In May of 1995, the OTS approved the application of a new thrift, the Security First Network Bank (“SFNB”), that sought explicitly to provide the majority of its electronic banking services over the Internet.5 In May of 1996, the Board of Governors approved the application of SFNB’s parent, a bank holding company, for SFNB to acquire a data-processing firm specializing in data processing activities that would provide nationwide banking and financial services over the Internet.6 In December of 1996, the Board of Governors approved the application of a Minnesota bank holding company and two foreign banks to join a consortium of 15 North 4  Alan Greenspan, Banking in the Global Marketplace, address before the Federation of Bankers Associations of Japan (Nov. 18, 1996). 5  See OTS Order No. 95-88 (May 8, 1995). See Cardinal Bancshares, Inc., 82 Fed. Res. Bull. 674 (1996). In this Board Order, the Board stated that “The Board believes the provision of computer banking services by SFNB to its customers in accordance with the authority granted by the OTS, and as specifically described in this proposal, is consistent with Cardinal’s existing authority under the [Bank Holding Company Act] and Regulation Y to operate a savings association.” Id. at n.1.
In 1996, when the Board of Governors issued its proposed regulations concerning the applicability of Regulation E to stored-value cards, the Board of Governors explicitly requested that commenters to the proposed revisions indicate whether the commenters believed that part or all of Regulation E should apply to electronic “money” or “value” residing on a computer system or a personal-computer hard drive.12 Similarly, the FDIC, while holding public hearings on its General Counsel Opinion No. 8 on stored-value cards and Federal deposit insurance coverage,13 specifically requested additional commentary on Federal deposit insurance coverage and electronic value represented on computer systems or personal computers. I believe the message is clear: as bank supervisors, we are open to what the banking community has to say on this rapidly evolving market. New ideas and reasoned arguments are welcome. We must try not to restrain important new services developed by the banking industry but should remain vigilant as banking-type services are offered by nonbank institutions. A Payments Systems Overseer’s View From the perspective of a payments system overseer, I see much activity, but thus far, few genuinely revolutionary innovations with respect to banking and the Internet in the United States. Mainly, I see the application of faster, cheaper electronic processing of older, more established paper-based methods of transferring payments between parties. Credit card payments on the Internet are one example.