New Special Purpose National Bank Charter for FinTech Companies: Evaluating the Benefits and Regulatory Pitfalls

Navigating the Supervisory, Financial and Operational Conditions Attached to the OCC's Bank Charter

Recording of a 90-minute CLE webinar with Q&A


Conducted on Thursday, March 16, 2017
Recorded event now available


This CLE webinar will provide an overview of the OCC’s proposal for special purpose national bank charters for FinTech companies and the potential regulatory pitfalls that potential applicants must consider. The program will address the OCC’s chartering process and the supervisory, financial and operational conditions that would apply.

Description

The OCC has proposed granting special purpose national bank charters to FinTech companies that engage in one of three core banking activities: receiving deposits, paying checks or lending money. The special purpose charter offers the benefits of federal preemption and avoiding some state licensing requirements. However, there are regulatory and supervisory burdens that must be carefully considered such as activity limitations, BSA/AML requirements, minimum capital and liquidity requirements, and the role of other regulators.

Listen as our authoritative panel of banking attorneys discusses the OCC’s proposal for special purpose charters for FinTech companies. The panel will address the OCC’s chartering process and regulatory pitfalls that FinTech companies must consider.

Outline

  1. Overview of OCC framework for special purpose charters
    1. Federal preemption
    2. Preemption of state money transmitter licensing requirements
    3. State and federal consumer protection laws
  2. Supervisory, financial and operational conditions
    1. Potential supervision by the Federal Reserve Board
    2. Membership in the Federal Reserve System
    3. Applicability of the Bank Holding Company Act
    4. Taking deposits
    5. Community Reinvestment Act obligations
    6. Activity limitations
    7. BSA/AML and other requirements
    8. Minimum capital and liquidity requirements
  3. OCC chartering process

Benefits

The panel will review these and other key issues:

  • Benefits of special purpose national bank charters
  • Regulatory pitfalls of special purpose national bank charters
  • The OCC’s chartering process and the supervisory, financial and operational conditions that would apply

Faculty

John L. Douglas, Partner
Davis Polk & Wardwell, Washington, D.C.

Mr. Douglas' practice focuses on bank restructuring and resolutions and other issues arising from the current banking and financial crisis. He has advised the boards of directors of Indymac and Bank United, counseled Citigroup with respect to FDIC matters, and advised various parties on the fallout from the failure of Washington Mutual. He was General Counsel of the FDIC in the late 1980s.

Anthony R.G. Nolan, Partner
K&L Gates, New York

Mr. Nolan is a Practice Area Leader for the firm's global Finance practice. He has a domestic and international practice that emphasizes lending transactions, fixed income securities, structured finance, structured products and derivatives. He often works at the intersection of finance and investment management, including trading and regulation of swaps and security-based swaps, loan trading, securities lending and repo as well as traditional borrowing and leverage transactions. His structured finance experience encompasses cash and synthetic securitizations and covers a wide range of financial assets including commercial loans and loan participations. 

Judith E. Rinearson, Partner
K&L Gates, New York

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 licensing laws and abandoned property laws. She is fully experienced in both the “issuing” and “acquiring” side of the payments business.

Reuben Grinberg
Davis Polk & Wardwell, New York

Mr. Grinberg's practice focuses on bank regulatory advice, including Dodd-Frank Act regulatory implementation, the preparation of the first and second generations of living wills, and financial institution capital markets and M&A transactions. He wrote the first widely read and cited academic paper on Bitcoin, and is often cited in the media as an expert on digital currencies. He advises clients on the novel regulatory issues relating to Bitcoin and digital currency-based businesses.


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