March 15, 2017
Statement by New York State Financial Services Superintendent Maria T. Vullo on the OCC’s Proposed Licensing Manual Supplement for Evaluating Charter Applications From Financial Technology Companies
The New York State Department of Financial Services (DFS) continues to oppose the Office of the Comptroller of the Currency (OCC)’s proposal to create a new national bank charter for any entity deemed by the OCC to fit within the amorphous category of “fintech.” The imposition of an entirely new federal regulatory scheme on an already fully functional and deeply rooted state regulatory landscape will invite efforts to evade state usury laws and other consumer protections, stifle small business innovation, create institutions that are too big to fail, and increase the risks presented by nonbank entities.
DFS disputes the OCC’s claim that it has the authority under the National Bank Act, without Congressional authorization, for this proposed new charter. Nonbank financial institutions are not national banks nor are they similar to the entities encompassed by the National Bank Act. Even if the OCC had jurisdiction, a new charter would not be needed because there are already effective state regulators in place in all 50 states. The proposal threatens to create an entirely new federal regulatory program, creating serious regulatory uncertainty that threatens to invade state authority and sovereignty. DFS already regulates money transmitters, check cashers, virtual currency exchanges, and other nondepository institutions to protect the public against money laundering, terrorist financing, and cyber threats.
DFS will continue to protect the sovereignty of New York by enforcing state laws and protecting consumers.