Tlaib, Lynch Lead Letter Blasting OCC for Unilateral Actions on Fintech Charter, Cryptocurrency

WASHINGTON—Today, Congresswoman Rashida Tlaib (MI-13) and Congressmen Stephen Lynch (MA-08) led a letter, which was cosigned by Reps. Jesús G. “Chuy” García (IL-04), Deb Haaland (NM-01), Barbara Lee (CA-13), and Ayanna Pressley (MA-07), to Acting Comptroller of the Currency (OCC) Brian Brooks concerning the bureau’s recent unilateral actions in the digital financial activities space, including interpretive letters on cryptocurrency custody, stablecoins, and its announced plans to start offering special purpose ‘payments’ charters.

One Interpretative Letter published September 21 would create a new class of institutions that benefits large, established fintech firms and harms the very innovation and choice that the former Comptroller of the Currency Joseph Otting said it would provide. The lawmakers say that and the OCC’s effort to grant commercial companies like Amazon and Facebook a national payments charter to access the Federal Reserve payments system and safety net without protecting the financial system and consumers from the related increase in systemic risk would expose the financial system to significant vulnerabilities at a time when the COVID-19 pandemic already has put it under immense strain.

“Arguably, the immediate needs of millions of at-risk individuals who have not yet received an economic stimulus check and/or cannot deposit their funds in a bank, deserve greater attention than an effort to increase access to financial services to the “banked community” via mobile phones,” the lawmakers wrote. “Our concern regarding the OCC’s excessive focus on crypto assets and crypto-related financial services is shared by the American Bankers Association and other trade groups who have expressed similar reservations that such services move too far away from the core business of banking.”

They went on to ask a series of questions with the goal of better understanding the OCC’s continuing efforts on these issues, such as whether newly allowed bank deposit reserves will be segregated from calculating the capital requirements of banks such as JPMorgan Chase and Wells Fargo or will they be able to lend against these deposits, what consumer protections the OCC will impose on the stablecoin providers themselves, etc.

The lawmakers asked for answers to their series of questions by December 10.

The full text of the letter can be found here.