On August 4, the OCC denied a Dutch fintech’s application to establish a new national bank in New York, citing “significant supervisory and compliance concerns.” According to the OCC, the proposed bank would have offered deposit accounts and unsecured credit cards through a subscription-based model for personal and business users, with revenue primarily from monthly subscription fees and card network interchange payments. In denying the application, the OCC cited uncertainty about initial capitalization, noting that revised projections increased proposed initial capitalization from $50 million to $58.3 million without supporting details or assumptions. The denial follows the agency’s July decision denying a different fintech’s charter application over alleged BSA/AML compliance deficiencies pertaining to a prior state enforcement action (previously covered by InfoBytes here).

Specifically, the OCC asserted that the fintech’s application did not demonstrate sufficient capital to support the proposed bank’s projected volume, risk profile and business type, and the proposed allowance for credit losses and related assumptions were unsupported based on peer analysis. Other cited deficiencies included gaps in management, organizer and director experience with unsecured credit cards and national banking laws and regulations, as well as business and marketing plans that the OCC concluded did not adequately support expected profitability or safe and sound operations in the U.S. market. The OCC also found that the application presented risk to the Deposit Insurance Fund and cited transparency concerns regarding inconsistencies in management communications, while noting that the denial does not prohibit a future de novo charter application and may be appealed in writing to the OCC’s ombudsman.