The Changing Nature of Financial Regulation

Last Friday, right before I keynoted the University of Maryland’s Robert H. Smith School of Business’ Marketing & Finance SuperDay, I received an alert from the Wall Street Journal that the Office of the Comptroller of the Currency (OCC) will start issuing bank charters for fintech firms. This move doesn’t come as a surprise; indeed, there have been numerous on-the-record remarks about how and where the fintech sector can benefit smaller “legacy providers” in terms of innovation and scalability.

Until Friday, Thomas Curry, head of the OCC, had taken a firm stance toward FinTechs, making it clear that he would hold them to the standards and regulations written for incumbent financial services institutions. So as the OCC considers the benefits such firms might provide, I’m not surprised the agency will, for the first time, “start granting banking licenses to fintech firms, giving them greater freedom to operate across the country without seeking state-by-state permission or joining with brick-and-mortar banks.”

Now, FinTech is just one area of regulation that is a-changin’. As our Editor-in-Chief, Jack Milligan, recently wrote on, “one of the more intriguing story lines of the banking industry’s consolidation since the financial crisis is the persistent belief that federal regulators privately want a more concentrated industry with fewer banks because it would be easier for them to supervise, and they signal their support for this laissez-faire policy every time they approve an acquisition.”

Against this backdrop, I am looking forward to hearing Vice President Joe Biden speak at Georgetown’s McDonough School of Business this afternoon. I have a lot of respect for the Vice President, and find his remarks on “The Importance of Sound Financial Sector Regulation” to fit the timely and relevant standards that we prize at Bank Director and FinXTech. Thanks to the business school’s Center for Financial Markets and Policy for inviting me. As appropriate, I will share my takeaways from this presentation via twitter – @aldominick — and with a follow up post on this blog ASAP.

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