The OCC has appealed to the Second Circuit from the district court’s final judgment entered in October 2019 in the lawsuit filed by the New York Department of Financial Services seeking to block the OCC’s issuance of special purpose national bank (SPNB) charters to fintech companies. In the final judgment, the district court denied the OCC’s motion to dismiss and found that the term “business of banking” as used in the National Bank Act “unambiguously requires receiving deposits as an aspect of the business.” Because the district court also ruled that its decision should have nationwide effect regardless of whether the charter applicant has a New York nexus, the final judgment prevents the OCC from approving any applications for SPNB charters to non-depository fintech companies.
In September 2019, the D.C. federal district court hearing a similar lawsuit filed by the Conference of State Bank Supervisors (CSBS) against the OCC granted the OCC’s motion to dismiss on ripeness grounds. The time for CSBS to file an appeal with the D.C. Circuit has expired.
We continue to hope that the Second Circuit will address the chartering issue on the merits and reverse the district court (whose decision we believe is incorrect and outcome-oriented) and will not duck the issue by finding the matter premature for adjudication.