A top regulator, ‘Thomas Curry’ from the Office of the Comptroller of the Currency revealed -Fintech firms shall be treated as ‘special purpose national banks’.

The agency would for the first time start granting banking licenses to “Fintech” firms, giving them greater freedom to operate across the country without seeking state-by-state permission or joining brick-and-mortar banks to function.

This regulatory response is open to public comment through Jan. 15 and is expected to create tremors in the banking industry, followed by deliberations inside the OCC. Will this first U.S. federal regulator to allow non-bank Fintech firms to fly on its gradual own, who for now relies on a symbiosis with larger brick & mortar banks, including the state-by-state permissions and other capital requirements, and more.

This may be the first, of many more volleys of regulation challenges, bureaucratic debates, and stakeholder jousting. The eventual political opinion/actions shall determine, if US banking and Fintech firms are to be equals.

This move by regulators, since Dodd-Frank have been working hard at seeking an equilibrium between innovation, consumer choices, unmet consumer choices, while extending traditional protections to new and booming financial products which began to emerge, post 2008 Financial crisis.

The proposed move was cheered by the tech sector who had long been seeking independence, but frowned upon by financial institutions, some consumer groups and state regulators who see threats in reversing the traditional order.

A legislative/executive action may possibly determine, if US banking and Fintech firms are to be equals.