Financial Institutions

Partner Jeffrey Alberts, head of Pryor Cashman’s White Collar Defense + Investigations practice, recently spoke with The National Law Journal for an article examining the Office of the Comptroller of the Currency’s (“OCC”) announcement that it will move forward with its proposal to grant special purpose national bank charters to fintech companies. 

While access to national bank charters would free fintech companies from the often cumbersome – and costly – burden of having to apply for state-by-state banking licenses, the OCC’s proposal will also create new compliance responsibilities.

For example, the OCC has stated that companies will need to demonstrate strong capital, a solid governance structure, and provide a detailed account of their banking activities and forecasts of market demand, among other things.

Alberts told the NYLJ that many fintech enterprises may not be accustomed to the enhanced supervisory standards they will need to adopt should they pursue a national charter: “I think that will be a difficult thing for lots of fintech companies to do because they haven't had to think about it except for the purposes of satisfying their own investors.” 

Additionally, Alberts cautioned that smaller companies “may have trouble complying with requirements, such as having the requisite business plans and certifying they meet liquidity and capitalization requirements.”

To read the full New York Law Journal article, please click here.

More About Pryor Cashman’s FinTech Practice

Pryor Cashman’s FinTech Group advises established companies, startups and entrepreneurs from the rapidly-developing financial technology sector on a wide range of complex regulatory, enforcement, infrastructure and business issues.

Our clients hail from diverse areas of fintech including virtual currency, prepaid card banking, peer-to-peer lending and crowdfunding, among many others.

To learn more about our work in this area, please visit here.