OCC Releases White Paper on FinTech and Responsible Innovation

On Thursday, March 31, 2016, Comptroller of the Currency Thomas Curry in a speech at Harvard Kennedy School's New Directions in Regulation Seminar released a long anticipated white paper entitled: "Supporting Responsible Innovation in the Federal Banking System: An OCC Perspective." 

The white paper published the OCC's definition of responsible innovation, which is "[t]he use of new or improved financial products, services, and processes to meet the evolving needs of consumers, businesses, and communities in a manner that is consistent with sound risk management and is aligned with the bank's overall business strategy."  The agency released the following eight principles as a framework it intended to use to evaluate innovative financial products and services, including:

  • Supporting responsible innovation;
  • Fostering an internal culture receptive to responsible innovation;
  • Leveraging agency experience and expertise;
  • Encouraging responsible innovation which provides fair access to financial services and treatment of consumers;
  • Furthering safe and sound operations through effective risk management;
  • Encouraging banks of all sizes to integrate responsible innovation into their strategic planning;
  • Promoting ongoing dialogue through formal outreach; and
  • Collaborating with other regulators. 


The remainder of the white paper provides an in depth description of each principle. Regarding future OCC actions, the OCC indicated it may:

  • Assess current and potentially issue guidance on new product and third party risk management;
  • Streamline license procedures;
  • Consider permitting pilot projects for innovations;
  • Issue guidance on products and services to reach low and moderate income individuals; and
  • Encourage innovative approaches to financial inclusion which may qualify for Community Reinvestment Act consideration. 


Further, the OCC stressed the importance of collaborating with other banking agencies, specifically citing the CFPB, and indicated the ways it intends to do so.

The white paper presents nine questions regarding responsible innovation with a request for comments, which are due by May 31, 2016.  CBA plans to offer a response.


The OCC also announced it will host a forum on responsible innovation on June 23, 2016, at Constitution Center in Washington, D.C. During the event, the agency will discuss comments received on the white paper and lead discussions regarding financial services innovation. The agency plans to release details on the agenda and how to register in April.


Click here to view CBA President and CEO Richard Hunt's statement on the OCC's white paper and the Comptroller's remarks.