Legal
New York, Federal Government Lock Horns Over Fintech Permissions - Report

The story highlights how a push for online financial services, seen as a threat to traditional banks, faces regulatory limits.
New York state’s most senior banking regulator has sued the
federal government in a bid to reverse its decision to
grant national bank charters to online lenders and payment firms,
claiming the move puts consumers at risk, a report
said.
Maria Vullo, superintendent of New York’s Department of Financial
Services, called the July 31 decision by the Office of the
Comptroller of the Currency to let financial technology
companies, or fintech firms, obtain charters “lawless,
ill-conceived, and destabilizing of financial markets”,
Reuters reported.
Vullo was quoted saying that New York could best regulate those
markets, but the OCC decision left consumers “at great risk of
exploitation” by weakening oversight of predatory lending,
allowing the creation of more “too big to fail” institutions, and
undermining the ability of local banks to compete.
“The OCC’s reckless folly should be stopped,” Vullo said in her
complaint filed in the US District Court in Manhattan.
The matter highlights how the much-touted threat by technology
firms to traditional banks faces a threat of its own in the form
of regulatory pushback. In recent months, there has been much
talk around how “Bigtechs” such as Amazon could compete with banks
in some services. In China, e-commerce giant Alibaba’s financial
arm Ant Financial is, by some measures, a major wealth management
organization. Fintech firms are pushing for nation-wide bank
charters so they don’t need separate approvals from each
state.
The newswire quoted OCC spokesman Bryan Hubbard saying that the
regulator, part of the US Department of Treasury, would
vigorously defend its authority to grant national charters to
qualified companies “engaged in the business of banking.”