Comptroller of the Currency Describes Regulatory Approach to Fintech Innovation

Steven Lofchie Commentary by Steven Lofchie

Comptroller of the Currency Thomas J. Curry described the approach of the Office of the Comptroller of the Currency ("OCC") to regulatory initiatives and methodologies concerning fintech innovation. In remarks at the Chatham House "City Series" Conference titled "The Banking Revolution: Innovation, Regulation and Consumer Choice," Mr. Curry posed the question: are regulators prepared for the "Uber moment" of fintech disruption? He observed that investments in fintech grew from $1.8 billion to $24 billion worldwide over the past five years. Mr. Curry listed regulatory responses to those developments, and emphasized that the OCC has (i) outlined guiding principles for its regulatory approach to innovation, and (ii) established a team dedicated to implementing those principles including the appointment of a Chief Innovation Officer to lead the effort.

Mr. Curry cautioned that pilot projects are "important tools companies should use to test the viability of retail products and the effectiveness of their systems before rolling them out more widely." He argued against the idea that regulators should create a "safe space" in order to allow companies to try out new products, since "[i]t is the company's responsibility to ensure products and processes are safe before rolling them out." Mr. Curry urged each company to design pilots carefully by controlling their scope and duration, and by working with regulators closely.

Mr. Curry pointed out that the OCC is still deciding whether to grant national charters to fintech companies that conduct banking activities. He noted that the OCC plans to "issue a paper soon to describe thoughts on this important question and seek comment on approach."


Will an institution that "works with regulators" to test new products be able to keep pace with changes in the market? Consider the difficulty of numerous legal questions that regulators elect not to answer even when their response effectively would be the law, and even when the absence of that response forces firms to take on legal risks. Will regulators truly be prepared to judge when business technology products are ready to be launched? (See also video selection.)

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