New York has filed a court challenge against the Office of the Comptroller of the Currency’s decision to begin granting special-purpose national bank charters to a class of undefined “fintech” companies, including companies that do not accept deposits

The lawsuit, filed in federal court in Manhattan on Friday by Superintendent of the New York State Department of Financial Services  Maria T. Vullo, seeks  to void the OCC’s August decision, calling it "lawless, ill-conceived, and destabilizing of financial markets that are properly and most effectively regulated by New York State."

“The OCC’s action is legally indefensible because it grossly exceeds the agency’s statutory authority. The argument is self-evident.  The OCC has determined that national “banks” holding fintech charters will not, and cannot, accept deposits. That proviso violates a fundamental premise of federal banking law,” the lawsuit claims.

As ABL Advisor has reported, the OCC announced it will begin accepting applications for national bank charters from nondepository financial technology (fintech) companies engaged in the business of banking.

“Over the past 150 years banks and the federal banking system have been the source of tremendous innovation that has improved banking services and made them more accessible to millions. The federal banking system must continue to evolve and embrace innovation to meet the changing customer needs and serve as a source of strength for the nation’s economy,” said Comptroller of the Currency Joseph M. Otting. “The decision to consider applications for special purpose national bank charters from innovative companies helps provide more choices to consumers and businesses, and creates greater opportunity for companies that want to provide banking services in America. Companies that provide banking services in innovative ways deserve the opportunity to pursue that business on a national scale as a federally chartered, regulated bank.”

For more information on the ongoing controvsery over national fintech charters, see our June guest blog by  Ballard Spahr's Alan S. Kaplinsky and Scott M. Pearson.