Wise Shares Slide After US Banking Charter Application Rejected
Wise(WISE)shares fell 7. 8% on Friday after the US Office of the Comptroller of the Currency (OCC) denied its application for a national trust bank charter, creating a setback for the money transfer company as. . .
Wise(WISE)shares fell 7. 8% on Friday after the US Office of the Comptroller of the Currency (OCC) denied its application for a national trust bank charter, creating a setback for the money transfer company as it seeks to expand its presence in the US financial system. The London-based firm had applied for the charter more than a year ago in an effort to gain greater access to US payment infrastructure and operate as a fiduciary institution, providing services including custodial, safekeeping and settlement functions. Wise said the OCC decision related to historical issues connected to its original application, adding that its business operations and compliance framework have improved significantly since the submission was made. The company said it had responded to feedback from the OCC throughout the review process, including improvements to controls designed to prevent financial crime and manage other risks. “Preventing bad actors from using financial institutions like Wise is of the utmost importance to us,” the company said, adding that it had invested heavily in strengthening its compliance systems across both the US and global operations. The rejection does not affect Wise’s existing services in America, as the company continues to operate through its current money transmitter licences, allowing customers to send and receive funds as normal. Wise said the original application was also impacted by changes in US financial regulation, particularly around access to Federal Reserve payment systems. The company’s submission depended on gaining direct access to Federal Reserve master accounts, but changes to policy around uninsured trust banks made that approach no longer viable. The payments group also highlighted the introduction of the Genius Act, officially known as the Guiding and Establishing National Innovation for US Stablecoins Act, which created a regulatory framework for payment stablecoins in the US. Wise said it intends to submit a new application under the updated regulatory framework, which it believes will better reflect its current operations and the changing requirements of the US payments sector. The setback comes only months afterWise moved its primary stockmarket listing from London to New York in May, aiming to access a larger investor base while retaining a secondary listing in the UK. Founded in 2011 as TransferWise, the company has grown into one of the world’s largest digital money transfer providers, with 12 million people and businesses using its services in the latest quarter. Despite continued growth in customer numbers, Wise shares have struggled over the past year, falling 19. 7% over the last 12 months as investors have monitored regulatory hurdles and expansion costs. The company said it remains committed to investing in its UK operations while continuing its international growth plans.