NY Judge Green-Lights State Regulators' Lawsuit Against Federal Agency Over Fintech Charters
It's the second time DFS has sued the OCC over its decision to allow fintech companies that do not receive deposits to seek special-purpose national bank charters.
May 02, 2019 at 04:46 PM
5 minute read
The original version of this story was published on New York Law Journal
A federal judge in Southern District of New York on Thursday rejected a motion from an office within the U.S. Treasury Department to dismiss a lawsuit from the New York State Department of Financial Services seeking to prevent the federal government from issuing certain bank charters to financial technology companies.
The state agency, which regulates financial institutions in New York, is suing the Office of the Comptroller of the Currency over a decision to essentially label fintech companies as banks, saying it will diminish its power to regulate the activities of those entities.
Acting DFS Superintendent Linda Lacewell celebrated the decision in a statement, saying it will give the agency an opportunity to argue why those companies should not be federally chartered as banks since federal regulations on those institutions haven't been as comprehensive as state actions.
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