Pub. 11 2016-2017 Issue 5

January/February 2017 Extraordinary Service for Extraordinary Members. we’re Always CLOSE BY NetWorks is the Electronic Funds Transfer (EFT) service provider that Nebraskans have used and learned to trust like family for over 30 years. Since our offices are right here in Nebraska, you can count on us to provide quick and personalized service for all of your EFT needs. Give us a call and let’s talk about how we can simplify EFT for you. You will talk with a fellow Nebraskan and not some automated system. www.netseft.com Toll Free 800-735-6833 Local 402-434-8202 Kevin Griffith is an associate in Kutak Rock LLP’s Omaha, Neb., office. He focuses his practice on corporate finance, mergers and acquisitions, and financial services regulatory matters. For more information, contact Kevin at (402) 346-6000 or kevin.griffith@kutakrock. com. Dual-Banking System A week after the OCC proposed the fintech charter, California’s financial regulator began calling on other states to make the state licensing process more uniform and streamlined. Reciprocity of licensure is an idea being discussed. Overall, states’ re- actions are firmly against an OCC fintech charter asserting that it will grant an unfair advantage in the marketplace and will hurt consumers if state consumer protection laws are preempted. Comptroller of the Currency Curry addressed these concerns in a speech accompanying the release of the proposed fintech charter. “Granting national charters to the companies who desire and warrant one doesn't weaken the competitive position of existing banks or the dual banking system,” stated Curry. “In some ways, it levels the playing field because statutes that by their terms apply to national banks would apply to all special purpose national banks, even uninsured ones.” It remains to be seen whether states’ concerns over competitive ad- vantages or consumer protection are valid. Under the current dual-banking system, it does not appear as though national banks have competitive ad- vantages over state banks such that state banks are rendered obsolete. If anything, the fintech charter is an extension of the banking system’s federal-state construct to money lending and money transmitter busi- nesses. The dual-banking system structure, especially when it comes to lending money, seems unlikely to be significantly jeopardized by the OCC fintech charter. The proposed fintech charter is a clear sign that the OCC believes the financial industry is undergoing a period of rapid innovation that could change the financial landscape. These collective efforts are important steps in both solidifying responsible innovation and keeping the United States at the fore of the global finan- cial services industry. It is important that community and mid-sized banks continue to monitor and adapt to the impacts of the fintech charter on the marketplace.  1 Exploring Special Purpose National Bank Charters for Fintech Compa- nies, OCC White Paper (www.occ.treas.gov/topics/bank-operations/inno- vation/special-purpose-national-bank-charters-for-fintech.pdf) 2 In relation to requesting comment regarding a fintech charter, the OCC has finalized a framework for receiverships for national banks that are not insured by the FDIC and for which the FDIC would not be appointed as receiver. (www.occ.treas.gov/news-issuances/news-releases/2016/ nr-occ-2016-160.html )