The US Office of the Comptroller of the Currency (OCC) is to establish an Office of Financial Technology in the latest example of a regulatory body upping its fintech focus.
The OCC – an independent bureau of the US Department of the Treasury – charters, regulates and supervises national banks and federal savings associations, as well as federal branches and agencies of foreign banks.
The Washington DC-headquartered authority is to set up its Office of Financial Technology in early 2023 ‘to bolster the agency’s expertise and ability to adapt to a rapidly changing banking landscape’, according to a short announcement.
The Office of Financial Technology will ‘build on and incorporate’ the Office of Innovation, which the OCC established in 2016 to co-ordinate agency efforts to support responsible financial innovation. It will be led a by a chief financial technology officer, who will be a deputy comptroller reporting to the senior deputy comptroller for bank supervision policy.
“Financial technology is changing rapidly and bank-fintech partnerships are likely to continue growing in number and complexity,” said Michael J Hsu, who has been acting comptroller of the currency since May 2021.
“To ensure that the federal banking system is safe, sound and fair today and well into the future, we need to have a deep understanding of financial technology and the financial technology landscape. The establishment of this office will enable us to be more agile and to promote responsible innovation, consistent with our mission.”
Fintech momentum
The creation of the Office of Financial Technology follows moves by other financial authorities and regulators – in the US and worldwide – to devote increased focus and resource to fintech-related developments.
In the US, for example, the Securities and Exchange Commission (SEC) announced almost two years ago that its Strategic Hub for Innovation and Financial Technology, commonly known as FinHub, was to become a standalone office; and, outside the US, India’s central bank created a fully-fledged fintech department earlier this year ‘to give further focus to the area and facilitate innovation in the fintech sector in keeping pace with the dynamically changing financial landscape’.
The OCC’s mandate has evolved significantly since being established by the National Currency Act of 1863. The Federal Reserve Act of 1913 established the Federal Reserve System to issue currency, with the OCC focusing on bank scrutiny and regulation (the OCC continued to retain ‘currency’ in its name). More recently the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) of 2010 reassigned much of the OCC’s former compliance mandate to the newly created Consumer Financial Protection Bureau (CFPB), as well as establishing the Financial Stability Oversight Council (on which the comptroller of the currency sits).
Other financial regulatory agencies in the US include the Federal Deposit Insurance Corporation (FDIC), where the comptroller serves as a director. The FDIC has recently appointed Brian Whittaker as chief innovation officer. He had been acting in the position after the resignation in February of inaugural postholder Sultan Meghji after just a year. The Federal Reserve System appointed Sunayna Tuteja as its first chief innovation officer last year.
FURTHER READING
‘US consumer agency aims to “finalise” open banking rules in 2024’ – our news story (31 October 2022) on a speech by Consumer Financial Protection Bureau director Rohit Chopra setting out the government agency’s strategy for open banking regulation
‘White House publishes “comprehensive framework” for digital assets’ – our news story (21 September 2022) following up the executive order (see below)
‘White House sets out cross-government digital assets strategy’ – our news story (11 March 2022) on an executive order that stated that digital assets’ growth ‘creates an opportunity to reinforce American leadership in the global financial system and at the technological frontier, but also has substantial implications for consumer protection, financial stability, national security and climate risk’
‘US DoJ appoints digital assets prosecutor to head crypto crimes team’ – our news story (28 February 2022) on the appointment of Eun Young Choi as inaugural director of the Department of Justice’s newly created National Cryptocurrency Enforcement Team (NCET) to spearhead an intensification of efforts to tackle digital asset crimes
‘US SEC’s fintech unit to become standalone office’ – our news story (4 December 2020) on the Securities and Exchange Commission (SEC) designating its Strategic Hub for Innovation and Financial Technology, commonly known as FinHub, as a standalone office
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