After the congressional Democrats took aim at the licence on Thursday, Brian Brooks has defended the Finetech banking charter introduced while he served as the acting comptroller of the currency.
At an April 15th hearing titled ‘Banking innovation or Regulatory Evasion? Exploring Trends in Financial Institution Charters’ Brian appeared as a witness before the House Financial Services Committee’s Subcommittee on Consumer Protection and Financial Institutions.
Allowing financial technology firms including cryptocurrency companies to offer lending and payment products without being overseen by state banking regulators, FDIC insurance or deposits from customers, the FinTech charter was introduced by the Office of the Comptroller of Currency and overseen by Brooks in 2020.
Californian representative and chairwoman of the House Financial Services Committee, Maxine Waters, claimed that banks and state regulators have complained about the lack of regulatory scrutiny faced by fintech firms licensed under the charter:
“State regulators, community banks and credit unions have raised alarms about how new entities, including big tech firms, are receiving unconventional bank charters and offering bank products and services while evading regulations most banks, including community banks, must comply with.”
Waters characterized the OCC of having “overstepped its authority,” accusing the office of “pretending that laws signed by Abraham Lincoln were intended to create charters for fintech or cryptocurrency.”
However, Brooks told the committee the charter had bolstered regulatory oversight of the fintech and crypto industries, arguing their activities would otherwise continue outside of regulators’ view