National bank charters draft proprietary and

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National bank charters
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Chapter 13 / Exercise 13-9
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DRAFT, PROPRIETARY AND CONFIDENTIAL. GAUSSIAN HOLDINGS, LLC.80Opposition within fintechAgainst the idea of national fintech charterGranting national bank charters to fintechenterprises was not an easy decision for theU.S. Treasury and the OCC. This is becausethe interest in a charter among fintech firmsthemselves has dwindled since the agencyfirstproposedtheidea.Somefintechcompanies indeed remain skeptical aboutapplying for a national bank charter. Theoverridingreasonforthereluctancetosubscribe to the charter idea is the cost.Many cite cost of regulation and increasedpaperwork among the reasons why they arenot too keen about the idea.The new charter gives non-banks an avenue thatcouldpotentiallythreatentraditionalbankingproviders.Lawsuitsfrominterestslookingtoprotect legacy banks and credit unions had indeedattemptedtokillthefintechcharterproposalwhile it was still in the incubator, but federaljudgesdismissedsuchcasesas“premature”because no charters had been granted at the time.Similar lawsuits are likely to resurface as fintechsbegin applying forand gettingthe newspecialcharters.ThecritiquesincludetheConferenceofStateBankSupervisors,NYDepartment of Financial Services, the AmericanBankersAssociationandtheIndependentCommunity Bankers of America (ICBA).Banks and credit unions
DRAFT, PROPRIETARY AND CONFIDENTIAL. GAUSSIAN HOLDINGS, LLC.81Marketplace Lending:Codifying by Congress of the“validwhenmade”doctrine and the role of the bank as the“truelender”ofloansitmakestobettersupportproductivepartnerships between banks and newer technology basedfirms.Federalbankingregulatorsshouldalsousetheiravailable authorities to address these challenges.Mortgage Lending and Servicing:Promoting changes toaccommodateanend-to-enddigitalmortgage,includingacceptance of digital promissory notes, recognition of moderndigital notary standards, and automated property appraisals.StudentLendingandServicing:Establishingminimumeffective guidance for how servicers handle decisions withsignificant financial implications. Treasury also recommendslegislative action to implement a risk-sharing program forinstitutions participating in the federal student loan program.Short-Term, Small-Dollar Installment Lending:Recognizingandsupportingtheauthorityofstatestoestablishcomprehensiverequirementsfortheseproductsandrecommending that the Bureau of Consumer FinancialLending and servicingProtection rescind its Payday Rule. Treasury also recommendsthatregulatorstakesteps toencouragesustainableandresponsible short term, small dollar installment lending bybanks.Debt Collection:Establishing minimum federal standardsgoverning the collection of debt by third-party debt collectors.

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