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ABA Offers Feedback on OCC Innovation Pilot Program Proposal

Monday, June 17, 2019   (0 Comments)
Posted by: Amanda Averch
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ABA Friday offered support for a proposed pilot program by the OCC that would allow banks to test innovative products and programs. Under the program, OCC-supervised banks—and third parties working with those banks—may receive regulatory input early in the process of developing their product offerings, which will help develop appropriate controls during a pilot.

 

ABA has long advocated for the establishment of such programs, and noted that “if implemented properly, voluntary pilot programs can encourage banks to test new innovations and give regulators insight into new technologies while ensuring that customers remain protected in the event of unforeseen adverse consequences.” ABA emphasized, however, that the program be strictly voluntary in nature, and that adding mandatory steps to the process could actually discourage innovation within the banking system.

 

In addition, ABA flagged several areas in need of further clarification to ensure the overall effectiveness of the program. Among other things, ABA urged the OCC to clarify that banks can rely on the decisions made as part of the pilot program; the steps and expectations for the bank and the agency at the end of a pilot program; how it will share findings, best practices and other lessons learned from the pilot programs while maintaining confidentiality; and how banks can collaborate on pilots. Read the comment letter

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