United States: New York State Department Of Financial Services Superintendent Submits Comment Letter To US Office Of The Comptroller Of The Currency Opposing Proposed Special Purpose National Bank Charter For FinTech Companies
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 new Administration and Congress are pursuing a multi-pronged approach to regulatory relief for financial services firms, with stated goals of reducing administrative burdens and complexity as a means to spur economic growth.
Following his campaign promise to dismantle the Dodd–Frank Wall Street Reform and Consumer Protection Act, Donald Trump issued an Executive Order on February 3, 2017 that set out "Core Principles" for regulating the financial system.
Overseas Shipping Group ("Overseas") recently sued its former attorneys, a prominent New York-based law firm, for legal malpractice in drafting credit agreements that resulted in the company incurring an estimated $463 million in tax liability.
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