State Bank Regulators Challenge OCC’s Authority to Issue Fintech Charters

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Posted by V. Gerard Comizio and Nathan S. Brownback, Fried, Frank, Harris, Shriver & Jacobson LLP, on Sunday, June 4, 2017

Editor’s Note: V. Gerard Comizio is a partner and Nathan S. Brownback is an associate at Fried, Frank, Harris, Shriver & Jacobson LLP. This post is based on a Fried Frank publication by Mr. Comizio and Mr. Brownback.

On April 26, 2017, the Conference of State Bank Supervisors (“CSBS”) sued the Office of the Comptroller of the Currency (“OCC”) in federal court in Conference of State Bank Supervisors v. OCC, alleging that the OCC’s plan to charter fintech companies as special purpose national banks is unlawful because the process the OCC used to develop the plan was procedurally defective and because issuing such charters would exceed the OCC’s authority.

On May 12, the New York State Department of Financial Services (“DFS”), which is one of the state bank regulators that make up the CSBS, separately sued the OCC in federal court in Vullo v. OCC, alleging, similarly, that the OCC exceeded its authority in planning to issue the charters, and emphasizing that the planned federal charter could threaten New York consumers.

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June 04, 2017 at 08:07PM

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