New York State Department of Financial Services Superintendent Submits Comment Letter to US Office of the Comptroller of the Currency Opposing Proposed Special Purpose National Bank Charter for FinTech Companies

A&O Shearman
Contact
LinkedIn
Facebook
X
Send
Embed

Shearman & Sterling LLP

NYSDFS Superintendent Maria T. Vullo submitted a comment letter opposing the OCC’s proposal to create a new national bank charter for FinTech companies. Vullo noted that a one-size-fits-all federal charter will not work to create a level-playing field among all financial services companies, or to alleviate risks. Rather, she argued, the proposal increases risk, creates an opportunity for regulatory arbitrage and attacks states sovereignty.

The letter provides that the OCC has never regulated nonbank financial institutions, and that state regulators like NYSDFS are experienced and therefore better equipped to regulate cash-intensive nonbank financial service companies. Furthermore, the NYSDFS argued that the National Bank Act does not provide the OCC with authority to create this new proposed charter, which would create an entirely new federal regulatory program resulting in regulatory uncertainty and possible evasion of important state consumer protection laws. The letter also notes that a national charter would likely stifle, rather than encourage innovation, since it would provide a means for large “too big to fail” firms to control the development of technology solutions, thereby harming existing banks and small businesses seeking to serve local communities.

NYSDFS has called on state regulators, legislators and other policymakers to oppose the OCC’s proposed special charter and support the nation’s strong state-based regulatory system.

View NYSDFS comment letter.
Send Print Report

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© A&O Shearman | Attorney Advertising

Written by:

A&O Shearman
A&O Shearman
Contact
more
less

PUBLISH YOUR CONTENT ON JD SUPRA NOW

  • Increased visibility
  • Actionable analytics
  • Ongoing guidance

A&O Shearman on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign Up Log in
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide