More than 250 groups sent a letter today to Comptroller of the Currency Thomas J. Curry urging him not to grant national charters to financial technology firms, which could preempt state oversight and state consumer protection laws that protect consumers and small businesses from abusive financial practices. The letter by state advocates, affordable housing providers, national civil rights organizations, small business advocates, and many others sends a strong message to the OCC about the risk it creates to state-level protections against predatory lending. Many of the letter signors have spent years enacting and defending the very state law protections which the charter proposal undermines. The group wrote:
State laws often operate as the primary line of defense for consumers and small businesses; thus, the proposal puts them at great risk. The OCC must not undermine state rate caps. Interest rate caps are the simplest, most effective way to protect borrowers from unaffordable, high-rate loans and to align the interests of lenders and borrowers. …The OCC’s proposal promotes the expansion of questionable lending practices that are not only subject to state interest rate limits or state-level enforcement, but also not would not be subject to examination or ratings under the Community Reinvestment Act or the law’s requirements to provide responsible, not predatory, credit. The OCC’s legal authority to charter non-depository lenders unilaterally, without congressional approval, is also doubtful.
The OCC made its announcement to explore granting charters to fintech companies in December and has sought out comments by the public. The deadline is officially January 15, 2017 but the OCC will accept comments through January 17.