OCC Clarifies Charter Rule and Extends National Path for FinTechs

For much of the past decade, many FinTechs relied on sponsor-bank arrangements and state licensing frameworks to deliver accounts, payments and lending products. That model has grown more intricate. Third-party risk management guidance issued in 2023 raised supervisory expectations for banks that partner with FinTech programs, increasing due diligence obligations and tightening oversight.

And amid the constantly shifting digital banking and payments landscape, and regulatory developments, some firm have been moved to consider whether direct federal charters offer greater operational certainty.

Against that backdrop, on Friday (Feb. 27), the Office of the Comptroller of the Currency (OCC) issued a final rule amending 12 CFR Part 5 to clarify its authority to charter national banks limited to “the operations of a trust company and activities related thereto.”

The rule becomes effective April 1.

What the OCC Changed

The core revision replaces the term “fiduciary activities” in § 5.20(e)(1)(i) with the statutory phrase drawn from 12 U.S.C. 27(a): “the operations of a trust company and activities related thereto.”

In its explanation, the OCC stated that the amendment is intended to eliminate potential confusion created by earlier regulatory text and to align its rule more closely with the National Bank Act. The agency emphasized that it neither expands nor contracts its statutory authority to charter national banks; rather, it clarifies the legal standard governing national trust banks.

The distinction carries practical consequences. The OCC has long supervised national trust banks, many of which conduct non-fiduciary custody and safekeeping activities in addition to fiduciary services.

By explicitly referencing “operations of a trust company and activities related thereto,” the rule confirms that trust-chartered national banks are not confined solely to traditional fiduciary function, which in turn offers a bit of runway for an expanded scope of activities.

Read Across for FinTechs

For FinTech executives weighing a charter, the revised language sharpens the strategic picture. As described in prior PYMNTS coverage, and in an interview with Competition Policy International (CPI), the national charter “provides a lot of operational efficiencies, so that you essentially get to play by a uniform set of rules and gain access to a national scale rather than having to comply with really what is a patchwork of lots of different state regulations,” as Nixon Peabody Partner Andrew C. Glass observed.

That uniform rulebook is particularly relevant for firms offering accounts, payments and custody services across multiple states. A national charter situates the institution under a single primary federal regulator rather than a state-by-state licensing regime.

Under the dual banking system, entities engaged in the business of banking may pursue either federal or state charters.  A national bank charter issued by the OCC operates under the National Bank Act and carries federal preemption benefits that can simplify multi-state operations.

By contrast, state-chartered institutions, including industrial loan companies, remain subject to both state oversight and federal supervision, typically by the FDIC, and may not enjoy the same degree of uniform national treatment.

It also places the institution squarely within the supervisory perimeter applied to national banks, including examinations for safety and soundness and anti-money laundering compliance.

The trade-off is equally clear. Chartering entails capital commitments, Bank Secrecy Act and also the potential for constraints on affiliate activities.

The OCC underscored in its rulemaking record on Friday that applications will be evaluated within the confines of the National Bank Act and on a case-by-case basis.

For FinTechs that concentrate on custody, payments or specialized account structures, the national trust bank model has served as a limited-purpose pathway. The final rule clarifies that such institutions may conduct activities that fall within the operations of a trust company and activities related thereto, provided those activities are otherwise authorized by statute.

Why FinTechs Would Seek the Charter Now

The charter decision is increasingly strategic rather than experimental. In an environment where regulatory expectations around third-party relationships have intensified, some firms calculate that direct oversight, though demanding, may offer greater resilience.

On April 1, the amended language becomes effective.

While the statutory authority itself remains unchanged, the clarified regulatory text may reduce interpretive ambiguity for applicants structuring and pursuing trust-bank charters that include both fiduciary and non-fiduciary components. For FinTechs evaluating national accounts, custody services or payments platforms under a federal charter, the rule provides a clearer statement of the path that lies ahead.