OCC Victory In Second Circuit Not A Clear Victory For Fintech Charters

In Short

The Situation: The Court of Appeals for the Second Circuit reversed the judgment of the Southern District of New York ("SDNY") in Lacewell v. Office of the Comptroller of the Currency. The Second Circuit ruled in favor of the Office of the Comptroller of the Currency ("OCC"), reversing on procedural grounds the SDNY's decision enjoining the OCC from issuing special purpose national bank ("SPNB") charters to nondepository financial technology ("fintech") firms.

The Result: The Second Circuit did not rule on the merits of the challenge by the New York State Department of Financial Services ("NYDFS"), New York's banking regulator, to the OCC fintech charter. The Second Circuit chose not to take a position on whether the "business of banking" under the National Bank Act ("NBA") requires the acceptance of deposits as a condition to eligibility for an OCC charter. Instead, the Second Circuit dismissed the case without prejudice after deciding that the