On July 21, the OCC denied an application to charter a subsidiary national trust sponsored by the U.S. holding company of a U.K.-based global payments provider, which had proposed to offer stored value accounts with debit cards, payments processing, and fiduciary services. The OCC found the applicant did not demonstrate the trust bank would operate in compliance with applicable law, citing a public multistate consent order the payments provider’s U.S. subsidiary became subject to less than a month after filing the application, which identified numerous alleged BSA/AML program deficiencies and subjected the trust bank to an administrative penalty of $4.2 million; the OCC noted such enforcement actions are important to, but do not ultimately control, its charter decisions. The OCC said it could not conclude the trust bank would maintain an effective BSA/AML program until the sponsor addresses those deficiencies and develops an enhanced enterprise-wide program, particularly since, in the OCC’s assessment, the new bank would be a “small aspect of a larger enterprise” seeking to scale. It further noted the trust bank would face AML/CFT requirements applicable to banks, stricter than the money-services-business requirements applicable to the affiliated money transmitter, whose purported record of noncompliance with those lesser requirements undercut any conclusion that the trust bank could meet the higher standard, according to the OCC.

The OCC also found that the organizers failed to demonstrate sufficient familiarity with national banking laws, citing the enterprise’s alleged long-standing AML/CFT deficiencies and its failure to select directors and management with sufficient AML/CFT experience. The OCC further found that the proposed services carry high inherent money laundering and illicit finance risks that, in its view, the proposed management and board had persistently failed to manage, and that management and the board lacked sufficient competence for the bank’s proposed fiduciary activities, noting the affiliated money transmitter’s lack of fiduciary experience. Citing its determination that a significant supervisory or compliance concern existed and that approval would be inconsistent with its chartering policies, the OCC denied the application, though it noted the denial does not preclude a future de novo charter application.