The head of the Department of Financial Services (DFS) of New York has strongly opposed the US Treasury’s support for FinTech sandboxes.
The state’s financial regulatory body has also spoken against the Office of the Comptroller of the Currency’s decision to begin accepting applications for national bank charters from nondepository financial technology (FinTech) companies.
Superintendent Maria T. Vullo said: “The New York State Department of Financial Services fiercely opposes the Department of Treasury’s endorsement of regulatory ‘sandboxes’ for financial technology companies.
“The idea that innovation will flourish only by allowing companies to evade laws that protect consumers, and which also safeguard markets and mitigate risk for the financial services industry, is preposterous.”
Vullo also claimed that ‘toddlers play in sandboxes, ‘while adults play by the rules’. She added: Companies that truly want to create change and thrive over the long-term appreciate the importance of developing their ideas and protecting their customers within a strong state regulatory framework.
This statement is a response to the Treasury’s statement on 31 July, where it identified “improvements to the regulatory landscape that will better support nonbank financial institutions, embrace financial technology, and foster innovation”.
Earlier this month, the Office of the Comptroller of the Currency (OCC) said it is now accepting applications for national bank charters from non-depository FinTech firms.
The OCC said its decision is ‘consistent with bi-partisan government efforts’ at federal and state levels. It hopes the move will promote economic opportunity and support innovation that can improve financial services to consumers, businesses, and communities.
Commenting on the decision, Vullo added: “DFS also strongly opposes today’s decision by the Office of the Comptroller of the Currency to begin accepting applications for national bank charters from nondepository financial technology (FinTech) companies.
“DFS believes that this endeavor, which is also wrongly supported by the Treasury Department, is clearly not authorized under the National Bank Act. As DFS has noted since the OCC’s proposal, a national FinTech charter will impose an entirely unjustified federal regulatory scheme on an already fully functional and deeply rooted state regulatory landscape.”
Copyright © 2018 RegTech Analyst
Copyright © 2018 RegTech Analyst
