- The Office of the Comptroller of the Currency (OCC) is launching an Office of Financial Technology in an effort to bolster the agency’s fintech expertise, the regulator announced Thursday.
- The office will open early next year and will incorporate the Office of Innovation, which the regulator created in 2016, the OCC said.
- The move comes as the regulator has indicated it’s stepping up scrutiny of bank-fintech partnerships, and amid calls from conservative lawmakers for the OCC to shed more light on how it plans to regulate such tie-ups.
The OCC said it expects the new office will help it become more agile and promote responsible innovation, consistent with its mission.
“Financial technology is changing rapidly and bank-fintech partnerships are likely to continue growing in number and complexity,” Acting Comptroller Michael Hsu said in a statement. “To ensure that the federal banking system is safe, sound, and fair today and well into the future, we need to have a deep understanding of financial technology and the financial technology landscape.”
Hsu has been vocal about the regulator’s intention to get a better handle on the size and scope of bank-fintech partnerships, announcing in a September speech an OCC initiative to subdivide bank-fintech arrangements into cohorts with similar safety and soundness risk profiles and attributes.
The arrangements represent the “de-integration” of banking and are changing the banking industry’s risk profile, Hsu said.
Fearing overregulation could stifle innovation, conservative lawmakers have been eager for the OCC to provide more clarity on how it plans to oversee bank-fintech partnerships going forward.
“Fintech partnerships can lead to cost savings for both fintechs and banks, increase competition, and provide faster, better, and cheaper banking products and services for consumers,” five House Republicans, led by Rep. Patrick McHenry, R-NC, wrote the acting comptroller in October.
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