Legal

NY Bank Regulator Calls Out OCC In Lawsuit

The U.S. Office of the Comptroller of the Currency’s (OCC) plans to offer up charters allowing online lenders and FinTech companies to conduct business on a national level may be running into a wall.

Just this past Friday, Reuters reported that New York state’s banking regulator took action against the U.S. OCC in a lawsuit alleging the plan’s country-wide charters were bad for business. The New York Department of Financial Services’ superintendent, Maria Vullo, commented on this plan by stating it was “lawless, ill-conceived and destabilizing of financial markets” typically state-run.

It also claims the use of these charters is out of the agency’s authority bounds underneath the National Banking Act.

Through this New York regulator complaint, it’s hoping to put a halt to offering these charters. If these charters are allowed to move forward, the New York regulator says internet lenders would have the power to significantly hike up borrowers in the state by being in states with higher rates.

In accordance with the U.S. OCC’s plan, firms are now required to be licensed in every state in which they do business.

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