On Tuesday (September 3, 2019), the U.S. District Court for the District of Columbia issued an order dismissing a lawsuit filed by the Conference of State Bank Supervisors (CSBS) seeking to block the Office of the Comptroller of the Currency (OCC) from issuing federal charters to fintech companies. As explained in a prior blog post, in April 2018, the same court dismissed a prior version of the lawsuit, finding that the CSBS did not have standing to sue because the OCC had not yet officially decided that it would issue fintech charters. For the same reason, the court found that the CSBS's claims were not ripe for adjudication. The CSBS re-filed the lawsuit in October 2018, and the OCC then moved to dismiss the re-filed lawsuit.
In Tuesday's order, U.S. District Court Judge Dabney L. Friedrich found that the CSBS continued to lack standing to sue and that the CSBS's claims were not ripe for adjudication. Judge Friedrich explained that the CSBS still had not alleged that any fintech company had applied for a charter, let alone that the OCC had issued any fintech charters.
The CSBS's re-filed complaint highlighted two recent events: (1) the Senate confirmed Joseph Otting as Comptroller of the Currency in November 2017, and (2) the OCC finalized and released its policy on chartering fintech companies on July 31, 2018. In the policy, the OCC announced that it would begin accepting charter applications from fintech companies. However, Judge Friedrich found that the CSBS continued to lack standing to bring the lawsuit because the harms it alleged were "contingent on whether the OCC charters" a fintech company, and no company had even applied for a charter. For the same reason, the court found that the CSBS's challenge was not yet ripe for adjudication.
As explained in a prior post, in May 2019, a federal district court in the Southern District of New York issued an order denying a motion to dismiss a similar lawsuit filed by the New York Department of Financial Services (DFS), which also sought to block the OCC from issuing fintech charters. In that case, Judge Victor Marrero rejected the OCC's argument that the challenge was premature. In a footnote in Tuesday's order, Judge Friedrich "respectfully disagree[d]" with Judge Marrero's decision to the extent the reasoning in the two opinions conflicted. The lawsuit by the DFS remains pending in New York federal court.
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