The Office of the Comptroller of the Currency published updated chartering guidance Wednesday that creates an explicit application pathway for payments companies seeking national bank status. The guidance resolves a legal ambiguity that has blocked fintech bank charters since the Madden v. Midland Funding decision and subsequent state-level challenges.
Under the new framework, payments companies with more than $1 billion in annual transaction volume can apply for a "payments national bank" charter that authorizes deposit-taking, lending, and cross-state payments operations. The charter requires full compliance with Bank Secrecy Act, Community Reinvestment Act, and OCC safety-and-soundness standards.