Maria Vullo, the head of the New York State Department of Financial Services, is a skeptic of the so-called Fintech revolution.

While some policymakers are eager to accommodate online lenders with regulatory oversight that is looser than what applies to banks, Vullo believes the word "Fintech" is misleading and too often used as cover by predatory actors.

Vullo's skepticism is reflected in her agency's actions to date. Since taking office in early 2016, Vullo backed a Conference of State Bank Supervisors lawsuit against the Office of the Comptroller of the Currency's proposed special charter for Fintech firms and filed a separate lawsuit of her own against the agency.

To some, Vullo is a tough cop on the beat, a worthy successor to Benjamin Lawsky, who earned a reputation as a scourge of Wall Street. To others, Vullo's actions threaten to cause Fintech firms to flee New York, leaving the country's financial capital out of a movement that promises significant innovations.

After a few months in office, Vullo issued subpoenas against LendingClub and nearly 30 other marketplace lenders to determine whether they should be licensed in New York. Her agency is now attempting to expand licensing requirements for all small-dollar consumer and commercial lenders, regardless of the interest rates they charge. (Currently, these lenders have to register only if their interest rates exceed 16 percent.)

The move has drawn fire from the Fintech sector. "What the department is doing under her leadership is essentially attempting to force standards on the entire country based on the fact that New York is such a large, important state, without regard for the economic consequences of the rules that they're adopting," said Scott Pearson, a partner at Ballard Spahr who advises banks and Fintech firms.

Critics warn that this environment might prompt Fintech players to leave New York, especially marketplace lenders already smarting from a recent appeals court decision that could force them to comply with the interest rate caps for each state where they operate.

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