Cochrane seriously misconstrues what the WSJ op-ed is about, which I think is understandable since it adopts a pro-regulatory tone while in the underlying Second Circuit appeal that the op-ed is about the OCC is adopting a (sort of) deregulatory position.

I think this article gives a better understanding of what’s actually happening: https://www.kilpatricktownsend.com/Blog/fintech/2020/8/Banki...

In brief, if you want to set up a fintech company now, you may need to comply with 50 states laws. That isn’t just being basically law-abiding, but involves serious compliance work. I started looking up licenses for Square as an example and got bored after the first few as state web sites are all different and inconvenient:

https://dbo.ca.gov/2018/04/02/square-inc/

https://www.dob.texas.gov/entity-search/entity-detail?bid=10...

http://www.dora.state.co.us/pls/real/BIDS_Search.Individual_...

Each of those, and also for all the other states, involved satisfying a state agency that Square was adequately solvent and would comply with a host of laws. You may notice that the first two have license numbers and the numbers are small. That says something about how easy it is to get the licenses. This is a meaningful part of these companies’ moats.

The OCC action that New York is challenging is to provide a federal alternative structure in which companies would get one federal license and receive nationwide permission to engage in a host of banking-like activities. They would still be able to get state licenses instead, if they wanted. This system (of picking between a state and federal regulator) is called dual chartering and has existed in the banking industry for a long time; it establishes a check on both state and federal regulators by allowing the regulated entity to switch to an alternative regulator.