US: New York Bank regulator sues OCC

On Friday, New York’s statebank regulator moved to block the Office of the Comptroller of the Currency from making good on plans to offer special-purpose national bank charters to financial technology companies, filing a suit in Manhattan federal court that seeks to have the agency’s recent so-called fintech charter decision invalidated.

Maria Vullo, superintendent of New York’s Department of Financial Services, called the July 31 decision by the Office of the Comptroller of the Currency to let financial technology companies, or fintech firms, obtain charters “lawless, ill-conceived, and destabilizing of financial markets.” reported Reuters. She said New York could best regulate those markets, but the OCC decision left consumers “at great risk of exploitation” by weakening oversight of predatory lending, allowing the creation of more “too big to fail” institutions, and undermining the ability of local banks to compete.

“The OCC’s reckless folly should be stopped,” Vullo said in her complaint filed in the US District Court in Manhattan.

OCC spokesman Bryan Hubbard said in an email to Reuters that the regulator, part of the US Department of Treasury, would vigorously defend its authority to grant national charters to qualified companies “engaged in the business of banking.”

Full Content: Reuters