Maria Vullo, superintendent of New York's Department of Financial Services is suing the Federal Government saying the OCC's decision to award national bank charters to online lenders and payment companies was unconstitutional and put vulnerable consumers at risk.
Fintech firms have long pushed for national bank charters to let them operate nationwide without needing licenses in every state, a process they say can impede growth and boost costs. Advertisement Treasury Secretary Steven Mnuchin has said easing regulation of newer financial companies can "encourage financial ingenuity to foster the nation's vibrant financial services and technology sectors." But critics believe granting national bank charters to fintech firms, including those that do not hold deposits, could shield unscrupulous companies from state oversight. Vullo oversees more than 2,200 banks, financial services companies and insurers with about $7 trillion of total assets.