Posted April 28, 2017
Keith Noreika Named Acting Comptroller of the Currency
On May 3, 2017, the Treasury Department announced that attorney Keith Noreika will temporarily replace Thomas Curry to lead the OCC, effective May 5. Furthermore, the Trump administration is rumored to be considering Joseph Otting to fill the role on a permanent basis. Mr. Otting’s resume includes stints at U.S. Bancorp, CIT, and then as CEO of OneWest following the merger.
This shift at the OCC marks the administration’s first imprint on major bank regulatory agencies. Administrative relief through the regulatory agencies is likely to be the primary avenue for changes to the regulatory regime in the near term. Secretary Mnuchin’s June 2017 Dodd-Frank report will likely serve as the roadmap for these efforts.
White House Issues Executive Order Re: American Technology Council
On May 1, 2017, the White House issued an executive order creating the American Technology Council. The Council will be led by the President himself and also includes members from the highest levels of the federal government such as the vice president; the secretaries of Defense, Commerce and Homeland Security; the director of national intelligence; and senior presidential adviser Jared Kushner.
The Council's aim is to "coordinate the vision strategy, and direction for the federal government's use of information technology (IT) and the delivery of services through information technology," according to the order.
Comptroller Curry Speaks Re: Fintech – Says Banking Must Continue to Evolve
On April 28, 2017, Comptroller of the Currency Tom Curry gave a speech which called out the banking industry’s need to keep current with technology and innovation, and aimed to defend the OCC’s efforts to encourage such growth.
The agency’s limited purpose bank charter for fintech firms has faced opposition within the banking industry, with argument that the startups are not banks. Curry, (who will remain acting Comptroller until the Senate confirms a replacement), addressed this in his speech stating “At the heart of the issue is the fundamental nature of the business of banking – the business of banking is dynamic and I would urge caution to anyone who wants to define banking as a static state. Such a view risks choking off growth and innovation.”
Curry also praised the fintech sector for maturing, noting that their “conferences now include topics such as 'meeting community needs,' ‘financial inclusion,’ ‘collaboration’ and ‘compliance,’”.
CFS Hearing – “A Legislative Proposal to Create Hope and Opportunity for Investors, Consumers, and Entrepreneurs”
On April, 26, 2017, The Committee on Financial Services held a hearing entitled “A Legislative Proposal to Create Hope and Opportunity for Investors, Consumers, and Entrepreneurs.”
This hearing examined a discussion draft of the “Financial CHOICE Act of 2017,” which the Committee publicly released on April 19, 2017. A summary of the bill can be found here.
GAO Report – Financial Technology: Information on Subsectors and Regulatory Oversight
On April 19, 2017, the Government Accountability Office (GAO) released the first in a planned series of reports on the growing and wide-ranging fintech industry. This comes in response to requests from several congressional offices as fintech continues to gain attention from consumer advocates as well as the traditional financial industry. The report called out the following four fintech subsectors and regulatory oversight for each as well as potential benefits and risks.