Brian Brooks, The acting head of the US office of the Comptroller of the Currency (OCC) and former Chief Legal Officer at Coinbase has warned against this The Consumer Financial Protection Office has no right to grant “Fintech Charters”.
Earlier this week, the CFPB’s Consumer Finance Law Working Group published a report containing 102 policy recommendations to “improve and strengthen” financial regulations. including the proposal that Congress authorize the CFPB to issue federal law to non-custodians, financial firms that do not accept customer deposits, and to charge fees for other financial services.
In 2020, under the direction of Brian Brooks, the office of the currency auditor prepared the Special Purpose Payment Letter for FinTech, which paved the way for certain cryptocurrency companies to apply for recognition as a national bank. Paxos and BitPay applied for approval to charter under the new regime in December.
If the CFPB’s right to charter fintechs is expanded, This could reduce regulatory clarity about which entities non-custodian cryptocurrency companies should apply to and create overlaps between the mandates of both entities.
In a January 6 statement The acting head of the office of currency auditor denied the CFPB’s request to grant it the right to charter fintechs, warning that the move would undermine legislation intended to separate the two agencies’ regulatory responsibilities after the 2008 financial crisis:
“In its wisdom, in the Dodd-Frank Act, Congress separated the charter and oversight from consumer enforcement and transferred the charter authority to the office of currency auditor and specific enforcement authority from consumer protection to the CFPB.”
Brooks argued that the existing dynamic “should be maintained” to ensure that no regulatory authority’s responsibilities overlap. Noting that “the additional safeguards were applied after the last financial crisis […] They have separated these responsibilities so that neither of them has been compromised in the service of the other. “
“This dynamic should be maintained so that the CFPB continues to enforce compliance with the publicly traded laws mentioned in the Dodd-Frank Act to protect financial consumers for financial companies, while avoiding the creation of a prudential oversight vacuum that could lead to serious security and solidity risks. “
January 4th The Office of the Currency Auditor published a guide informing national banks that they can use public blockchains and dollar stablecoins to settle, run nodes and act as validators of blockchain networks.
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