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2016 Press Releases
Idaho Department of Finance Earns Banking Supervision Re-accreditation
California and Missouri Begin Using Uniform Mortgage Test; 50 State Agencies Now Using the Test
North Dakota Department of Financial Institutions Receives Certificate of Mortgage Accreditation
CSBS Names Jim Kurtzke Vice President of Communications
CSBS Announces 2016 Community Bank Case Study Competition Participants
SRR Releases 2015 Annual Report
Colorado Begins Using Uniform Mortgage Test; 51 State Agencies Now Using the Test
Gonzales Appointed to FFIEC State Liaison Committee
Scott Corscadden Named New NMLS Ombudsman
FFIEC Seeks Comments on Proposed Revisions
Financial Regulators Release New Appendix for Retail Payment Systems Booklet
Face Appointed to FFIEC State Liaison Committee
Lawson Elected as State Liaison Committee Chairman
Multi-State Non-Bank Supervision Groups Release Annual Reports
CSBS Releases 2015 Annual Report
12 Student Teams Named Finalists in 2016 Community Bank Case Study Competition
CSBS and MTRA Issue White Paper on State Supervision of MSBs
CSBS Announces New Leadership
Texas Department of Savings and Mortgage Lending Receives Mortgage Reaccreditation
CSBS Announces Winners of the 2016 Community Bank Case Study Competition
CSBS Chairman Challenges State and Federal Regulators to Work Together
Illinois Begins Using Uniform Mortgage Test; 52 State Agencies Now Using the Test
West Virginia Department of Financial Institutions Receives Banking Reaccreditation
FFIEC Issues Statement on Safeguarding the Cybersecurity of Interbank Messaging and Payment Networks
Statement on the Financial CHOICE Act
Statement on Introduction of the Bank Service Company Examination Coordination Act
New Call Report to Streamline Supervision of Money Services Businesses
Fed/CSBS 2016 Community Banking Research Conference to Be Held Sept. 28-29
FFIEC Invites Public Comment on Streamlined "Call Report" for Smaller Institutions
Fed/CSBS Announce Papers Selected for the 2016 Community Banking Research Conference
Financial Regulators Release Revised Information Security Booklet
White Paper Discusses Opportunities for Community Banks to Collaborate
NMLS Launches New Capabilities to Streamline State Licensing Processes
North Carolina Commissioner Ray Grace Appointed
CSBS Releases Second Quarter NMLS
Federal Financial Institutions Examination Council Announces Availability of 2015 Data on Mortgage Lending
Federal Reserve and CSBS Release Findings from 2016 National Survey of Community Banks
Washington Department of Financial Institutions Earns Bank, Mortgage Accreditation
CSBS-Federal Reserve Research Conference Describes the Value and Business Prospects of Community Banks
FFIEC Announces Webinars in Observance of Cybersecurity Awareness Month
Maryland Office of the Commissioner of Financial Regulation Receives Accreditation of Mortgage Supervision Program
CSBS Names Tom Bayer Executive Vice President and Chief Information Officer
FFIEC Issues Frequently Asked Questions Guide on the Cybersecurity Assessment Tool
Third Annual “Your License is Your Business Campaign” Launches Today
CSBS Releases Map of State Requirements for Opening Bank Accounts for Minors
FFIEC Issues Uniform Interagency Consumer Compliance Rating System
State Regulators Oppose OCC Fintech Charter
State Regulatory Group Announces New Cyber Certification Program for Bank Examiners
Statement by the Conference of State Bank Supervisors on Comptroller’s Announcement of New Federal Charters
2017 NMLS Renewal Campaign “Your License is Your Business” Off to Strong Start
FFIEC Streamlines “Call Report” for Small Institutions
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Media Release

Conference of State Bank Supervisors
        1129 20th Street, NW, 9th Floor, Washington, DC, 20036

 State Regulators Oppose OCC Fintech Charter  

Washington, D.C. – A lack of statutory authority, history of preempting state consumer protection laws, and an approach that would distort the marketplace demonstrate why the Office of the Comptroller of the Currency (OCC) should not create a new federal charter for financial technology firms. These are among the formal comments submitted by the Conference of State Bank Supervisors (CSBS) in response to the OCC’s proposed rulemaking on receiverships for uninsured national banks. State regulators interpret the proposed rule as the next step in the OCC’s desire to issue a formal charter proposal.

On behalf of financial regulators in all states and U.S. territories, John W. Ryan, president and chief executive officer at CSBS, said: “Rather than adapting our financial system to the possibilities enabled by technology, the OCC would put a stop sign on innovation through a regulatory regime that favors the entrenched over the emerging, circumvents consumer protection, and weakens the dual banking system. Also, since Congress clearly limited the OCC’s chartering authority, only Congress can expand it.”

Among the key points CSBS makes in its comment letter:

OCC actions would likely distort the marketplace. A federal fintech charter would centralize authority for perhaps all non-depository activities within a single regulator. Inevitability, the rules of that regulator would benefit some to the exclusion of others, possibly create the conditions for regulatory capture, and stifle innovation among smaller, less established players. “Put simply,” CSBS noted, “the creation of a federal charter for fintech or other non-banking companies would put the OCC in a position of picking winners and losers…to the general detriment of customers and innovative financial service providers.”

The OCC has a history of preempting state consumer protection laws. During the early 2000s, many states adopted laws and brought enforcement actions to stop predatory lending. “Nevertheless,” CSBS explained, “the OCC promptly preempted the application of state anti-predatory lending laws to national banks and their operating subsidiaries, thereby permitting unsafe and abusive lending practices to flourish in the lead up to the [U.S.] financial crisis.” It later required congressional action to reset the balance between state and federal regulation in consumer protection.

The OCC lacks statutory authority. The OCC exceeds its mandate by claiming authority to create a charter for fintech firms that only perform non-depository functions, such as lending or paying checks. “As several provisions of the [National Bank Act] make clear, the OCC may not issue a general purpose national bank charter to an institution unless that institution intends to engage in the ‘business of banking,’ including deposit taking,” CSBS wrote. Further, the special purpose charter envisioned by the OCC would represent “a type of charter without precedent in the national banking system.”

State regulation enables innovators. States support innovation through a choice in regulatory regimes and “a state-based licensing structure (which) benefits financial service providers by precluding large, entrenched incumbents from capturing the licensing process so as to exclude new, innovative entrants.” More broadly, “CSBS and its members recognize the value flowing from the intersection of innovation and financial services – value that enables existing and new companies to potentially better serve their customers. This convergence also presents risks – risks for customers and for the larger marketplace.” State regulators, who oversee three-fourths of all U.S. banks and a wide range of non-depositories, are in the best position to balance and manage these outcomes, because they have a unique mandate -- ensuring safety and soundness, consumer protection, and local economic health – which requires them to do so.

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