- The Office of the Comptroller of the Currency (OCC) lacks the legal power to grant a bank charter to a non-bank entity that’s ineligible for federal deposit insurance, the U.S. District Court for the Southern District of New York ruled Monday, American Banker reported.
- The ruling marks a blow to the OCC's special purpose fintech charter, which the regulator proposed in 2015 to give fintech companies access to the nationwide financial system without needing a license in all 50 states.
- The Conference of State Bank Supervisors and the New York Department of Financial Services filed separate lawsuits arguing against the OCC.
Judge Victor Marrero, ruling in favor of the New York regulator, said the National Bank Act's "business of banking" clause "unambiguously requires that, absent a statutory provision to the contrary, only depository institutions are eligible to receive national bank charters from the OCC," according to American Banker.
Marrero in May rejected the OCC’s motion to dismiss the lawsuit.
An OCC spokesperson said the agency was "reviewing the ruling to determine the next steps," according to American Banker.