Given the heavily regulated nature of financial services in the United States, it should not be a surprise that one of the biggest challenges facing the “fintech” industry is regulatory uncertainty. As explained by the General Accounting Office GAO) in its March 2018 study, Financial Technology: Additional Steps by Regulators Could Better Protect Consumers and Aid Regulatory Oversight (GAO 3/18 Study):

The U.S. regulatory structure poses challenges to fintech firms. With numerous regulators, fintech firms noted that identifying the applicable laws and how their activities will be regulated can be difficult. Although regulators have issued some guidance, fintech payment and lending firms say complying with fragmented state requirements is costly and time-consuming.

Based on this, one of the key recommendations made by the U.S. Treasury in its July 31, 2018 report, A Financial System That Creates Economic Opportunities-Nonbank Financials, Fintech, and Innovation(“Treasury Fintech Report”) was the following: Treasury recommends that the OCC move forward with prudent and carefully considered applications for special purpose national bank charters. OCC special purpose national banks should not be permitted to accept FDIC-insured deposits, to reduce risks to taxpayers. The OCC should consider whether it is appropriate to apply financial inclusion requirements to special purpose national banks. The Federal Reserve should assess whether OCC special purpose national banks should receive access to federal payment services.

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