WASHINGTON Online credit companies and paperless lenders may seek a federal charter to do their business nationwide under a plan outlined on Friday by a U.S. banking regulator.
The Office of the Comptroller of the Currency, the main regulator for federal banks, said it hoped offering a charter for “fintech” companies would spur innovation in the banking sector.
“Technology-based products and services are the future of banking and the economy,” OCC director Thomas Curry said in a speech outlining the proposal.
The move might change the regulatory landscape for online lenders such as On Deck, Kabbage Inc. and Quicken Loans.
The OCC will allow fintech companies to operate nationally through a “special purpose charter” that has been used in the past to license credit card companies.
Curry said his agency is open to discussing specific terms of what a charter would entail.
Because they do not accept customer deposits, fintech companies are not subject to many federal banking laws. The businesses often operate under licenses from individual states.
On Friday, Curry said the hand-tailored charters for fintech companies would expect those lenders to reach underserved communities and uphold consumer protections.
Online lenders have encroached on traditional banking services in recent years with lower overhead and less paperwork. Curry said worldwide investment in the fintech industry has grown in the past five years to $24 billion from $1.8 billion.
(Reporting By Patrick Rucker; Editing by Bill Trott)