Pub. 1 2021 Issue 2

April 2021 | 35 States are also experimenting with special-purpose charters. The Wyoming Division of Banking, for example, recently granted special-purpose depository institution charters to digital assets firms Kraken Financial and Avanti Bank. However, it is not always clear whether institutions granted a special-purpose or other type of novel charter are eligible for federal deposit insurance, access to the payments system, or access to the discount window. Encouraging Innovation State and federal regulators are also working behind the scenes with fintech firms, sharing information and providing opportuni- ties to experiment with product offerings. Innovation hubs like the FDIC’s FDiTech and the Federal Reserve’s Fintech Innovation Office Hours provide standing opportunities for fintech firms and traditional banks to get answers to their regulatory questions about fintech. The regulatory sandboxes launched in several states allow fintech firms to test their products with the public before licensing and registration. More than half of all states have joined the Multi- state Money Services Businesses Licensing Agreement, a program launched by the Conference of State Bank Supervisors that seeks to simplify and harmonize the money transmitter licensing process. Looking Ahead As the banking landscape continues to evolve and bank customers embrace new technologies, banks and other businesses will seek new ways to efficiently and innovatively offer their products and services. Institutions will choose the structure that they feel works best for them to accomplish their business goals. Although not all banking services innovations are taking place in the banking system, state and federal regulators are working with banks and fintech firms to find ways to ensure these innovations and activities can operate in the regulated banking system. ■ Carl White Senior Vice President Carl White has 32 years of experience in the Supervision Division of the Federal Reserve Bank of St. Louis. He is currently senior vice president of the Supervision, Credit, Community Development and Learning Innovation Division. He has served in various other roles within Safety and Soundness, beginning his career as an examiner. Mr. White has served as lead instructor and course developer on numerous Fed System training courses, including an international assignment in Brazil. In addition, he served as the central point of contact for the District’s largest state member bank before and during the financial crisis. He and his team were nominated for the District’s President’s Award for Innovation as a result of efforts to implement and enhance off-site loan review and examination processes. Mr. White holds a bachelor’s degree with a major in finance from St. Louis University. 1. Bank regulators' authority to examine and regulate third-party ven- dors, including fintech firms, is outlined in the Bank Service Company Act and the Gramm-Leach-Bliley Act. For more details on this issue, see this Congressional Research Service report (PDF). 2. Varo, based in San Francisco, obtained its national bank charter in July 2020. 3. The Competitive Equality in Banking Act of 1987 exempts most parent companies of ILCs from being considered bank holding companies, thus relieving them of oversight by the Federal Reserve. The complete list of permissible banking activities differs by ILC chartering states. Reach your customers with print. To advertise in this magazine, contact us today. 727.475.9827 | 855.747.4003 kris@thenewslinkgroup.com Magazines are the perfect tool to entice and hold your members’ attention. Reach your customers with print. To advertise in this magazine, contact us today. 727.475.9827 | 85 .747.40 kris@thenewslinkgrou . o Magazines are the perfect tool to entic and hold your members’ attention. Reach your customers with print. To advertise in this magazine, contact us 727.475.9827 | 855.747.4003 kris@thenewslinkgroup.com Magazines are the perfect tool to entice and hold your members’ attention.