Rain, Modern Treasury seek OCC trust charters

Fintech firms Rain and Modern Treasury are applying for national trust charters from the Office of the Comptroller of the Currency (OCC). While this sounds like back-end banking bureaucracy, it has direct implications for how you offer financing and payments at the point of sale. Currently, most fintechs that power your 'Buy Now, Pay Later' (BNPL) or earned wage access tools have to partner with traditional banks to move money. By becoming regulated trust banks themselves, these technology providers can cut out the middleman. For a retailer or service provider, this shift could lead to more stable financing programs. When your financing partner operates under a federal charter, they face stricter oversight but also gain the ability to operate uniformly across all 50 states without navigating a patchwork of local lending laws. This usually results in faster innovation for payment products and potentially lower transaction fees, as there are fewer 'toll booths' in the payment processing chain. However, the move is currently facing legal pushback from traditional banking groups who want to limit fintech entry into the space. If these charters are granted, expect your financing partners to offer more robust, bank-like features directly within their apps, making the checkout experience smoother for your customers.

Source: Banking Dive

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