New York and CSBS Express Skepticism Regarding OCC Fintech Charters

The March 15, 2017 release by the Office of the Comptroller of the Currency (OCC) of a draft supplement to its Licensing Manual (Supplement), providing details about the process by which financial technology (fintech) companies are expected to be able to apply for national bank charters, has been met with skepticism by the New York State Department of Financial Services (NYDFS) as well as the Conference of State Bank Supervisors (CSBS).

Following the Supplement’s release, the NYDFS issued a press release expressing its continuing opposition to the OCC’s proposal to create a new national bank charter for fintech companies. Concerns expressed by the NYDFS include that the charters will allow fintech companies 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.” The NYDFS also disputes the OCC’s right to establish the new charter without congressional authorization. The CSBS press release expresses similar concerns.