Elizabeth J. Upton
86 Geo. Wash. L. Rev. 1392
The Office of the Comptroller of the Currency is responsible for ensuring federally chartered banks’ safety and soundness, compliance with federal banking laws, and compliance with federal laws regarding fair access to financial services and fair treatment of customers. The states have historically overseen and regulated nonbank companies, including nonbank financial services providers like money transmitters, mortgage lenders, consumer lenders, and debt collectors. Applicable regulations include state safety and soundness requirements and both state and federal consumer protection and anti–money laundering laws. In 2016, the OCC announced its intention to create a new national bank charter for nonbank companies, thus pulling chartered nonbank fintech companies into the national bank regulatory system. This will potentially preempt and replace the licensing, regulation, and supervision responsibilities of state authorities while allowing circumvention of other regulatory safeguards. Moreover, this power grab by the OCC is beyond its authority as delegated by Congress. In addition to questions of the legality of the charters and whether state or federal regulators are better situated to regulate such institutions, the proposed charters raise significant concerns regarding the separation of commerce and banking that has been a hallmark of the U.S. financial regulatory system since the founding of the country.
