Penn Secretary of Banking and Securities raises concerns on fintech applications

Pennsylvania Secretary of Banking and Securities Robin L. Wiessmann has issued a comment letter on the concerns about the board application and ambiguity of ‘fintech’.

The three concerns cited by her regarding a special purpose national bank charter for fintech companies that are proposed by the Office of the Comptroller of the Currency (OCC) include lack of fully disclosed details concerning the supervision and examination of fintech companies, the possible federal preemption of existing, and effective state consumer protection laws.

She noted saying, although OCC has pointed out thousands of so-called fintech companies, the agency has not defined the characteristics of a fintech company. She also mentioned that the board over-generalizes the term ‘fintech’ and lend to disorderly dialogue among regulators and between regulators and the companies they supervise.

“Given the uncertainty surrounding which kinds of companies might become eligible for a special purpose national charter, the OCC's proposal could invite companies currently licensed by state regulators to seek a national charter,” she said. “This unintended consequence could effectively preempt and negate many of the most effective consumer protection laws in a number of states, including Pennsylvania.”

Additionally, Wiessmann is concerned about the OCC's lack of clear guidance on how this federal agency will actually examine and supervise this unique class of institutions, while OCC considers extending special non-purpose national charters to fintech companies.