Fintechs want to become banks. Bunq just found out what the OCC expects in return.

The path for fintech companies to become full-fledged banks just got a lot steeper. The Office of the Comptroller of the Currency (OCC) is signaling that it will hold fintechs to the same grueling standards as traditional banks. For retailers and merchants, this means the 'fintech partner' model you currently use to offer consumer financing is under pressure. The OCC recently pushed back on the Dutch neobank Bunq, highlighting that high-growth tech companies often lack the internal controls, anti-money laundering protocols, and capital reserves required for a U.S. banking charter. For operators, this means the lenders you work with may face higher operational costs or be forced to remain dependent on partner banks. This 'partner bank' model is also under intense scrutiny, with regulators demanding that banks take more direct responsibility for what their fintech partners do. If your financing provider is a fintech currently seeking a charter, expect their focus to shift heavily toward compliance and risk management. This could lead to slower rollouts of new financing products or more conservative credit approvals as they try to appease regulators. The era of 'move fast and break things' in the lending space is effectively over as the OCC closes the gap between tech startups and traditional financial institutions.

Source: Tearsheet

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