May 12, 2017
STATEMENT BY SUPERINTENDENT MARIA T. VULLO ON THE DEPARTMENT OF FINANCIAL SERVICES LAWSUIT CHALLENGING THE OCC’S UNAUTHORIZED DECISION TO GRANT “SPECIAL PURPOSE” NATIONAL BANK CHARTERS TO UNDEFINED “FINTECH” COMPANIES
"The Department of Financial Services today filed a lawsuit in New York federal court challenging the decision of the Office of the Comptroller of the Currency (OCC) to grant special-purpose national bank charters to undefined “fintech” companies. The complaint seeks to stop the OCC from granting charters to institutions subject to New York State law that provide financial services to New York consumers based on the OCC’s unidentified and sweeping array of commercial ventures never before authorized or regulated by the OCC. The New York State Department of Financial Services (DFS) previously issued comment letters opposing the OCC’s white paper and its licensing manual supplement. In addition, DFS issued a statement in support of the recent lawsuit against the OCC filed by the Conference of State Banking Supervisors."
"The OCC’s charter decision is lawless, ill-conceived, and destabilizing of financial markets that are properly and most effectively regulated by New York and other State regulators. This charter puts New York financial consumers – and often the most vulnerable ones – at great risk of exploitation by newly federally chartered entities seeking to be insulated from New York’s strong consumer protections. DFS will continue to protect New York’s markets and consumers."
State regulators like DFS are experienced at, and better equipped to, regulate cash-intensive nonbank financial service companies. Such regulation requires, among other things, strict oversight and enforcement of anti-money laundering, consumer identification and transaction monitoring statutes and regulations, for which the OCC is not equipped nor authorized.