SmartBiz Bank, N.A. (formerly CenTrust Bank, N.A.)
The OCC granted conditional approval to SmartBiz's fintech banking model, setting rigorous compliance and safety/soundness conditions. This action signals the OCC's willingness to engage with fintech-driven banking models while maintaining high supervisory standards. The conditional nature of the approval reflects ongoing concerns about the risks inherent in BaaS and fintech-bank partnerships, including third-party risk management, consumer protection, and BSA/AML compliance. SmartBiz's approval demonstrates a pathway for fintechs seeking direct or semi-direct banking relationships, but under strict regulatory oversight. The OCC news release (NR-OCC-2025-19) provides the official details of this conditional approval.
Verified from source: The OCC conditionally approved fintech company SmartBiz Loans' application to change the business model of CenTrust Bank, N.A. (renamed SmartBiz Bank, N.A.) to conduct small business lending activities on a nationwide basis, applying rigorous review and standards for new entrants to the federal banking system.
- OCC provides a supervised pathway for fintech models, potentially reducing reliance on traditional BaaS sponsor bank arrangements
- Conditional approvals set precedent for the compliance bar fintechs must meet to operate under OCC supervision
- May encourage other fintechs to seek direct regulatory relationships rather than pure BaaS partnerships