Wednesday, June 9, 2021
On June 3rd, the United States Court of Appeals for the Second Circuit (Court) decided Lacewell v. Office of the Comptroller of the Currency (here). I’d previously blogged about the “Dueling Law Professor Amicus Curiae Briefs” (here and here, see Appendix A of the Opinion for a listing of these briefs) in this heavily watched federal fintech charter case about whether the Office of the Comptroller of the Currency (OCC) has the authority to issue special-purpose national bank (SPNB) charters for fintech firms “engaged in the ‘business of banking,’ including those that do not accept deposits.” I promised to update BLPB readers when the Court rendered its decision.
In a nutshell, the Court reversed the district court's amended judgement and remanded “with instructions to enter a judgement of dismissal without prejudice.” The Court explained that DFS [the New York State Department of Financial Services, of which plaintiff Lacewell is Superintendent] lacked “standing because it failed to allege that the OCC’s decision caused it to suffer an actual or imminent injury in fact and...that DFS’s claims are constitutionally unripe for substantially the same reason.” Given these considerations, the Court stated that it did not have the jurisdiction to “address the district court’s holding, on the merits, that the ‘business of banking’ under the NBA [National Bank Act] unambiguously requires the receipt of deposits, nor whether that holding warrants setting aside Section 5.20(e)(1)(i) [OCC regulation permitting issuance of SPNB charters] nationwide with respect to non-depository fintechs applying for SPNB charters.” It added that “we express no view on the district court’s determinations regarding these issues.”
Of course, what constitutes the business of banking – whether deposit taking is required by the NBA to be a chartered bank – is the critical issue. Stay tuned! In the meantime, law firm analyses are available (for example, here and here) for readers interested in a more extensive discussion of this decision!