As we reported last week, Maria T. Vullo, the Superintendent of the New York State Department of Financial Services, filed a lawsuit against the Office of the Comptroller of the Currency (OCC), and Keith Noreika, acting Comptroller. The complaint pertains to the OCC”s Fintech Charter.
The actual complaint, embedded below claims;
“The Fintech Charter Decision is lawless, ill-conceived, and destabilizing of financial markets that are properly and most effectively regulated by New York State. It also puts New York financial consumers – and often the most vulnerable ones – at great risk of exploitation by federally-chartered entities improperly insulated from New York law. The OCC’s reckless folly should be stopped.”
The Department of Financial Services slams the OCC claiming the federal agency is in the process of creating serious threats;
- weakening regulatory controls on usury, payday loans, and other predatory lending practices;
- consolidating multiple non-depository business lines under a single federal charter thus creating even more institutions that are “too big to fail;” and
- creating competitive advantages for large, well-capitalized “Fintech” firms, which can overwhelm smaller market players and thereby stunt rather than foster innovation in financial products and services.
Saying that since New York is a global financial center, and thus by default the DFS is effectively a “global financial regulator,” the DFS contests that;
“even if it were legal – which it clearly is not – the OCC’s plan to charter special purpose, non-depository institutions is simply not worth the risk. In short, financial centers like New York, which have developed comprehensive and well-functioning regulatory bodies, should not needlessly bear the harmful brunt of an overreaching federal agency.”
The document is below.