Legal Seminar, Denver, CO

Fintech Charter: “Business of Banking” & OCC’s General Chartering Authority

National Bank Act 12 USC 26: “lawfully entitled to commence”

Federal Reserve Act

12 USC 222: FRS membership and deposit insurance required

Failure to do so results in forfeiture of charter under 12 USC 501a.

“Receiving deposits”

12 USC 21-23: formation of national bank

under the FDIA is indispensable to carrying on the “business of banking” under the NBA

Federal Deposit Insurance Act

12 USC 1813(h): Definition of “insured bank”

12 USC 1815: Eligibility for deposit insurance

Bank Holding Company Act (Definition of “Bank”)

12 USC 27: “legitimate objects”

Competitive Equality in Banking Act (CEBA) of 1987 redefines bank to close the nonbank bank loophole

1970 definition: “nonbank bank” loophole

IBAA v. Conover (1985)

For Discussion Purposes Only

Fintech Charter: “Business of Banking” & OCC’s General Chartering Authority: Inner & Outer Limits OCC: Conover is not good law. • NationsBank v. VALIC, 513 U.S. 251 (1995) CSBS: NationsBank is irrelevant. • Conover held that the BHCA definition of bank forms the inner limits, or minimum content, of the business of banking under the NBA.

held that the “business of banking” is not limited to the enumerated powers in Section 24(Seventh). • All prior “business of banking” decisions, including Conover , are subject to reconsideration in light of NationsBank. – Arnold Tours ; M&M Leasing • Conover is in substantial conflict with the later decision of ICBA v. FRB and subsequent legislation (CEBA).

– M&M Leasing & Arnold Tours involve “defining the outer boundaries of the business of banking.” • Inner limits : what activity or activities a national bank must exercise in order to carry on the “business of banking” (e.g. Conover ). • Outer limits : whether an activity not previously determined to be within the “business of banking” is a permissible activity for a national bank (e.g. NationsBank ).

For Discussion Purposes Only