One of the most controversial contemporary issues in financial regulation involves who should get access to a federal banking charter. Chartering was how regulators maintained a congressionally mandated separation between banking and commerce. Today, however, the regulatory perimeter barely exists—but it is not because of overweening banks using their balance sheets to manipulate their way into commerce, but the entry to nonbanks into banking.
Large commercial firms offer their customers deposit accounts, debit and credit cards, direct deposit for paychecks, and payments processing. Financial technology firms, or fintechs, increasingly offer a suite of some or all of the trinity of banking services—taking deposits, making loans, and processing payments. Other nonbanks now handle much or most of what used to be the core of banking, including mortgage origination and commercial lending. For their part, the big bank evasions of the regulatory perimeter are not new—they offer investment banking, compete with mutual funds, and can market other financial products, but have done so for a while. To be sure, the regulatory perimeter has always been porous—the very traditional trust charter has allowed banks to offer services outside the banking trinity, and nonbanks a way to participate in some services traditionally
offered by banks. But those tools had never been interpreted to permit the mixing of commerce and banking allowed today.
This Article offers a host of takeaways. It shows how the always porous regulatory perimeter is now being breached by a varied mix of commercial firms taking on banking responsibilities. It proposes that a new, intentionally, rather than haphazardly, permeable regulatory perimeter be rebuilt through the offering of a variety of ‘skinny charters,’ including fintech charters, payments charters, and perhaps also deposit and lending charters. It takes a deep dive into the history and present of the trust charter, one of the oldest ways that banks and nonbanks traversed the regulatory perimeter, and a likely future sources of charters for fintechs. Moreover, thinking these policies through provides an opportunity to assess the undertheorized role of licensing in administrative law, which, this article argues, is prone to becoming the sort of common law regime licensing was designed
to replace. It makes that case by through a quantitative analysis of federal bank licensing decisions that establishes, through the application of plagiarism software, that licensing decisions look like one another—that parts of them follow precedent. A looser regulatory perimeter would better reflect the way financial services are offered now, and increase competition in banking services, while maintaining the traditional license for the most dangerous kinds of banks.

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