The Bank Slate


OCC pushing New York Community to exit stablecoin effort

New York Community Bancorp in Hicksville will likely need to exit the USDF Consortium to buy Flagstar Bancorp in Troy, Mich.

The Office of the Comptroller of the Currency, in its conditional approval for the $2.6 billion deal, instructed the $63 billion-asset New York Community to divest its interest in the group within two years of completing the acquisition.

The OCC said it reserves the right to reverse course and all the bank to retain the investments.

The approval also barred the $25.4 billion-asset Flagstar from increasing its membership in the USDF Consortium. Flagstar was also blocked from increasing its holdings of any crypto-related currency or token without obtaining OCC approval.

Flagstar will have 30 days after the merger closes to seek OCC nonobjection to engage in any crypto-asset, distributed ledger, or stablecoin activities. Absent OCC nonobjection, the bank will have two years to cease and divest any of those activities.

New York Community was among the first five banks to join the USDF Consortium, a group formed to mint and use tokenized deposits.

The OCC also said in the order that it is “reviewing the permissibility” of investing on the consortium “in an unrelated case.”

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