Wise U.S. banking licence bid rejected over compliance deficiencies

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Wise U.S. licence rejected

Highlights

Wise's application for a U.S. banking license was rejected by the Office of the Comptroller of the Currency due to deficiencies in anti-money laundering compliance and lack of fiduciary expertise.
Wise shares dropped 9 per cent on Friday following the news, compounding past pressure from a 20 per cent decline during Belgian anti-money laundering investigations.
Wise's U.S. unit was fined $4.2 million last year for violations of the Bank Secrecy Act, highlighting ongoing regulatory scrutiny for fintechs seeking U.S. banking licenses.

Regulatory objections to Wise’s application

As reported by Financial Times, the Office of the Comptroller of the Currency says Wise’s U.S. business does not demonstrate a comprehensive understanding of money laundering rules or of U.S. banking law and related responsibilities. In its letter, the regulator also says Wise U.S. lacks historical experience with fiduciary activities and that the proposed management and directors do not show sufficient expertise in the fiduciary activities of national banks.

The OCC says it cannot conclude that the proposed national trust bank would have an effective anti-money laundering and countering the financing of terrorism compliance programme for conducting business in the U.S. until Wise addresses existing deficiencies. Wise says its business and compliance maturity have evolved significantly since the original application was submitted more than a year ago, and that the letter refers to historical issues in that earlier filing.

Wise also says the application is now outdated because of President Donald Trump’s Genius Act, which regulates cryptocurrency companies. The company says it has informed the OCC that it intends to submit a fresh application for a national trust bank charter under the Genius Act framework, which it expects will support a similar goal of accessing the federal payments network.

Market and sector implications for fintech licensing

Investors react negatively to the rejection, with Wise shares down 9 per cent in morning trading on Friday. The setback adds to broader regulatory pressure on the group after its shares fell as much as 20 per cent in a single day last month amid investigations by Belgian authorities into potential money laundering offences and the possible use of its accounts by international criminal groups.

Wise’s U.S. subsidiary was also fined $4.2 million last year after U.S. regulators found it breached the Bank Secrecy Act and anti-money laundering laws under counter-terrorism financing rules. Even so, the OCC under the Trump administration takes a lighter-touch approach to banking licence approvals for fintechs, with Revolut and Klarna also applying for similar accreditations.

Founded in 2011, Wise specialises in cheap or free international money transfers and has 19 million users globally. The failed application underscores how compliance standards remain a central hurdle for fintech groups seeking deeper access to the U.S. banking system.

In our earlier report, we covered new U.S. Treasury sanctions targeting alleged fundraising and money-transfer networks linked to Hamas, including individuals and entities operating through sham charities and trading firms. We noted that the designations expand compliance risks for banks and payment intermediaries by prohibiting dealings with blocked property and raising the threat of civil, criminal, and secondary sanctions for facilitating prohibited transactions.

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