The Conference of State Bank Supervisors filed a complaint arguing that the unique bid by the San Francisco fintech is "merely a thinly veiled effort" to evade legal challenges to the federal regulator's chartering of nonbanks.
A survey conducted by the Conference of State Bank Supervisors found that concerns about operating conditions have led a large percentage of small banks to steer clear of acquisitions and new tech investments.
The OCC is trying to seize jurisdiction by arguing that current supervision is haphazard. But states are already working together to streamline regulation while continuing to enforce consumer protections and encourage innovation.
With the Office of the Comptroller of the Currency considering a special charter for payments firms, a state regulator group said large money transmitters can opt for the “one company, one exam” program next year.
In a sharp escalation of the battle over the future of the dual banking system, the acting chief of the Office of the Comptroller of the Currency suggested that states should defer to federal authority in supervising global money transmitters.
Backers of lawsuits challenging federal charter and interest rate policies for nonbanks say states are sticking up for consumer protection. Others say the legal quagmire could slow efforts to improve the regulatory framework.
The Office of the Comptroller of the Currency is overstepping its authority in granting charters to fintechs and other companies that don’t take deposits.
The Conference of State Bank Supervisors says parts of the plan are an overreach, while the agency should think twice about developing the proposal during the coronavirus pandemic.
Accommodations for borrowers affected by the coronavirus pandemic, such as payment delays and fee waivers, are "positive and proactive actions that can manage or mitigate adverse impacts," the regulators said.
