Charter Impasse Between State and Federal Regulators Leaves Fintechs in the Dark

By Daniel Bethencourt

Dozens of fintech firms are delaying their applications for special-purpose banking charters from the U.S. Office of the Comptroller of the Currency after state officials filed a civil complaint seeking to block the federal regulator, say sources. The lawsuit, which targets the OCC on behalf of the Conference of State Bank Supervisors, aims to scrap the recently unveiled federal charter system for fintechs altogether, arguing that it exceeds the U.S. Treasury Department's authority, unfairly preempts state rights and was introduced without the 90-day comment period that typically follows a proposed regulation. The case represents a "bid for power from state...