Brian Brooks defends the fintech charter before the House Financial Services Committee
Brian Brooks has defended the enacted fintech banking charter while serving as acting controller of the currency after Congressional Democrats sought the license on Thursday.
Brian stood as a witness before the Consumer Protection and Financial Institutions Subcommittee of the House Financial Services Committee at an April 15 hearing entitled “Banking Innovation or Regulatory Evasion? Exploring trends in financial institution charters. “
The Fintech Charter was introduced by the Office of the Currency Auditor (OCC) and overseen by Brooks in 2020. It allows financial technology companies, including cryptocurrency companies, to offer credit and payment products without being overseen by government banking regulators, FDIC insurance companies, or other customer deposits.
California Representative and Chair of the House Financial Services Committee, Maxine Waters, alleged banks and state regulators have complained about the lack of regulatory oversight faced by fintech companies licensed under the Charter:
“Government regulators, community banks and credit unions have sounded the alarm as new businesses, including large technology firms, obtain unconventional bank certificates and offer banking products and services while evading the regulations that most banks, including community banks, must comply with.”
Waters characterized the OCC as “exceeding its authority” and accused the office of “pretending that the laws signed by Abraham Lincoln were intended to create charters for fintech or cryptocurrency”.
However, Brooks informed the committee that the charter had strengthened oversight of the fintech and crypto industries, arguing that otherwise their activities would continue outside the sight of regulators.
Brooks described the charter as empowering companies “to offer consumers better alternatives to traditional banks on the one hand and strip mall financiers such as payday lenders on the other.”
Other Democrats have raised concerns that Bitcoin is primarily a vehicle for criminal syndicates. Brad Sherman of California claims that the crypto-asset is mainly used by “tax evaders” and “narcoterrorists”. Al Green of Texas also raised his constituents’ concerns about the proliferation of Ponzi schemes in the crypto sector.
Brooks dismissed these concerns, arguing that foreclosure provisions could hamper the technological dynamism of the United States and that persistent laws could undermine US soft power in the emerging digital economy:
“We are building a second Internet here – it is not intended for terrorist financing, but for a really decentralized Internet. If you believe that America’s soft power in the world has a lot to do with the fact that we control ICANN and the Internet Protocol, you would look at these new protocols similarly. ”