Fintech Charter Lawsuit Dismissed

Last week the U.S. District Court for the District of Columbia again dismissed the Conference of State Bank Supervisors’ (CSBS) lawsuit against the Office of the Comptroller of the Currency's (OCC) over its decision to allow non-bank institutions, including fintech companies, to apply for a Special Purpose National Bank Charter (SPNB).

The Conference of State Bank Supervisors had argued that the OCC's national charter – which would apply to companies that provide target banking services but do not take deposits – goes beyond the agency's legal authority.

In the ruling, the court held that the plaintiffs lacked standing to sue the OCC as its members had not faced an injury and are not likely to face an imminent injury. Earlier this year a federal judge allowed a similar lawsuit, brought against the OCC by the New York Department of Financial Services, to proceed.

A spokesperson for the OCC said in a statement that they agency will "continue to defend its statutory authority to issue national bank charters, including special purpose national bank charters."

"It is important that the regulatory framework for the national banking system is allowed to evolve so that it can continue to meet the changing needs of consumers, businesses, and communities it serves and so that we maintain the health of a dual banking system," he added.

CUNA and the state leagues acknowledge the benefits of fintechs and continue to advocate for a regulatory framework that does not limit innovation but ensures a level playing field for all financial services providers.