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OCC Speaks Out On DFS & Fintech Charter Lawsuit

OCC Speaks Out On DFS & Fintech Charter Lawsuit

Comptroller of the Currency Joseph Otting said in an interview that the recent decision by U.S. District Court Judge Victor Marrero that allows the New York State Department of Financial Services (DFS) to continue its legal challenge to the OCC’s special-purpose fintech charter is having an impact by inhibiting applications for the charter. The court ruled  the OCC failed to rebut DFS’s claim that the charter poses a threat to its ability to establish its own laws and regulations. 

There is also another lawsuit pending against the OCC by the Conference of State Bank Supervisors. Otting no longer expects to have a fintech firm formally apply during the second quarter of 2019.  ICBA has expressed concern the charter would create an unlevel regulatory playing field, and believes the OCC should not issue any fintech charters absent specific congressional authorization.

. . .And, On CECL

Meanwhile, in its  latest Semiannual Risk Perspective, the OCC said the implementation of the Current Expected Credit Loss (CECL) standard warrants awareness among bankers and examiners and could develop into a key risk. OCC said CECL “may pose operational and strategic risk to some banks when measuring and assessing the collectability of financial assets,”  and cited credit quality, the increasing complex operating environment, BSA/AML compliance, and interest rate risk.

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