September 25, 2018

September 25, 2018

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September 24, 2018

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Comptroller Otting: A New Ally for a FinTech Charter?

The FinTech charter may have an important new, if tepid, ally: U.S. Comptroller of the Currency Joseph Otting. Speaking at a press conference on December 20th, Comptroller Otting signaled a cautious openness to the charter, stating, according to various media outlets, that although he is “not sure what it [FinTech charter] looks like and how it’s funded…there’s a space there that a technology solution can solve.” The key question to him is “what is the requirement…to get that charter”, a topic on which he did not elaborate.

According to the press, Comptroller Otting stated that the FinTech charter bears special importance on the small-dollar lending market. He reportedly stated that FinTech finance companies are focusing on that market in particular due to its “unfulfilled” “large volume,” and asked rhetorically whether federal banking regulations have helped create the situation by “forc[ing] banks out” of the small-dollar market.

The reticence of banks to meet the small dollar market’s need, raises the possibility that federal regulation is discouraging them from implementing FinTech solutions. Given this dynamic, he reportedly stated that there is “a need to get it [small-dollar lending] back in the banking system.” Ideally, Comptroller Otting hopes that banks will resolve this problem by establishing their own “fintech models” so they can service the small-dollar market. However, he is reportedly “open to other entities… providing those services if they’re not being provided by the banking industry.” If the banking system continues to underserve the small-dollar market, Comptroller Otting’s reported support for the FinTech charter may grow.

Copyright 2018 K & L Gates

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About this Author

Daniel Cohen, KL Gates Law Firm, Washington DC, Finance Law Attorney
Associate

Daniel Cohen is a first year associate in the Washington, D.C. office.

Admitted only in Virginia / Not Admitted in D.C.
Supervised by Soyong Cho, member of D.C. Bar

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