NY Regulators Unhappy With OCC’s Bank Charter Plan For FinTechs

The financial services regulator for the state of New York said Tuesday (Jan. 17) that it “formally opposed” charters that would let FinTech firms, including online lenders, operate nationwide.

As reported by Reuters, Maria Vullo, superintendent of the state’s Department of Financial Services, said in a letter that the proposed charters, as put forth by the Office of the Comptroller of the Currency (OCC), represented a “highly problematic” upending of state laws that are already in place, as the charters would “invite serious risk of regulatory confusion and uncertainty, stifle small business innovation … imperil crucially important state-based consumer protection laws and increase the risks presented by nonbank entities.”

Tuesday marked the final day for comments on the proposal, which would give FinTech firms federal charters, with the aim, as defined by the comptroller’s office, to reach underserved areas with services stretching across banking and insurance.

In response, said Reuters, Bryan Hubbard, an OCC spokesman, told the newswire that the comments would be taken under consideration but that the OCC had the authority to move forward. The timeframe for that movement was not immediately clear in terms of the applications being accepted.

Vullo’s letter also stated that the OCC has no past experience in the regulation of nonbank financial entities.