’d say the “supervisory challenge” was an understatement.


FinTech Poses Challenges to Community Banking…

[UPDATED] Just today, November 18, Mr. Curry gave remarks before the 11th Annual Community Bank Symposium.  You can read the remarks here.

Mr. Curry notes: “One particular issue testing banks’ strategic risk today is the tectonic shift underway regarding innovation and financial technology.

fintechs have emerged to provide financial products and services through alternative platforms and delivery channels. As of 2015, the number of fintech companies in just the United States and United Kingdom alone had reached 4,000.

Mr. Curry notes:

“One factor in the growth of fintech companies is the 85 million millennials entering the financial marketplace who have demonstrated more willingness than earlier generations to change financial service providers or use multiple providers to meet their needs.”

It’s interesting to note the Trend away from Big Banks – and now to Fintech.

Certainly, millennials will continue to play a large role in the growth of fintech companies like Prosper Loans. Coupled this with the fact that millennials are increasingly attracted to business that does social good – fintech appears to have an advantage with millennials.

Questions? Comments? 


Twitter: @JeshuaTLauka

Questions? Comments? 


Twitter: @JeshuaTLauka