The US Office of the Comptroller of the Currency (OCC) is pursuing a long-term plan to offer domestic bank cards to payment companies that don't accept deposits, but not everyone is thrilled with the initiative.
The new OCC project causes the US to discuss
Acting Comptroller of Currency Brian Brooks will lead the move that would allow payment companies to operate across state borders with a single established set of rules, according to a news report on Tuesday by the news site Politico.
The card would simultaneously allow such companies to expand their financial services offering and avoid having to apply for licensing in each state individually. Brooks said in the Politico interview that the OCC would be ready within a week to begin processing applications for the cards, which could potentially include companies such as Paypal and Coinbase.
Brooks is a former executive at US cryptocurrency exchange Coinbase and served as chief legal officer from September 2018 until his tenure with the OCC, a position he held for three months.
“I can oversee JPMorgan's payment business, but I can't oversee Square's payment business,” Brooks said in the Politico report, referring to Twitter founder Jack Dorsey's payment platform.
"It seems really strange to me." An OCC spokesperson told the media that all card applications would be made public for a short time, but said they are not yet aware of specific applications from payment companies.
The role of the OCC is to regulate, supervise, and provide a charter for national banks and federal savings associations operating in the United States. Brooks said the OCC is "satisfied" that it does not need a new regulation or statute to move forward with its decision.
The discontent of traditional institutions
According to the Politico report, the news sparked outrage among traditional banks, credit unions and other institutions. "A few months into his service, a banking regulator (and former crypto industry advocate) is pursuing a legally questionable plan to provide bank cards to tech companies," tweeted Graham Steele, director of the Corporations and Society Initiative at Stanford. Graduate School of Business.
The New York Department of Financial Services (NYDFS) has already won the backing of a judge in blocking the OCC's plan for a "Fintech Charter" in the state (first proposed in 2016).
Linda Lacewell, superintendent of the NYDFS, retweeted Steele's comment and stressed that the OCC's appeal to the ruling has yet to take place. US states believe the OCC is moving out of its mandate in offering the new charter, said Margaret Liu, deputy general counsel at the Conference of State Banking Supervisors. These issues have not deterred Brooks, who told Politico that he sees the OCC's role more as a regulator of services than as an agency.
