ANALYSIS: Does OCC, FDIC Deregulation Favor Federal Banks?

Trump administration federal banking regulators are working to remove what their new acting heads see as unnecessary barriers to financial innovation, which may end up harming state banks.

Under the two-tiered bank regulatory system in the US, the Office of the Comptroller of the Currency (OCC) licenses national banks and federal savings banks and the Federal Deposit Insurance Corporation (FDIC) oversees similar regulation of state banks that obtain the FDIC’s deposit insurance.

Since Trump’s inauguration, both entities have relaxed banking regulations aimed at the financial technology industry, but the federal effort has no state analogue. This disparity may incentivize fintech ...