The New York Department of Financial Services submitted a comment letter today opposing the OCC’s plan to create a federal fintech charter.
From Bank Innovation:
“The New York State Department of Financial Services submitted a formal comment letter to the OCC today, saying that the latter, frankly, isn’t going to do the job of regulating fintechs — and isn’t even authorized to do so under the National Bank Act. Or in New York parlance, the OCC should fuggedaboutit.”
From New York’s Letter:
The imposition of an entirely new federal regulatory scheme on an already fully functional and deeply rooted state regulatory landscape will invite serious risk of regulatory confusion and uncertainty, stifle small business innovation, create institutions that are too big to fail, imperil crucially important state-based consumer protection laws and increase the risks presented by nonbank entities.
Superintendent Vullo made clear the value of the state licensing system as well:
It would be an avenue for larger, more-dominant firms to control the development of technology solutions in the financial services industry. Currently, small businesses can enter the fintech field and explore different technologies. The ability to start and license a business through a state licensing regime is the appropriate way to foster the development of technological enhancements and encourage small businesses.