• State Regulators Sue to Stop FinTech Charters
  • August 11, 2017 | Authors: Ned T. Himmelrich; Lawrence D. Coppel; Marjorie A. Corwin; Christopher R. Rahl
  • Law Firm: Gordon Feinblatt LLC - Baltimore Office
  • The Conference of State Bank Supervisors (CSBS) filed a lawsuit on April 26, 2017 challenging the authority of the Office of the Comptroller of the Currency (OCC) to issue Special Purpose National Bank Charters (Special Purpose Charters) to FinTech companies. The complaint, filed in the United States District Court for the District of Columbia, alleges that the OCC lacks the authority under the National Bank Act (NBA) to issue Special Purpose Charters to non-depository FinTech companies (see our April 2017 Maryland Legal Alert for details about the OCC's recently released supplement to its Licensing Manual providing more details about the proposed chartering process for Special Purpose Charters). The CSBS argues that under the NBA the OCC can only issue national bank charters to firms engaged in the "business of banking" and that the OCC needs Congressional approval to issue Special Purpose Charters to non-depository FinTech companies. Since the OCC announced its plan to issue Special Purpose Charters late in 2016, state regulators have voiced concerns that the Special Purpose Charters would allow non-banking technology firms to avoid state laws and would undermine the ability of state regulators to protect their respective residents. The CSBS complaint seeks declarative and injunctive relief to stop the OCC from issuing any Special Purpose Charters. Please contact Christopher Rahl for more information on this topic.