It might be time to take another look at the regulations that keep banking companies separate from other commercial activity, Acting Comptroller of the Currency Keith Noreika said during an industry conference yesterday.
The divide between the two industries has historically protected consumer money from being used in “risky,” non-bank enterprises, but it has also protected banks from losing those customers to an Amazon, a Facebook, or an Apple.
However, Noreika, who is currently serving as the acting head of the OCC, said that it might be time to take a look at whether that separation is continuing to serve economic growth. Noerika said:
Such dogma props up bureaucracies that maintain the separation and serves the interest of the status quo without regard to why the separation exists in the first place or whether the separation has any usefulness for today’s economy.
If regulators removed that division, larger tech companies could gain a greater foothold in the financial services ecosystem. However, while the OCC could grant bank charters to financial technology firms, truly eliminating that divide would require concentrated action by other regulators.