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Treasury Report Opens Doors for Fintech; OCC Allows Applications for Fintech Bank Charters

The U.S. Treasury Department issued a report that signaled a more open stance toward fintech firms and regulation. “Treasury believes that innovation is critical to the success of the U.S. economy, particularly in the financial sector. Throughout Treasury’s findings, opportunities have been identified to modernize regulation to embrace the use of data, encourage the adoption of advanced data processing and other techniques to improve business processes, and support the launch of alternative product and service delivery systems.” With around 80 recommendations, the proposals will require action from Congress, banking and other regulators. SEC Chairman Jay Clayton in a statement said the Treasury reports “will continue to inform the regulation of our markets. The Treasury reports have made an extremely valuable contribution to the SEC’s mission, and, importantly, to investors in our capital markets.”Among the recommendations are that federal and state financial regulators establish a unified solution that coordinates and expedites regulatory relief to permit meaningful experimentation for innovative products, services, and processes, in essence forming a “regulatory sandbox” that can enhance and promote innovation. Meanwhile, the OCC announced that it would begin accepting applications for national bank charters from fintech companies engaged in the business of banking, capping a long process that has faced opposition from state banking authorities.