Embracing bank-fintech partnerships and expanding “responsible bank activities involving digital assets” are two of the top four priorities of the acting leader of the national bank regulator, he told a Washington group Wednesday.
Speaking before the Exchequer Club (a Washington-based group made up of many of the leaders and top lobbyists of financial institution trade groups, among others), Acting Comptroller of the Currency Rodney Hood said his other two priorities are reducing regulatory burden and promoting financial inclusion (which he termed “the civil rights issue of our time”).
Regarding fintech (financial technology), Hood contended that – when deployed responsibly – it can broaden access, enhance efficiency, and “deepen relationships between banks and their customers.”
He pointed to recent, conditional approval for a national bank’s business model transformation. That approval, announced March 17, will allow fintech company SmartBiz Loans to change the business model of an Illinois bank – after the firm completes its purchase of the bank. The firm acquired CenTrust Bank, N.A., of Northbrook, Ill., which has changed its name to SmartBiz Bank, N.A. The firm applied to change the bank’s business model to conduct small business lending activities on a nationwide basis, the OCC said.
According to a letter released by the OCC (dated Feb. 18), the application was “part of a larger transaction in which Billfloat, Inc., a Delaware corporation doing business as SmartBiz Loans (SmartBiz), seeks to become a bank holding company by indirectly acquiring CenTrust.”
Hood said Wednesday that the approval of the changed business model provides “a nationwide, technology-enabled small business lending platform – illustrating the type of responsible innovation we are committed to supporting.”
On expanding bank activities involving digital assets, Hood maintained that recent guidance issued by the OCC (under Interpretive Letter 1183, issued March 7) gives banks a “framework for innovation while maintaining our high expectations for compliance and consumer protection.”
The letter stated that crypto-asset custody, “certain stablecoin activities,” and “participation in independent node verification networks such as distributed ledger” are now all permissible for national banks and federal savings associations.
The agency also said in the letter it has rescinded a requirement that banks it supervises must receive “supervisory nonobjection” and show they have adequate controls in place before they can engage in these cryptocurrency activities.
In other comments, Hood said regulations must be effective and not excessive, bolstering his emphasis on reducing regulatory burden. He said that the OCC “applies a risk-based approach to supervision, tailoring oversight according to each bank’s size, complexity, business model, and risk profile.”
On financial inclusion, Hood pointed to the agency’s Project REACh (Roundtable for Economic Access and Change), which preceded his leadership and the agency and is now overseen by his chief of staff. Hood said without access to fair and affordable financial services, 40% of American households that can’t cover a $400 emergency expense, or the estimated 70 million who are “credit invisible,” remain vulnerable to predatory lenders, to economic shocks, and to exclusion from opportunity.
Acting Comptroller of the Currency Discusses Agency Priorities
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