Brian Brooks, acting chief of the United States Currency Controller Office and former legal director of Coinbase, warned against the Consumer Financial Protection Bureau being granted the right to grant “Fintech Charters”.
Earlier this week, the CFPB Task Force on Consumer Financial Legislation published a report with 102 policy recommendations to “improve and strengthen” financial regulations, including the proposal that Congress authorize the CFPB to federally license non-financial institutions. depositories – financial companies that do not accept deposits from customers and charge fees for other financial services.
Under the leadership of Brian Brooks, the OCC created the Special Purpose Payments Letter for FinTech in 2020, paving the way for certain crypto companies to apply for recognition as a national bank. Paxos and BitPay sought approval for charter under the new regime in December.
Should the CFPB expand the right to charter fintechs, this could reduce regulatory clarity about which agencies non-depository cryptocurrencies should apply to and create overlaps between the mandates of the two agencies.
In a January 6 statement, the interim chief of the OCC opposed the CFPB’s request for the right to charter fintechs, warning that the measure would undermine legislation designed to separate the regulatory responsibilities of the two agencies after the 2008 financial crisis:
“In its wisdom, Congress, in the Dodd-Frank Act, separated regulation and prudential supervision from the application of consumer protection, assigning chartering authority to the OCC and specific consumer protection enforcement authority to the CFPB.”
Brooks argued that the existing dynamics “must be preserved” to ensure that none of the regulators’ responsibilities overlap, noting “the additional protections implemented after the last financial crisis. […] he separated these responsibilities so that neither of them was committed to serving the other. “
“This dynamic must be preserved so that the CFPB continues to enforce compliance with the enumerated laws for the protection of financial consumers for financial companies designated by the Dodd-Frank Law, while avoiding the creation of a gap in prudential supervision that could lead to serious security and soundness risks. “
On January 4, the OCC issued guidelines informing national banks that they can use public blockchains and dollar stablecoins for settlement, execute nodes and act as validators for blockchain networks.