As the battle over the Office of the Comptroller of the Currency (OCC)’s proposed financial technology (“fintech”) charter continues, investors in fintech companies should consider what it would mean for their business strategies if fintech companies actually did become banks. From an investor’s perspective, is there upside or downside to a fintech company becoming a bank?
First, there are advantages to status as a bank. In particular, it could liberate fintech companies from certain onerous state-by-state requirements, such as licensing requirements and interest rate limits. Especially for fintech companies whose businesses center on money transmission or consumer lending—activities that are particularly affected by these state laws—this could be a huge advantage. Continue Reading What Investors in Fintech Companies Need to Know About ‘Fintech Banks’