Oversight oversight

31 March 2016 By Gina Chon Follow @GinaChon

The OCC’s foray into overseeing tech’s role in finance, the first by a U.S. regulator, is full of generalities, not specifics. That’s because the agency doesn’t police the nonbanks driving many of the changes. Resolving which watchdog is in charge would foster clearer rules.

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The Office of the Comptroller of the Currency on March 31 released a white paper outlining a possible framework for regulating financial technology. One suggestion is to create a centralized office of innovation that would vet ideas before a bank or nonbank makes a formal request to launch a new product or service. Another idea is to allow companies to test new products on a small scale before deciding to commit to a new product or service.

As part of the effort, the OCC will also assess guidance on new product development and third-party risk management, which financial-services firms have said need more clarity. The agency also requested comment and asked the public for help in addressing several questions, including how the OCC could facilitate responsible innovation by institutions of all sizes.

The OCC regulates banks that have national charters, including JPMorgan Chase, Citigroup and Wells Fargo.

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