Last Thursday, the OCC filed a letter with the New York federal district court hearing the lawsuit filed by the New York Department of Financial Services (NYDFS) seeking to block the OCC’s issuance of special purpose national bank (SPNB) charters to fintech companies in which the OCC advised the court that it will be conferring with the NYDFS on a proposed final judgment. The letter also asked the court for a second extension of the date by which the OCC must answer or otherwise move with respect to the complaint. The court granted that request, extending the answer date until June 28, 2019.
On May 2, the court issued a decision denying the OCC’s motion to dismiss in which it concluded not only that the NYDFS had established standing to sue and that its claims were ripe for decision, but also that the NYDFS had stated a claim under the Administrative Procedure Act. In doing so, the court found that the term “business of banking” as used in the National Bank Act “unambiguously requires receiving deposits as an aspect of the business.”
The court had previously granted a request from the OCC for an extension of the date it must answer or otherwise move with respect to the complaint until May 30, 2019. The OCC’s letter requesting the first extension stated that because the OCC had concluded that the court’s May 2 decision likely made the case ripe for entry of a final judgment, it wanted additional time to complete its internal deliberations and confer with the NYDFS.
In its letter requesting a second extension until June 28, the OCC stated that it was making the request “to allow the parties to confer concerning a proposed final judgment to submit to this Court.” The OCC also stated that it “believes the [May 2] decision renders entry of final judgment in this matter appropriate,” that the NYDFS “agrees that entry of a final judgment is proper,” and that “accordingly, the parties intend to discuss the language of a proposed judgment.”
It remains our view that because of the importance of the issue involved in the decision (which we believe is both incorrect and outcome-oriented) and the doubt the decision casts on SPNB chartering, it would be helpful to have a Second Circuit decision at the earliest opportunity.