‘Two cops on the beat’: Regulator wants sole authority to charter fintech firms
” Earlier this week, the CFPBs Taskforce on Consumer Financial Law published a report including 102 policy recommendations meant to “enhance and improve” financial guidelines, consisting of proposing that Congress empower the CFPB to federally charter nondepository institutions– financial firms that do not take consumer deposits and gather charges for other financial services.Under Brian Brooks leadership, the OCC developed the Special Purpose Payments Charter for FinTech in 2020, paving the way for specific crypto companies to use for recognition as a national bank. Should the CFPB be extended the right to charter fintechs, it might minimize regulative clarity as to which firms non-depository crypto firms need to use to, and create overlaps between the mandates of the 2 agencies.In a Jan. 6 statement, the acting OCC head pushed back against the CFPBs demand for the right to charter fintechs, alerting the move would undermine legislation planned to separate the regulatory duties of the 2 agencies after the 2008 monetary crisis: “In its wisdom, Congress in the Dodd-Frank Act separated chartering and prudential guidance from customer defense enforcement, appointing chartering authority to the OCC and specific consumer protection enforcement authority to the CFPB.” That dynamic should be preserved so that the CFPB continues to implement compliance with identified financial customer protection laws for the monetary companies designated by the Dodd-Frank Act, while at the very same time avoiding the creation of a prudential guidance space that might lead to serious security and soundness risks.
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