Washington, D.C. (July 31, 2020) — The Independent Community Bankers of America (ICBA) filed a friend-of-the-court brief supporting the New York Department of Financial Services lawsuit challenging the Office of the Comptroller of the Currency's special-purpose national bank charter for fintech companies.
"The Office of the Comptroller of the Currency’s proposed special-purpose fintech charter lacks not only sufficient oversight of nonbank tech firms, but also a legal basis for its implementation," ICBA President and CEO Rebeca Romero Rainey said today. "If the OCC wishes to create a special-purpose fintech charter, it should obtain statutory authority from Congress to ensure it proceeds on a sound legal footing."
In the amicus brief, ICBA said the National Bank Act was enacted to transform a fragmented system of local currencies into a single, uniform currency. The OCC was created to charter and supervise national banks to facilitate the establishment of a national currency.
Because taking deposits was a central banking function necessary for fulfilling the purpose of national banks, the National Bank Act does not authorize the OCC to charter special-purpose national banks that don’t take deposits. Therefore, the OCC’s policy of chartering nonbanks is inconsistent with the purpose of the National Bank Act and its statutory provisions.
Further, ICBA said, the OCC is not eligible in this case for the "Chevron doctrine," which grants considerable rulemaking discretion to regulatory agencies, because its policy is a radical departure from 160 years of National Bank Act interpretation and does not serve the purposes of the law. ICBA's brief follows a federal judge's October 2019 ruling that the OCC lacks the authority to grant bank charters to non-depositories, which the OCC is appealing.
ICBA will continue working to ensure any new chartered institution should be subject to the same supervision and regulation required of community banks.
The Independent Community Bankers of America® creates and promotes an environment where community banks flourish. With more than 50,000 locations nationwide, community banks constitute 99 percent of all banks, employ nearly 750,000 Americans and are the only physical banking presence in one in three U.S. counties. Holding more than $5 trillion in assets, nearly $4 trillion in deposits, and more than $3.4 trillion in loans to consumers, small businesses and the agricultural community, community banks channel local deposits into the Main Streets and neighborhoods they serve, spurring job creation, fostering innovation and fueling their customers’ dreams in communities throughout America. For more information, visit ICBA’s website at www.icba.org.
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