Wise US banking licence denial puts AML controls in focus

Wise US banking licence plans took a public setback after the U.S. Office of the Comptroller of the Currency denied its application for a national trust bank charter. Communications adviser Neil Martin wrote on Finextra that Wise’s share price fell 10% on the Friday the decision was announced, while subsequent coverage focused on anti-money laundering controls, supervisory issues and the company’s argument that the application can be revised.

A national trust bank charter is an OCC authorisation for a company to operate as a federally chartered trust bank in the United States. For a fintech such as Wise, approval would have provided a regulated federal route for trust-bank activities; denial means the company must either reapply or proceed without that charter.

According to Martin, Wise said the OCC communicated that the application had been denied “at this time.” Wise also said its business and compliance maturity had changed since the application was originally filed more than a year earlier, and that the OCC’s letter referred to historical issues in the original submission that the company had been addressing.

Why was Wise denied a US banking licence?

Martin’s review of the coverage found that several outlets framed the denial around compliance shortcomings. Platform AML Intelligence said Wise had been refused a US banking licence because of poor anti-money laundering controls and deficiencies in its programmes, according to Martin.

The Banker described the rejection as linked to longstanding weaknesses in Wise’s anti-money laundering controls and gaps in its understanding of banking law, Martin wrote. Forbes presented the episode as a setback tied to supervisory and compliance issues, including AML and counter-terrorist financing controls and leadership experience. The Wall Street Journal also focused on anti-money-laundering deficiencies and the share-price reaction, according to Martin’s summary.

Wise’s own position, as described by Martin, was that the denial related to issues in the original application and to a changed regulatory setting. The company said it intended to submit a viable application to the OCC later, reflecting its expanded business and regulatory changes.

How did markets and media respond?

The market reaction was immediate, with Martin reporting a 10% fall in Wise’s share price on the announcement day. He argued that the drop showed investors treating the decision as more than a procedural delay, though he also said the media response was less damaging than it might have been given the nature of the news.

Reuters took a more neutral line, Martin wrote, reporting Wise’s explanation that the application had been denied amid significant policy changes and that the company viewed the original approach as no longer viable in the new Federal Reserve environment. Reuters also noted Wise’s plan to reapply under the GENIUS Act framework, according to Martin.

Yahoo Finance and Dow Jones also included mitigating context, Martin wrote. Yahoo Finance reported Wise’s statement that the denial related to historical issues and that normal US services would continue. Dow Jones stated that the charter had been denied while noting Wise’s plan to file a revised application and that the decision did not affect ordinary operations.

Martin concluded that the most negative coverage treated the OCC decision as evidence of compliance weakness, while more balanced reports put greater weight on Wise’s explanation, its intention to reapply and the continuity of its existing US business. He said the company still faces the task of addressing the compliance narrative that emerged from the denial.

This story draws on original reporting from Finextra Research.