About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

1 1 (July 16, 2021)

handle is hein.crs/goveeaq0001 and id is 1 raw text is: Congressional ______ *.Research Service inforng the qeislative debate since 1914___________________ Second Circuit Dismisses New York State Challenge to OCC's Fintech Charter Authority July 16, 2021 On June 3, 2021, in Lacewell v. Office of the Comptroller of the Currency, the U.S. Court of Appeals for the Second Circuit dismissed a challenge by the New York State Department of Financial Services (DFS) to a regulation of the Office of Comptroller of the Currency (OCC) under which OCC will consider applications for special purpose national bank (SPNB) charters by non-depository financial institutions, particularly financial technology companies (fintechs). In Lacewell, the three-judge panel unanimously held that DFS failed to present a justiciable claim because it had not alleged a sufficient injury to establish either its standing to challenge OCC's regulation or that its claims were ripe for adjudication. The Second Circuit's decision reversed a 2019 district court judgment holding that deposit-taking is a requirement of the National Bank Act's (NBA's) business of banking clause and barring OCC from issuing SPNB charters to non-depository fintechs anywhere in the country. Fintechs provide an array of products and services. Some supply the financial services industry with digital and software technologies. Others deliver web-based, technology-enhanced financial services to businesses and consumers. Such services include loans, payment processing, financial planning, and digital currencies. Currently, the regulation and supervision of fintechs offering bank-like services, such as lending or payment processing, is a matter of state law, meaning that fintechs generally may operate only in states in which they are registered and must comply with the varied laws of those states. A national bank charter would mean that a fintech could benefit from federal preemption of state licensing and consumer protection requirements. This Legal Sidebar first discusses the background and court decisions in Lacewell. Next, it provides a description of initial filings in Conference of State Bank Supervisors v. Office of the Comptroller of the Currency (CSBS v. OCC), a similar federal district court case. Finally, the Sidebar offers considerations for Congress. Background The NBA authorizes OCC to charter national banks to commence the business of banking and refers to national banks as associations to carry on the business of banking. Based on this statutory language, OCC promulgated a regulation in 2003, 12 C.F.R. @ 5.20(e)(1)(i) (Section 5.20(e)(1)(i)), declaring its authority to charter SPNBs, which are defined as institutions that conduct at least one of three core banking Congressional Research Service https://crsreports.congress.gov LSB10623 CRS Legal Sidebar Prepared for Members and Committees of Congress

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Purchase Access

Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most