Pub. 12 2017-2018 Issue 5

NEBRASKA BANKERS ASSOCIATION 15 For more information, contact Jeff Makovicka at Kutak Rock LLP at (402) 346-6000 or jeff.makovicka@ kutakrock.com . Makovicka is a member of Kutak Rock LLP’s banking practice group, in which he concentrates on bank matters. said the dismissal of the SDNY case would allow the OCC to “now focus on which direction it wants to take with the fintech policy without having to simultaneously fight the case.” According to Noreika, the OCC has been actively talking to potential fintech applicants, but “there were only a few good candidates, and the granting of a charter would be at least probably a year off." 17 Regardless of the outcome of any le- gal challenges or the OCC’s willingness to issue final rules on fintech charters, state regulators are preparing for a world without the fintech charter. State regulators are discussing ways to create a single regulatory structure for fintechs seeking regional or national business. In May 2017, CSBS announced several initiatives aimed at making its Nation- wideMultistate Licensing System—which was originally designed for the mortgage market—more attractive to fintechs by “moderniz[ing] state regulation of non-banks, including financial technol- ogy [fintech] firms." 18 The very next day, NYDFS announced it would join the Nationwide Multistate Licensing Sys- tem. 19 By harmonizing the supervision and licensing system and working more closely together, state regulators seem- ingly are attempting to eliminate a key reason to seek the fintech charter, namely the ability to deal with one federal agency and follow a single set of rules. Expect the saga of the fintech charter to continue well into 2018. Some good may come of this, however. The state and federal conflict may have “moved the needle” on creating a regulatory scheme for fintechs as the OCC’s action has forced the states to run to catch up. “I think creative tension is very healthy,” said former Comptroller Thomas Curry on the topic. 20 Ultimately, we won’t know whether the OCC can do what it pro- poses until it actually does. Stay tuned.  1 The fintech charter would apply a bank regulatory framework to financial technology firms to help ensure they operate in a safe and sound manner. 2 See Vullo v. Office of the Comptroller of the Currency, Case 17-cv-03574 (S.D.N.Y. May 12, 2017). 3 See Conf. of State Bank Supervisors v. Office of the Comptroller of the Currency, Case 1:17-cv-00763-JEB (D.D.C. April 26, 2017). 4 See Remarks of Thomas J. Curry, Comptroller of the Currency, before the Federal Home Loan Bank of Chicago (August 7, 2015). 5 Id. 6 See Proposed Rulemaking, Receiverships for Uninsured National Banks, 81 Fed. Reg. 62,835 800-288-5489 www.ccbcm.com Fully registered Dealer Bank • Not FDIC Insured • No Bank Guarantee • May Lose Value { 1985 Since FROM ONE COMMUNITY BANK TO ANOTHER. We have delivered fixed income strategies and support to banks of all sizes since 1985. Operating in over 30 states, the Capital Markets Group is always ready to meet the needs of our fellowcommunity bankers.We keep investing simple so that banks can focus on what really matters— lending to the communities who support us. • Portfolio Strategy, Sales and Service • Bond and Securities Underwriting/Trading • BancPath® and FlexLoan® via Asset Management Group We speak the same language. (September 13, 2016). 7 Office of the Comptroller of the Currency, Exploring Special Purpose National Bank Charters for Fintech Companies (December 2016). 8 Remarks by Thomas J. Curry Comptroller of the Currency at LendIt USA 2017 (March 6, 2017). 9 OCC, Comptroller’s Licensing Manual Draft Supplement: Evaluating Charter Applications From Financial Technology Companies (March 15, 2017). 10 Statement from John W. Ryan, president and CEO, Conference of State Bank Supervisors (June 1, 2017). 11 Conference of State Bank Supervisors, Comment re: Receiverships for Uninsured National Banks, Proposed Rule; Docket ID OCC-2016-0017 at 2 (November 14, 2016). 12 See Rachel Witkowski, State Banking Regulators Sue Federal Agency to Stop Charters for Fintech Firms, Wall Street Journal (April 26, 2017). 13 Memorandum of Points and Authorities in Support of Defendants’ Motion to Dismiss, CSBS v. OCC, 1:17-cv- 00763 (D.D.C. July 28, 2017). 14 Memorandum and Order, Vullo v. OCC, Case 17- cv-03574 (S.D.N.Y. December 12, 2017). 15 Lalita Clozel, Fintech Charter Is Still in Play, New Comptroller Says, Wall Street Journal (December 20, 2017). 16 John Heltman, OCC’s Otting sees future for fintech charter, CRA reform, American Banker (December 20, 2017). 17 Id. 18 CSBS Announces Vision 2020 for Fintech and Non- Bank Regulation (May 10, 2017); Lalita Clozel, States move to obviate fintech charter, American Banker (May 10, 2017). 19 Lalita Clozel, New York joins common state licensing platform for fintechs, American Banker (May 11, 2017). 20 Steve Cocheo, Not “ripe” says judge dismissing N.Y. fintech charter challenge, Banking Exchange (December 13, 2017).