WASHINGTON — New York state's financial regulator is reviving litigation against the Office of the Comptroller of the Currency in an attempt to block the agency from offering a first-ever national bank charter for fintech firms.
Maria Vullo, superintendent of the New York State Department of Financial Services, filed a lawsuit Friday arguing that a special-purpose charter, which the OCC recently said it would consider for fintech applicants, goes beyond the federal agency's statutory authority.
The OCC charter is “lawless, ill-conceived, and destabilizing of the financial markets,” the lawsuit says.
Vullo's complaint says "the OCC’s reckless folly should be stopped,” noting that the OCC has appeared to make the charter available to “a boundless class of undefined ... companies, including companies that do not accept deposits."
“These newly forged institutions will seek to provide financial services in connection with an unidentified and sweeping array of commercial ventures never before authorized or regulated by the OCC,” the complaint says.
The Conference of State Bank Supervisors also announced its intent Wednesday to refile a suit on similar grounds. Both the CSBS and New York agency originally filed suits in early 2017, objecting to the OCC's charter proposal. But those cases were later dismissed since it was not clear the OCC intended to offer the charter.
On July 31, Comptroller of the Currency Joseph Otting said the OCC would proceed in offering the charter. The plan to license fintech firms was initiated by his predecessor, Thomas Curry. The agency has long argued that the charter is within its legal boundaries.
“The agency is confident in its authority to grant national bank charters including special purpose national bank charters to companies that are engaged in the business of banking, meet the qualifications for becoming a national bank, and apply to conduct business as part of the federal banking system,” OCC spokesman Bryan Hubbard said in a statement Friday responding to New York’s suit. “The agency will vigorously defend that authority, but will not comment on pending or potential litigation.”
