The Fintech Charter: The Future or Failure?

Traditional banks and state-level bank regulators oppose efforts to allow fintech companies to offer banking products.

Boston, May 9, 2019 – Nonbank financial technology companies in the U.S. are unable to deliver a complete offering to their customers because some products can only be offered by regulated banks. But the Office of the Comptroller of the Currency recently created a charter—the special purpose national bank charter, known as the “fintech charter”—specifically designed for nonbank organizations that require national reach. This potential breakthrough could change the playing field for fintech companies, but banks see it as a threat, and the future is uncertain.

This report discusses the existing regulatory environment as it pertains to fintech companies acquiring the ability to offer banking products and services, outlines the alternatives available, discusses opportunities and risks, and suggests actions that fintech companies can take. It is based on interviews and conversations with 14 thought leaders in the U.S. involved in the evolution of the fintech charter or confronted with the challenges of the current regulatory environment.

This 19-page Impact Note contains eight tables. Clients of Aite Group’s Retail Banking & Payments service can download this report and the Executive Impact Deck.

This report mentions Advance America, Affirm, Alipay, Amazon Pay, Balboa Thrift and Loan Association, Beal Bank USA, BMW Bank of North America, CBW Bank, Celtic Bank, Comenity Capital Bank, Community Commerce Bank, Eaglemark Savings Bank, EnerBank USA, Finance Factors Ltd., First Data, First Electronic Bank, Intuit Quick Books, LCA Bank Corporation, Medallion Bank, Merrick Bank, Minnesota First Credit and Savings Inc., Moven, Optum Bank Inc., PayPal, Sallie Mae Bank, SoFi Bank, Square, Stripe, Synchrony Bank, The Morris Plan Company of Terra Haute Inc., The Pitney Bowes Bank Inc., Toyota Financial Savings Bank, UBS Bank, USAA Savings Bank, Varo Money, WebBank, and WEX Bank.

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