CSBS and OCC Gear Up for Round 2

The Conference State Bank of Supervisors (CSBS) has filed another complaint in the U.S. District Court for the District of Columbia against the Office of the Comptroller of Currency (OCC). And all in an effort to prevent the OCC from granting national bank charters to nonbank entities – potentially impacting fintechs significantly, according to the press release.

As previously reported, the OCC announced plans to begin accepting fintech applications for national bank charters in August of this year. And this has been met with both speculation and support across the payments ecosystem. While the CSBS called the OCC charter a “regulatory train wreck in the making,” others have been forthcoming with support and encouragement.

Most recently though, CSBS has made its resistance known through claims that the fintech charters in question “exceed the authority granted by congress,” according to the same release.

CSBS president John Ryan goes on to say (in the same release) that “common sense and the law tell us that a nonbank is not a bank. Thus, CSBS is calling on the courts to stop the unlawful, unwarranted expansion of powers by the OCC.”

The purpose of the charter is to provide the means necessary for fintechs to provide (some) banking services. And with the most recent proposal, fintechs could apply for a single charter that would allow them to operate in every state, versus applying in every state where business is desired.

And this, of course, spurs banking officials to respond as such due to the potential monetary loss this could bring to their portfolio.

This is the second attempt the CSBS has made to sue the OCC. The first attempt was dismissed by a federal court judge on grounds that the OCC had not yet committed to any forward momentum, according to the CSBS release.

But in light of the OCCs recent announcement to begin accepting applications this year, it seems the outcome could be a bit different this time around.