Set Out Currency Charter For Free

The main difference is whether the permit to do business as a bank was granted by the state government or the federal government. Whenever a new bank organization is started, the owners apply for either a state or national (federal) bank charter.

Fintechs that pursue their own charter may benefit from greater consumer trust resulting from federal regulatory supervision and other banking privileges. While many fintechs serve consumers effectively through a partnership with a bank, other fintechs can better serve consumers by pursuing a bank charter.

Next, here's a look at what a federally chartered bank is. It's a bank that receives its charter from the federal government. The Office of the Comptroller of the Currency is responsible for regulating nationally-chartered banks and savings associations. The OCC is an independent branch of the Treasury Department.

Applying for a Bank Charter The proposed bank must first receive approval for a federal or state banking charter. Before granting a charter, the chartering regulator must determine that the applicant bank has a reasonable chance for success and will operate in a safe and sound manner.

The Dual Banking System National banks are chartered and regulated under federal laws and are supervised by a central agency. State banks are chartered and regulated under state laws and are supervised by a state agency.

A bank's actual charter lays out operational guidelines for the bank, along with how it will comply with relevant regulations. This might include how the bank will maintain a certain minimum capital requirement.

A bank charter is effectively a business license that is required for depository institutions and certain financial institutions providing other bank-like services.