Today, in response to the U.S. Department of Treasury’s regulatory report on financial technology (fintech) and the Office of the Comptroller of the Currency’s (OCC) announcement that it will accept applications for national bank charters from fintech companies, Congresswoman Maxine Waters (D-CA), Ranking Member of the House Committee on Financial Services, made the following statement:
“I am deeply concerned by the OCC’s announcement that it will begin accepting applications for national bank charters from fintech companies. As Americans are banking and accessing credit in new ways, it is important that we encourage responsible innovation with the appropriate safeguards in place to protect consumers and without displacing traditional banking institutions. I have great hopes that fintech firms can open up opportunities for those who have been excluded from access to responsible credit, but I strongly believe that there must be adequate protections for consumers, and that abusive payday lending practices must not be allowed.
“Unfortunately, the OCC provided little opportunity for stakeholder deliberation on this new charter regime. Stakeholder input is very important given the questions that have been raised about the OCC's legal authority in this area. I am especially troubled that these new fintech charters would be subject to weaker requirements for community reinvestment compared to the OCC’s 2016 proposal. This action could allow online payday lenders to use a federal charter to skirt state usury laws and evade responsibility to reinvest in the communities where they are operating. This support for payday lenders comes as no surprise in light of the Treasury Department's new deregulation report, which explicitly recommends that the Consumer Financial Protection Bureau should rescind its payday lending rule.
“America's consumers deserve better and I will be closely monitoring the charter process as it unfolds.”