{"id":3865,"date":"2017-12-20T15:36:53","date_gmt":"2017-12-20T20:36:53","guid":{"rendered":"https:\/\/www.paymentfacilitator.com\/?p=3865"},"modified":"2022-02-24T22:14:44","modified_gmt":"2022-02-24T22:14:44","slug":"new-yorks-occ-fintech-charter-lawsuit-is-dismissed","status":"publish","type":"post","link":"http:\/\/infinicept.com\/payment-facilitator\/business\/new-yorks-occ-fintech-charter-lawsuit-is-dismissed\/","title":{"rendered":"New York\u2019s OCC Fintech Charter Lawsuit is Dismissed"},"content":{"rendered":"

At least for now. As you know, this ongoing issue revolving around the proposal to license fintech companies as special purpose national banks has been under review for some time.<\/strong><\/p>\n

As previously reported on here, last December saw the first public announcement from the Office of the Comptroller of the Currency (OCC) regarding the intent to begin accepting special purpose bank charter applications from fintech organizations. And since then, the response has been a mixed one.<\/p>\n

Most recently, a New York Department of Financial Services (DFS) lawsuit has been dismissed<\/a> based largely on a \u201cperceived lack of threat to the DFS\u2019 own regulatory powers,\u201d according to Business Insider.<\/p>\n

The same article<\/a> reports the New York judge who dismissed the case did so based on the argument that the project \u201cis still only hypothetical\u201d and feels the outcome of the proposal \u201chas become increasingly uncertain under President Trump\u2019s two Comptrollers of the Currency.\u201d<\/p>\n

While Keith Noreika was very up front about his support for the initiative, Joseph Otting (his successor) has made no statement either way and this, according to the article, implies the judge holds little expectation the project will get off the ground.<\/p>\n

Notable organizations like The Electronic Transaction Association (ETA) and Financial Innovation Now (FIN) have responded favorably in the past regarding the discussion about a regulatory framework that can successfully support the fintech business model.<\/p>\n

As previously reported, the ETA specifically addressed the uniqueness of the fintech model \u2013 explaining how \u201cthe term fintech covers a broad spectrum of companies, including payment processors, money transmitters and online consumer and business lenders.\u201d And it was their feeling that \u201cthe OCC should develop an approach for the fintech charter process that recognizes the unique characteristics of the different types of entities that fit under the fintech umbrella.\u201d<\/p>\n

In response to speculation on the federal government\u2019s right to regulate fintech companies, the Conference of State Bank Supervisors (CSBS) previously filed a complaint in April of this year, citing the agency\u2019s attempt to create a national charter as \u201cunlawful.\u201d And this was followed closely by the New York DFS filing a similar lawsuit in May (both previously reported on here), the latter of which is the one most recently dismissed.<\/p>\n

Industrial Lending Company (ILC) charters are another option available for nonfinancial companies whereby the holders are eligible for FDIC insurance. However, while payments leader Square was one of the first companies to apply for this charter license in September (reported on here), the complexity of the process may be more of a deterrent for other fintechs to follow suit, according to the same article<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

As previously reported, last December saw the first public announcement from the Office of the Comptroller of the Currency (OCC) regarding the intent to begin accepting special purpose bank charter applications from fintech organizations. And since then, the response has been a mixed one. Most recently, a New York Department of Financial Services (DFS) lawsuit has been dismissed based largely on a \u201cperceived lack of threat to the DFS\u2019 own regulatory powers.\u201d <\/p>\n","protected":false},"author":21,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","_FSMCFIC_featured_image_caption":"","_FSMCFIC_featured_image_nocaption":"","_FSMCFIC_featured_image_hide":"","footnotes":""},"categories":[2,7],"tags":[224,269,303,399,597,828],"class_list":["post-3865","post","type-post","status-publish","format-standard","hentry","category-business","category-risk-compliance","tag-dfs","tag-eta","tag-fintech","tag-ilc-charter","tag-occ","tag-square"],"acf":[],"_links":{"self":[{"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/posts\/3865","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/users\/21"}],"replies":[{"embeddable":true,"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/comments?post=3865"}],"version-history":[{"count":4,"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/posts\/3865\/revisions"}],"predecessor-version":[{"id":8137,"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/posts\/3865\/revisions\/8137"}],"wp:attachment":[{"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/media?parent=3865"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/categories?post=3865"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/tags?post=3865"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}