State banking regulators and the Office of the Comptroller of the Currency ("OCC") are continuing to fight over who will regulate FinTech companies. As our readers know, in April the Conference of State Bank Supervisors ("CSBS") sued the OCC seeking a judicial declaration that the OCC exceeded its statutory authority under the National Banking Act when it proposed granting FinTech charters. The OCC has neither amicably resolved the dispute, nor backed down. Instead, it filed a motion last week to dismiss the CSBS's complaint for lack of jurisdiction and failure to state a claim, arguing that the complaint was "fatally premature" and alleged only "speculative" harm.
Although the OCC's motion attacked the merits of the complaint, arguing that it has the authority to issue FinTech charters, the motion is based primarily on arguments that the CSBS's complaint is premature. The OCC emphasized that it had not yet made any final decisions regarding FinTech charters, nor issued any such charters. Absent any such action, the OCC argued that the complaint must be dismissed on various grounds, including that the CSBS lacked standing because it cannot show how it was harmed by any OCC action, that CSBS failed to state a claim under the Administrative Procedure Act — which requires final agency decisions — and that the issues were not ripe for judicial review.
Even if this motion is granted and the case is dismissed, the issue of which regulator ultimately has the authority to regulate FinTech will remain unresolved. Rather, it would merely be postponed until the OCC makes a final decision to issue FinTech charters, which the OCC has given every indication that it still intends to do. In the meantime, FinTech companies are left without much guidance as to who will be regulating their industry, much less what the regulations will be and how they will be implemented. As we have noted before, this ambiguity undermines the development of the FinTech industry and may push FinTech companies to move outside the U.S. It is in everyone's interest to have these regulatory turf battles resolved quickly.
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