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NYDFS Reignited its Arguments with OCC over Plans to Offer Banks Charter Status

New York's State Department of Financial Services (NYDFS) has re-ignited its war of words with the Office of the Comptroller of the Currency (OCC) over plans to offer bank charter status to qualifying FinTech firms. The State's latest intervention comes as the OCC issues a draft supplement to the agency’s existing Licensing Manual providing additional detail on its plans. The release of the document comes just weeks after Comptroller Curry dismissed earlier criticism of its proposals from State regulators.

The OCC's actions have spurred the NYDFS to once again wade in, arguing that the imposition of an entirely new federal regulatory scheme 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 further disputes the OCC’s claim that it has the authority under the National Bank Act, without Congressional authorization, for the proposed new charter.

According to the OCC, 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 non-depository institutions to protect the public against money laundering, terrorist financing, and cyber threats. The OCC also says it has received over 100 written comments to its original 2016 paper discussing issues associated with chartering FinTech companies.

News Characteristics

Date : Mar 16, 2017
Region : North America
Industry : Banks
Function : Regulation and Compliance
Sub-Function : Regulatory changes