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Brian Brooks has defended the fintech charter he supervised as chairman of the OCC, arguing that heavy-handed crypto rules could weaken the United States’ global competitiveness.
After Congressional Democrats attacked the licence on Thursday, Brian Brooks defended the fintech banking charter he launched while serving as acting comptroller of the currency.
Brian spoke before the House Financial Services Committee’s Subcommittee on Consumer Protection and Financial Institutions on April 15 at a briefing dubbed “Banking Innovation or Regulatory Evasion?” Exploring Tax Institution Charter Trends.”
The Office of the Comptroller of the Currency, or OCC, launched the fintech charter in 2020, which allows financial technology businesses, including cryptocurrency providers, to sell lending and payment options without being subject to state banking regulators, FDIC insurance, or consumer deposits.
Maxine Waters, a Californian congresswoman and the chairwoman of the House Financial Services Committee, said that banks and state regulators have protested about the lack of regulatory oversight faced by fintech companies approved under the charter:
“State regulators, community banks and credit unions have raised alarms about how new entities, including big tech firms, are receiving unconventional bank charters and offering bank products and services while evading regulations most banks, including community banks, must comply with.”
Waters accused the OCC of “exerting its authority,” accusing it of “pretending that laws signed by Abraham Lincoln were intended to create charters for fintech or cryptocurrency.”
Brooks, on the other hand, assured the committee that the charter had strengthened regulatory regulation of the fintech and crypto markets, claiming that their operations would otherwise go unnoticed by regulators.
The charter, according to Brooks, empowers companies that “provide consumers with better alternatives to traditional banks on the one hand and strip-mall financiers, such as payday lenders on the other.”
Other Democrats have expressed fear that Bitcoin is mainly used by crime syndicates, with California’s Brad Sherman alleging that the blockchain currency is primarily used by “tax evaders” and “narco-terrorists.” Al Green of Texas has expressed his constituents’ fears about the existence of Ponzi schemes in the crypto market.
Brooks rejected these concerns, maintaining that exclusionary laws could stifle technical dynamism in the United States and that heavy-handed policies could weaken US soft power in the new global economy:
“We’re building a second Internet here — it’s not built for terrorist financing, it’s built to allow us to have a truly decentralized Internet. If you believe that America’s soft power in the world has a lot to do with the fact that we control ICANN and the Internet Protocol, I think you would feel similarly about these new protocols.”