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The OCC's ANPR on Digital Banking: Is This a Harbinger for Digital and Open Banking in the US?

The office of the Comptroller of the Currency (OCCissued an Advance Notice of Proposed Rulemaking (ANPR) on June 3, 2020, focusing on digital banking activities. Typically such ANPRs are a precursor to new federal regulation; following collection of data from the industry and other interested parties, the OCC may propose new regulations by issuing a Notice of Proposed Rulemaking within 6-12 months.  Responses to the ANPR are due on August 3, 2020.

The timing of this ANPR appears to be fortuitous. As the world reels from the impact of a global pandemic, it has become increasingly clear that digital banking solutions are more important than ever. Not only has there been an increase in interest in contactless payments, but the ability of banks to work with technology companies through “open banking” mechanisms, and the movement of funds using cryptocurrencies and/or stablecoins has also gained momentum.  

Although some have argued that the US lags behind its European counterparts when it comes to open and digital banking, the OCC’s issuance of the ANPR might indicate a significant change in perspective regarding the transforming digital landscape from US banking regulatory agencies. Although these are early days, it is notable that the data the OCC is seeking includes:

  • Whether current legal standards are flexible enough in light of recent technological advances;

  • Whether current legal standards create unnecessary hurdles or burdens to innovation by banks;

  • How artificial intelligence and machine learning techniques can be used in banking activities;

  • How distributed ledger technology can be used in banking related activities;

  • What barriers exist with respect to banking activities related to cryptocurrencies or crypto assets;  and

  • What are the issues impacting smaller financial institutions regarding the implementation of innovative products and services.

Many believe that this is an important first step for US banking regulators as the US banking system looks to the future. It is similarly important that other bank regulators, such as the FDIC, the Federal Reserve Board of Governors, and State Banking Departments also consider these important issues, and better yet, coordinate their activities to create a sensible, but rigorous regulatory platform for the next century.

Copyright 2020 K & L GatesNational Law Review, Volume X, Number 171



About this Author

Judith E. Rinearson, KL Gates, federal consumer protection lawyer, anti money laundering attorney

Judith Rinearson is a partner in the firm’s New York and London offices. Ms. Rinearson concentrates her practice in prepaid and emerging payment systems, electronic payments, crypto/virtual currencies, reward programs, ACH and check processing. She has more than 25 years of experience in the financial services industry, including 18 years at American Express’s General Counsel’s Office. Her expertise focuses particularly in the areas of emerging payments and compliance with state and federal consumer protection laws, anti-money laundering laws, state money transmitter...


John ReVeal is a partner in the firm’s Washington, D.C. office and a member of the consumer financial services practice group. He advises banks and other financial services providers on consumer compliance and assists financial institutions in the review and development of Bank Secrecy Act and Anti-Money Laundering programs.

In addition, Mr. ReVeal advises financial institutions regarding bank and thrift powers, federal preemption, exportation of rates and charges, and financial institution licensing.

Stanley Raglavesky, Financial Services, KL Gates Law Firm

Mr. Ragalevsky deals with the business and regulatory issues of financial institutions – capital adequacy, safety and soundness, corporate governance, holding companies, third party outsourcing and collaborations, mergers, executive employment and compensation, comprehensive management system, loan and investment issues, examination problems, bank policies, risk management issues, succession planning, financial institution insolvencies and regulatory enforcement orders. He has extensive experience in lending powers issues, loan participations, problem loans and loan workouts.