The Wall Street Journal quoted Manatt’s Brian Korn, chair of the firm’s digital finance and marketplace lending practice, for an article about a new proposal out of the Office of the Comptroller of the Currency (OCC) that would allow fintech companies to apply for bank charters.
Korn said that online lenders that obtain one of these charters from the OCC would make contracts many have entered into with outside banks unnecessary. In so-called rent-a-charter deals, online lenders including LendingClub Corp. and Prosper Marketplace Inc. have outsourced the technical parts of making a loan to regulated banks, a setup that has been called into question by recent court decisions. Under the OCC proposal, though, an online lender “doesn’t have to construct a mechanic to run a loan through a bank,” Korn said.
Read the article here.