A Warning for Fintech’s Banking Partners
Blue Ridge Bank case points to increased regulatory scrutiny
The fintech industry — those high-tech, often app-based financial services — is big business. The industry, though, depends on a merger of smart technology and a banking infrastructure.
Since starting and operating a bank takes a lot of time and requires a lot of attention to regulatory detail, fintech companies often work with existing banks in a “rent-a-bank” or “banking-as-a-service” model.
This allows the tech app to quickly get to market while providing the bank with a new revenue stream.
Of course, as a new territory, it is (or has been) unclear how banking regulators will deal with the challenges of these new financial services players.
Jason Mikula over at Fintech Business Weekly shares the story of Blue Ridge Bank and a recent regulatory action by the Office of the Comptroller of the Currency (OCC). In short, bank regulator OCC is seeking to rein-in Blue Ridge’s offerings. The move is also seen as a…
