The Conference of State Bank Supervisors, banking law scholars and consumer advocacy organizations filed amicus briefs siding with the New York State Department of Financial Services in its court battle with the federal regulator.
Acting Comptroller of the Currency Brian Brooks said the agency plans to issue new assessment procedures within weeks as a follow-up to recent Community Reinvestment Act reforms. He also touched on the “true lender” issue and why the agency is considering a narrow-purpose payments charter.
The complaint filed by New York, California and Illinois argues that the regulation, issued in response to the 2015 Madden decision, undermines state laws intended to protect consumers.
Seven trade groups said they would fight any effort by the agency to establish a tailored license for payments providers such as PayPal, Stripe and Square.
Financial institutions want to protect customers and employees from the coronavirus but are caught in the middle of a politically charged public health debate. The stance taken by the industry’s largest trade group gives them cover.
Responding to an unnamed bank that had sought the opinion, the regulatory agency issued an interpretive letter clarifying that an institution's custody services can be used for cryptographic keys and other digital currency-related assets.
The coronavirus pandemic has exposed weaknesses even at well-established fintechs. They could become more resilient by partnering with traditional financial institutions.
If it’s approved, the charter is expected to lower the fintech’s cost of funds and allow for more product offerings. It comes nearly three years after SoFi pulled the plug on an earlier effort to open an industrial bank.
