Milbank Financial Institutions Regulatory partner Douglas Landy, was recently quoted in a Thomson Reuters article that discusses the Office of the Comptroller of Currency’s (OCC) recent announcement that the OCC was still not ready to accept applications from fintech companies seeking a special purpose federal charter. The article also discusses how unlike some foreign regulators, the OCC did not consider the idea of creating regulatory “sandboxes” for fintech firms which would give such companies greater flexibility and allow them to operate with fewer regulatory restrictions.
Mr. Landy comments, “Former (OCC) comptroller (Thomas) Curry was very straightforward in saying that he didn’t have authority to create a sandbox.” He continues, “He was very clear that they were going to base the application standards on what banks have to do and then subtract and adjust them based on what a particular company was doing.”
Mr. Landy adds, “For the OCC to have greater flexibility in dealing with the fintech world, Congress would need to act.” “It doesn’t mean innovation is a bad thing,” said Landy, “It just means we’ve reached the limit of what the OCC can provide under federal law … I think it’s unrealistic for a regulator to change the playing field without Congress authorizing them to do so.”
