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OCC's Otting expects delay in fintechs applying for banking charter

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OCC's Otting expects delay in fintechs applying for banking charter

Comptroller of the Currency Joseph Otting does not expect fintech companies to apply for a federal banking charter in the second quarter, he told American Banker in an interview, referring to the recent court ruling that allows the New York State Department of Financial Services' case to block the fintech charters offered by the OCC from proceeding.

In 2017, the New York State Department of Financial Services and the Conference of State Bank Supervisors filed lawsuits against the OCC's proposed charter, which were subsequently dismissed as the OCC had not fully committed to issuing the charter.

The states argued that the OCC's new charter oversteps its legal jurisdiction by not requiring that applicants receive deposits. Otting argued that the OCC is acting within its jurisdiction and that not every national bank should be required to receive deposits, according to the report. Otting and the OCC argued that an applicant for a bank charter only needs to meet one of three criteria: taking deposits, paying checks or lending money.

The OCC filed a request for dismissal of the suit brought by the Conference of State Bank Supervisors. A court has not ruled yet on allowing that case to proceed.