NY Lawsuit taps “breaks” on Fintech Charter

May 16, 2019 at 9:54 am Leave a comment

New York’s lawsuit challenging the authority of the OCC to charter limited purpose fintech charters has already accomplished one of its primary goals by slowing down OCC’s charter approval timeline.

Comptroller Otting was originally hoping to see the first official application in the second quarter of 2019 but in an interview with American Banker he admits that a recent ruling allowing NY to go forward and challenge the OCC’s authority has put a “chill” on things,  NY argues that by granting bank charters to non-depository institutions many of these corporations will avoid state level regulation of activities such as mortgage brokering and payday lending.

“I respect the judge who made the decision. … However, we still feel we have the legal authority to do this,” Otting said. “If you apply his principle, then every bank would have to have an active deposit to do anything in the banking industry … we intend to defend what we think is our legal right.” he explained

An OCC motion to dismiss a similar lawsuit brought by a coalition of state regulators is currently pending in DC federal court.and the OCC might simply be waiting to see what happens to its motion to dismiss this case before deciding how  to  proceed.

I’m a little surprised by the OCC’s  caution.  the Judge’s ruling simply allows New York to take on the much more difficult task of winning on the merits of its claim.  Litigation was inevitable and will take  years to resolve.  Then again,  who wants to ask for a charter that you may not be able to keep?

Report released on Complaints to CFPB

I’ve never been a big  fan  of the cfpb’s Consumer complaint portal.  Given enough  data,  the statistics produced by this wiki inspired  innovation can be both  deceiving and counterproductive,  particularly since no effort is made to verify the accuracy of complaints before they are posted. So  I’ll   let you decide if you agree with me  after reading this report from the US public interest Group..

Entry filed under: New York State, Regulatory, technology. Tags: .

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Authored By:

Henry Meier, Esq., Senior Vice President, General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association. In addition, although Henry strives to give his readers useful and accurate information on a broad range of subjects, many of which involve legal disputes, his views are not a substitute for legal advise from retained counsel.

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