On January 17, 2017, NYSDFS Superintendent Maria T. Vullo submitted a comment letter opposing the OCC's proposal to create a new national bank charter for FinTech companies. Vullo noted that a one-size-fits-all federal charter will not work to create a level-playing field among all financial services companies, or to alleviate risks. Rather, she argued, the proposal increases risk, creates an opportunity for regulatory arbitrage and attacks states sovereignty. The letter provides that the OCC has never regulated nonbank financial institutions, and that state regulators like NYSDFS are experienced and therefore better equipped to regulate cash-intensive nonbank financial service companies. Furthermore, the NYSDFS argued that the National Bank Act does not provide the OCC with authority to create this new proposed charter, which would create an entirely new federal regulatory program resulting in regulatory uncertainty and possible evasion of important state consumer protection laws. The letter also notes that a national charter would likely stifle, rather than encourage innovation, since it would provide a means for large "too big to fail" firms to control the development of technology solutions, thereby harming existing banks and small businesses seeking to serve local communities.
NYSDFS has called on state regulators, legislators and other policymakers to oppose the OCC's proposed special charter and support the nation's strong state-based regulatory system.
The NYSDFS comment letter is available at: http://www.dfs.ny.gov/about/occ_letter1-17-17.pdf .
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