On October 25, 2018, the Conference of State Bank Supervisors (“CSBS”) filed a complaint in the United States District Court for the District of Columbia to stop the Office of the Comptroller of the Currency (“OCC”) from issuing special purpose national bank charters to fintech companies.  The lawsuit follows a similar suit against the OCC by the New York State Department of Financial Services (“DFS”) in the United States District Court for the Southern District of New York, which we discussed in September.

Like DFS, the CSBS alleges that the OCC lacks statutory authority to charter special purpose national banks that do not issue deposits, other than those non-depository companies specifically enshrined in federal law, such as trust companies.  Unlike DFS, the CSBS further alleges that the OCC acted in an arbitrary and capricious manner under the Administrative Procedure Act in implementing the special purpose fintech charter program, by failing to consider the implications of the program sufficiently and failing to offer an adequate explanation for its actions.

The CSBS brought suit against the OCC on similar grounds in April 2017.  The district court dismissed that case in April 2018 on the grounds that the OCC had not yet made a firm determination as to whether to issue fintech charters, and therefore that the issues were not yet ripe for adjudication.  In July 2018, the OCC announced that it would begin accepting special purpose charter applications from fintech companies.