State Banking Regulators Take OCC To Court Over Fintech Charters

State regulators filed a complaint against the Office of the Comptroller of Currency ("OCC") in a bid to prevent the creation of a special-purpose national charter for fintech companies. The complaint was filed in the United States District Court for the District of Columbia by the Conference of State Bank Supervisors ("CSBS"), a nationwide organization of financial regulators from all 50 states.

The state regulators allege that the creation of a national bank charter for nonbank companies goes beyond the OCC's authority under the National Banking Act and other federal banking laws. The thrust of the complaint is that the OCC is only authorized to charter institutions that engage in the "business of banking" (i.e., in activities that at a minimum require receiving deposits), and that a special-purpose charter for nonbanks would require specific congressional approval. The state regulators also argue that (i) such a special purpose charter could be extended to a