Financial Industry Alert | May.03.2017
Last week, a group of state regulators, the Conference of State Bank Supervisors ("CSBS"), filed suit in the U.S. District Court for the District of Columbia seeking to enjoin the Office of the Comptroller of the Currency ("OCC") from issuing special-purpose national bank charters to non-depository fintech companies. The OCC first proposed such charters in a white paper last December, and moved forward with a draft licensing manual in March after soliciting public feedback.
CSBS seeks an injunction on four grounds:
According to the complaint, the OCC's regulation—and, by extension, special-purpose charters for non-depository fintech companies —is impermissibly broad. CSBS asserts that the statutory phrase "the business of banking" necessarily requires that the chartered entity receive deposits. In support of that construction, the CSBS points to amendments to the NBA that expressly authorize charters for select non-depository institutions—amendments that would purportedly have been unnecessary if the institutions were otherwise eligible for charters.