Coming Up: A National Non-Depository Payments Charter?

Brian Brooks, Chief Operating Officer of the Office of the Comptroller of the Currency (“OCC”) said on 11 May that he believes the OCC should investigate the viability and utility of a non-depository payments charter: “One of the things I think we have to ask ourselves as an agency is, if it makes sense to have a non-depository lending charter, which was the original fintech concept, would it also make sense to have a non-depository payments charter?”

In his talk, given as part of the Consensus: Distributed virtual conference, Brooks focused on cross-border concerns that are particularly salient to crypto companies. He notes that we may have come to a point where the traditional state-federal divisions of licensing and oversight authority are less relevant, particularly in the crypto space. Brooks says there is an argument that “crypto looks a lot like banking for the twenty-first century,” in which case a single national license may provide modern update to the current patchwork of laws, which is burdensome and time-consuming for both payments companies and state regulators.

Brooks said “one of [his] missions at the OCC . . . is to investigate the extent to which over time it makes sense to think of crypto companies like banks and to think of charter types that might be appropriate for crypto companies.” While Brooks’ comments focused on crypto in mentioning a payments charter, he noted Stripe and PayPal as non-blockchain payments companies, which would presumably also be covered by such a payments charter.

This is the latest piece of news in a space that has seen continuous change and innovation. State regulators recently introduced the Multistate Money Services Business Licensing Agreement (“MMLA”) Program to make money transmission licensing more efficient. This corresponds with the Conference of State Bank Supervisors (“CSBS”) Vision 2020, which has a goal of “an integrated, 50-state licensing and supervisory system, leveraging technology and smart regulatory policy.” As part of its effort, the CSBS is drafting model money services business law language.

We continue to track these and other efforts to modernize and harmonize the regulation and supervision of money transmitters, and look forward to the OCC’s future announcements and innovation in the payments space.

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