OCC FinTech Charter

[JoeF]

OCC moving forward with limited purpose charter. Do P2P companies and/or investors care?  Maybe with FDIC insurance, they will become the credit union of the digital age.

https://occ.gov/news-issuances/news-releases/2016/nr-occ-2016-152.html" class="bbc_link" target="_blank">https://occ.gov/news-issuances/news-releases/2016/nr-occ-2016-152.html

[Fred93]

I believe its a big thing for the P2P companies.  If it works out, they will be able to reduce the complexity of their compliance by avoiding state-by-state licensing and complex relationships with a bank.

For investors I don't think it matters.

[rawraw]

https://forum.lendacademy.com/index.php?topic=4201.msg38837#msg88888888Quote"> from: Fred93 on December 02, 2016, 05:02:37 PM

[Peter]

Frankly, sounds like a wonderful way for a bunch of lobbyists on all sides to enrich themselves for the next few years, keep new entrants distracted in regulatory limbo, and allow the already established players to strengthen ties with "real" banks and capture market share - perhaps picking up a "real" bank or two, on the cheap, as their long-term valuations are diminished by the uncertainty of their necessity.

Maybe I'm just being cynical at the use of the term "credit union of the digital age" - it sounds like marketing copy, not a business model.

I am open to being enlightened, however.

[TravelingPennies]

https://forum.lendacademy.com/index.php?topic=4201.msg38844#msg88888888Quote"> from: nonattender on December 03, 2016, 02:19:55 AM

[TravelingPennies]

If I can spend a few hundred K on K street to make it look like I can be a bank without being a bank, I can reduce the asks / extract lower costs from the banks with whom I already have to deal - see CRB/WebBank - and perhaps scare other banks into acquisition/partnership.

ETA:  Of course, if I actually go through with / get away with that - and special charters issue - then I'll make more competition for myself - so, I'll hedge by taking a chunk of Cross River (just happened) - wait for OCC to gain steam - and buy up whatever else comes to market, knowing that at any moment I can stop funding the special charter initiative and have the market all back to myself again as dust settles.

Maybe I'm being *really* cynical...

[Fred]

The requirements are quite high though:

Quote

[TravelingPennies]

https://forum.lendacademy.com/index.php?topic=4201.msg38847#msg88888888Quote"> from: Fred on December 03, 2016, 02:39:13 AM

[TravelingPennies]

https://forum.lendacademy.com/index.php?topic=4201.msg38846#msg88888888Quote"> from: nonattender on December 03, 2016, 02:30:43 AM

[TravelingPennies]

https://forum.lendacademy.com/index.php?topic=4201.msg38849#msg88888888Quote"> from: rawraw on December 03, 2016, 02:59:21 AM

[TravelingPennies]

https://forum.lendacademy.com/index.php?topic=4201.msg38850#msg88888888Quote"> from: nonattender on December 03, 2016, 03:07:13 AM

[TravelingPennies]

https://forum.lendacademy.com/index.php?topic=4201.msg38851#msg88888888Quote"> from: rawraw on December 03, 2016, 03:15:23 AM

[TravelingPennies]

https://forum.lendacademy.com/index.php?topic=4201.msg38852#msg88888888Quote"> from: nonattender on December 03, 2016, 03:56:35 AM

[TravelingPennies]

Don't think have to jump to not-yet-extant products like mortgage to see efficiency:  Consumers already benefit from the pressure placed on banks by "fintech" reintroduction of the personal loan.  Just happens that fintech - for a minute - was able to drive the rates down on a big chunk of those, forcing "banks" to meet/compete with those product offerings.  Tide has now turned and the bank response to fintech has been to begin offering personal loans at equal or lower rates *and without origination fees* - which is a huge win for consumers, but wouldn't have happened without the pressure placed on them to stay competitive with the new "fintech" players - who are now behind...

Don't get me wrong... I am willing to hear out both sides.  I just want to make sure some benefit accrues to the consumer from all of this, otherwise, I am (and so will regulators be) disinclined to act on the matter.  The "special" benefit to consumers needs a really good case.

Already, I suspect that if "fintech" gets access to a lower cost of capital, "fintech" will decide to further abandon retail investors - take the newfound spread that they make on capcost arb (to replace orig fee revenue) - and that nothing further changes.  On the flipside, fintech doesn't get access to lower capcosts (somehow), then the pressure on banks to compete at these 'lower' lending rates may dissipate.

So... I'm open... but not sold.  And I'm listening - as always.

[TravelingPennies]

https://forum.lendacademy.com/index.php?topic=4201.msg38846#msg88888888Quote"> from: nonattender on December 03, 2016, 02:30:43 AM