A federal appellate panel overturned a 2019 lower court ruling that allowed New York’s Department of Financial Services (DFS) to challenge the legality of the Office of the Comptroller of the Currency’s (OCC) special-purpose fintech charter, per Banking Dive.
DFS has argued that the OCC’s special-purpose charter violates the National Banking Act because the credential can be issued to fintechs that don’t take deposits—an interpretation that the OCC has disagreed with.
In its decision, the appellate panel:
A national fintech charter would give banking challengers a fourth path to legally become banks. Three other paths forward are already available:
A fintech charter would make the banking regulatory landscape more hospitable to tech giants like Google, Amazon, and Facebook. Big companies could use fintech charters to jumpstart banking services without ever recruiting partners—and they’d be formidable competitors to established financial institutions. Tech companies with charters may also covet revenue from embedded finance, a space where financial institutions now provide software that backs nonbanks’ products.
11 Times SquareNew York, NY 100361-800-405-0844