The New York State Department of Financial Services (NYDFS) recently asked the Second Circuit Court of Appeals to affirm a lower court decision blocking the Office of the Comptroller of the Currency (OCC) from issuing charters to financial technology (fintech) companies. NYDFS argues the OCC lacks the authority to issue the charter to fintech companies under the National Bank Act (NBA). The NBA created the OCC and granted it the authority to issue national charters to institutions engaged in the "business of banking." NYDFS claims that throughout the nineteenth and twentieth centuries, it was understood that accepting deposits was an indispensable component of the "business of banking" within the meaning of the NBA. NYDFS argues the NBA reserved to the states the authority to regulate non-depository institutions and the transmission of money and to protect citizens from usury.

We anticipate the case may have to go to the United States Supreme Court to be resolved.