The United States Office of the Comptroller of the Currency (OCC) is pushing forward with a its plan to offer national banking charters to payment firms that don’t take deposits, which could fundamentally alter what a US bank looks like.
Despite previous opposition from incumbent banking providers and state regulators, Acting Comptroller Brian Brooks is optimistic, saying:
We’ve satisfied ourselves that we don’t need a new regulation or a new statute on it,
If allowed to proceed, the charter could facilitate entities like PayPal or cryptocurrency exchanges like Coinbase, (Brooks' former employer) direct access to the U.S. payments rails. This would provide the ability to transfer money without going through a bank. In comments to Politico, Greg Baer, president and CEO of the Bank Policy Institute, which represents big banks, said:
If you take the position that you don’t have to be a deposit taker, it’s difficult to understand what the limiting principle would be, whereby not only a PayPal could be a national bank but any company in America could be a national bank
The reception to the move has ranged from lukewarm, to outright cold. Industry darling Caitlin Long commented expressing her scepticism about the charter's prospects, saying:
Lawsuits will be filed by states as soon as the OCC grants a new charter that it's not legally authorized to grant, which will tie it up for years in expensive litigation. New types of bank charters need legislative authorization, rules & a supervisory manual--will be years before this could be real, either via potential Congressional authorization or outcome of a lengthy court battle with states.
She's not the only one, with Graham Steele, director of the Corporations and Society Initiative at Stanford Graduate School of Business tweeting:
A few months into his service in an acting capacity, a bank regulator (and former cryptocurrency lawyer) pushes ahead with a legally dubious plan to give tech companies banking charters
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