Banks Push Back On Possible Banking Charters For Big Techs Like Amazon And Facebook
From PYMNTS.com:
A U.S. House committee this week began reviewing the idea of allowing
the likes of Amazon or Facebook to receive charters to operate as banks
— an idea that’s already gotten plenty of pushback from traditional
financial institutions (FIs).
The House committee held a hearing on the idea
after Acting Comptroller of the Currency Brian Brooks in July proposed a
new special purpose national banking charter for payments companies.
Overseen
by the Office of the Comptroller of the Currency (OCC), the charter
would allow firms like Facebook, Google or Amazon to bypass the process
by which they need to collect money transmitter licenses state by state.
It would instead offer payment companies a national servicing platform
to replace the regime of state regulations such firms would be subject
to under existing laws.
However, the banking industry doesn’t like that one bit.
“We
oppose the OCC’s effort to grant commercial companies like Amazon or
Facebook a national payments charter to access to the Federal Reserve
payments system and safety net, [the] most critical part of our
country’s financial infrastructure … without protecting the financial
system and consumers from the concomitant increase in systemic risk,”
industry leaders wrote in a recent letter to key lawmakers.
Co-signed
by the American Bankers Association, Bank Policy Institute, Independent
Community Bankers of America and The Clearing House, the letter argues
that banks and non-bank technology firms are both already embracing
innovation in customer service offerings. The groups argue that such
efforts are secured under the current regulatory regime, and that
allowing innovation at the expense of the financial system’s stability
isn’t beneficial.
“Commercial companies accessing a payments
charter would avoid oversight and regulations that protect the financial
system and consumers,” the bank industry leaders wrote....
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