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Financial Services Law Insights and Observations

District Court again dismisses CSBS suit over OCC fintech charter

Courts OCC Fintech Fintech Charter CSBS


On September 3, the U.S. District Court for the District of Columbia again dismissed the Conference of State Bank Supervisors’ (CSBS) lawsuit against the OCC over its decision to allow non-bank institutions, including fintech companies, to apply for a Special Purpose National Bank Charter (SPNB). As previously covered by InfoBytes, the court dismissed the original complaint in April 2018 on standing and ripeness grounds. Then, after the OCC announced last July that it would welcome non-depository fintech companies engaging in one or more core-banking functions to apply for a SPNB, CSBS renewed its legal challenge. (See previous InfoBytes coverage here.) In dismissing the case again, the court held that CSBS “continues to lack standing and its claims remain unripe,” adding that “not much has happened since [the original dismissal] that affects the jurisdiction analysis.” Specifically, the court noted its previous holding that CSBS’s alleged harms was “contingent on whether the OCC charters a [f]intech,” but CSBS “does not allege that any [fintech company] has applied for a charter, let alone that the OCC has chartered a [f]intech.” In addition, the court reiterated its prior conclusion that the dispute remains “neither constitutionally nor prudentially ripe for determination.”

The court further acknowledged a contrasting decision issued in May by the U.S. District for the Southern District of New York allowing a similar challenge filed by NYDFS to survive (previous InfoBytes coverage here), stating that it “respectfully disagrees” with that court’s decision “to the extent that its reasoning conflicts” with either of the dismissal decisions in the CSBS cases. Finally, the court denied CSBS’s request for jurisdictional discovery because it will lack jurisdiction “at least until a [f]intech applies for a charter,” which will be publicly disclosed.

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