Banking Regulator to Establish Oversight Office for Financial Industry Innovation

The Office of the Comptroller of the Currency (OCC) announced it will establish an office dedicated to responsible innovation in the federal banking sector and implement a formal framework to improve the agency’s ability to identify, understand, and respond to financial innovation. The OCC observed that technological advances and evolving consumer preferences are reshaping the financial services industry, noting the emergence of nonbank financial technology companies (fintechs) that provide financial products and services through alternative platforms and delivery channels.  The new Office of Innovation will be headed by a Chief Innovation Officer and will be located in Washington, D.C., New York, and San Francisco. The office will be the central point of contact and clearinghouse for requests and information related to innovation and will also implement other aspects of the OCC’s framework for responsible innovation, which include establishing an outreach and technical assistance program for banks and nonbanks and establishing an innovation research function. The OCC expects the office to begin operations in the first quarter of 2017. The OCC reported that it continues to assess whether to grant a special purpose national bank charter to nonbank fintechs. The agency plans to publish a paper later this year discussing the issues associated with establishing a special purpose charter and seeking comment on the topic.