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Technology Start-Ups to Get a License to Bank

Regulators are planning to create a new type of banking license that will allow technology companies that provide financial services to expand more quickly across the country.

The plans for the new type of bank license were announced on Friday morning by the comptroller of the currency, Thomas J. Curry, after months of public discussion about the possibility.

The licenses, called special purpose national bank charters, from the Office of the Comptroller of the Currency, which oversees many national banks, will be available to companies like Square and Lending Club that accept deposits, facilitate electronic payments or lend money.

Many technology firms have been pushing for some sort of new regulatory system that would allow them to cut through the patchwork of state and federal laws that govern financial activities and make it hard to expand nationally.

The introduction of a special charter for these companies underscores how quickly they are growing and how significant they are seen to be to the future of the financial industry.

“Providing a national charter to those responsible innovators who seek one and meet our high standards can help promote economic growth across the country and recognizes that technology-based products and services are the future of banking and the economy,” Mr. Curry said in a speech at Georgetown University.

But consumer advocates and state banking regulators have already been expressing concern that a new national charter could allow start-ups to get around state laws intended to protect consumers in areas like payday lending.

“There is enormous opportunity for consumers from a more competitive financial marketplace,” said Joe Valenti, the director of consumer finance at the Center for American Progress, a left-leaning research firm. “But I’m not sure that outweighs the risk of upending various state laws and consumers’ protections.”

Mr. Valenti said that any weakening of state laws could be a particular problem at a time when the incoming president, Donald J. Trump, has promised to broadly cut back federal financial regulations.

Mr. Curry acknowledged some of these concerns in his speech on Friday, but he argued that the competition in the financial industry is broadly driving down the prices of financial products and opening access to the financial system for lower-income people who used to be shut out.

“What excites me most about the changes occurring in financial services is the great potential to expand financial inclusion, reach unbanked and underserved populations, make products and services safer and more efficient, and accelerate their delivery,” Mr. Curry said.

The financial industry has been shaken up in recent years by tech start-ups that have taken on business services that were traditionally restricted to banks, such as lending and electronic payments.

Mr. Curry noted that the amount of investment going into these so-called fintech companies has risen to $24 billion a year from $1.8 billion five years ago.

Companies like Venmo, which has a mobile app people use to make electronic payments to each other, and Lending Club, an online loan marketplace, have been changing the ways Americans expect to receive financial services.

The fintech charters will not be required of all technology firms moving into the financial realm.

But the licenses allow fintech firms to expand broadly across the country under a single regulator. Many financial start-ups have complained about the need to comply with a patchwork of state rules, which can hinder growth.

Mr. Curry’s agency will not begin offering the charters until after a public comment period that ends in January 2017.

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