OCC Argues that Court Ruling on Fintech Charter “Must Wait”
The Office of the Comptroller of the Currency (OCC) has recently submitted a motion asking a federal judge to dismiss a lawsuit against the agency’s plan to issue fintech charters, despite acknowledging that a court ruling would be beneficial to all parties involved.
The long-running dispute involves two separates lawsuits against the OCC brought by New York’s Department of Financial Services (DFS) and the Conference of State Bank Supervisors (CSBS). Both parties have each filed suit seeking to block implementation of the OCC’s special purpose bank charter system intended to bring fintech companies away from state rule and under federal supervision.
In its most recent motion seeking to dismiss the CSBS suit, the OCC argued that it “acknowledges that an authoritative resolution of this question would benefit the parties and the banking industry as a whole. But the Court’s ability to resolve this dispute – and the statutory interpretation issue that underlies it – must wait.”
The OCC stated that CSBS lacks standing since the federal agency has yet to approve any application for a fintech charter. Only then, would CSBS have standing to sue, argued the OCC.
Margaret Liu, senior vice president and deputy general counsel at CSBS, told American Banker that CSBS would continue challenging OCC’s fintech charter. “Agency announcements from last summer that it is soliciting and accepting applications for a national bank charter for nonbanks, along with publication of a final licensing manual supplement, require judicial intervention,” said Liu. “The OCC’s actions exceed its statutory authority, stifle competition and innovation, and expose consumers to more risk by preempting state consumer protection laws.”
In the end, it seems that the dispute will not end anytime soon. Even if the court dismisses the current suit, it is only a matter of time before the OCC grants a company a fintech charter, which would then spur additional lawsuits.
NAFSA has more on the history of this long-running dispute here.