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Federal Judge Dismisses CSBS’ Second Lawsuit against OCC’s Fintech Charter

D.C. District Court Judge Dabney Friedrich has dismissed the latest lawsuit brought by the Conference of State Bank Supervisors (CSBS) against the Office of the Comptroller of the Currency (OCC) over the agency’s authority to offer national bank charters to fintech companies. This most recent ruling is the second such lawsuit that has been dismissed by the federal court since the OCC's July 2018 announcement that it would start accepting fintech charter applications. (The first suit brought by the CSBS was thrown out in April 2018, also by Judge Friedrich.)

However, recently Judge Victor Marrero of the U.S. District Court of the Southern District of New York did permit a similar lawsuit against the OCC by the New York Department of Financial Services to proceed. CSBS President John Ryan indicated that the group will continue its support of the NY DFS suit, "which is proceeding over the same objections the OCC raised in the CSBS suit."

OCC spokesperson Bryan Hubbard stated that the agency will "continue to defend its statutory authority to issue national bank charters, including special purpose national bank charters." Mr. Hubbard also commented, "It is important that the regulatory framework for the national banking system is allowed to evolve so that it can continue to meet the changing needs of consumers, businesses, and communities it serves and so that we maintain the health of a dual banking system."

To date, the OCC has not received any applications for fintech charters since its July 2018 announcement. This seems to at least be in part due to uncertainty caused by the pending lawsuits.

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