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Brian Brooks, acting director of the US Office of the Comptroller of the Currency and former legal director of Coinbase, warned against the Consumer Financial Protection Bureau getting the right to grant “fintech charters.”
Earlier this week, the CFPB Consumer Financial Law Task Force released a report containing 102 policy recommendations aimed at “improving and strengthening” financial regulation, including proposing that Congress empower the CFPB to charter at the level. Federal non-depository institutions – financial firms that do not accept deposits from customers and charge fees for other financial services.
Under Brian Brooks’ leadership, the OCC created the Special Purpose Payments Charter for FinTech in 2020, paving the way for some crypto firms to seek recognition as a national bank. Paxos and BitPay applied for charter approval under the new regime in December.
If the CFPB were granted the right to charter fintechs, it could reduce regulatory clarity as to which agencies non-custodial crypto firms should go to and create overlaps between the mandates of the two agencies.
In a Jan.6 statement, the acting chief of the OCC rejected the CFPB’s request for the right to charter fintechs, warning that the move would undermine legislation intended to separate the regulatory responsibilities of the two agencies after the 2008 financial crisis:
“In its wisdom, Congress, in the Dodd-Frank Act, separated chartering and prudential oversight from consumer protection enforcement, assigning charter authority to the OCC and specific application of consumer protection to the CFPB.
Brooks argued that the existing momentum “should be preserved” to ensure that none of the regulators overlap, noting “the additional protections implemented after the latest financial crisis […] has separated these responsibilities so that neither is compromised in the service of the other.
“This dynamic must be preserved so that the CFPB continues to enforce the listed laws on the protection of financial consumers for financial companies designated by the Dodd-Frank Act, while at the same time avoiding the creation of a monitoring gap. prudential which could lead to serious risks to safety and soundness. “
On January 4, the OCC issued guidance advising national banks that they can use public blockchains and dollar stablecoins for settlement, run nodes, and act as validators for networks of block chains.
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