The Office of the Comptroller of the Currency (OCC) has filed a renewed motion to dismiss the lawsuit filed by the Conference of State Bank Supervisors (CSBS) in D.C. federal district court challenging the OCC’s authority to grant special purpose national bank (SPNB) charters to fintech companies.  The OCC had filed the motion several days earlier but was required to file a renewed motion to reduce the number of footnotes.  Except for adding a new statute of limitations argument, the arguments in the new memorandum in support of the motion track those made in the initial memorandum.

The OCC’s central argument for dismissal is that because it has not yet decided whether it will offer SPNB charters to companies that do not take deposits, the CSBS complaint should be dismissed for failing to present either a justiciable case or controversy under the U.S. Constitution or a reviewable final agency action under the Administrative Procedure Act (APA).  More specifically, the OCC argues that:

  •  CSBS cannot establish standing necessary to meet the Article III “case or controversy” requirement because the OCC has not yet taken any relevant action that could have a concrete effect on CSBS or its members—no SPNB charter has been issued to a non-deposit taking bank, the OCC has not received any applications to charter such a bank, no final procedures for processing such applications are in place, and the OCC’s public statements about the SPNB charter were part of ongoing policy development that is not final.
  • The actions taken by the OCC that are referred to as the “Nonbank Charter Decision” in the CSBS complaint are nothing more than a collection of non-final policy papers and solicitations for public input that do not represent a “final agency action” subject to review under the APA.
  • Because no final agency action has taken place, the court should conclude that the matter is not ripe for judicial review.

The OCC’s other arguments for dismissal include:

  • If the adoption of the amendments to the OCC’s chartering regulations (12 C.F.R. Section 5.20(e)(1)) that would allow the OCC to charter a bank that does not receive deposits constituted a final agency action, an APA cause of action accrued in January 2004 when the final rule became effective.  Since an APA action is subject to a six-year statute of limitations, the time for filing an APA challenge expired in January 2010.
  • Even if the court were to reach the merits of the validity of Section 5.20(e)(1), the complaint should be dismissed for failure to state a claim because, under Chevron, the provision represents a reasonable interpretation of the undefined and ambiguous term “business of banking” in the National Bank Act.
  • CSBS’ argument that the OCC’s authority under the NBA to charter an entity to “commence the business of banking” does not give the OCC authority to charter a national bank that does not accept deposits is without merit for reasons that include contrary U.S. Supreme Court and D.C. Circuit authority.