CSBS and OCC Battle Over Discovery in Fintech Charter Litigation

In early 2019, the legal battle between the Conference of State Bank Supervisors (CSBS) and the Office of the Comptroller of the Currency (OCC) over the proposed special purpose national bank (SPNB) charter for fintech firms intensified, with disputes over discovery and the ripeness of the case. The OCC had previously announced plans to issue SPNB charters to fintech companies and indicated expectations of approval by mid-2019 after meetings with applicants who were finalizing their applications. However, the OCC argued in court that no charter approval was imminent enough to warrant judicial review, stating approvals were 'several stages away.' CSBS challenged the OCC's authority to grant such charters, arguing they would undermine state regulatory frameworks.

No fintech company received an SPNB charter in March 2019, and the OCC noted that any charter filings or approvals would be publicly posted on its website. The litigation created significant regulatory uncertainty for fintech firms seeking national bank charters. This delay had broader implications for the BaaS landscape, as fintechs continued to rely on bank partnerships and state-by-state licensing rather than obtaining their own federal charters.