We usually don’t blog about financial regulatory nonevents, but sometimes it is useful simply to point out when something is just that. Our “nonevent event” example of the day is the April 30 dismissal (read the accompanying order here) by the US District Court for the District of Columbia of the Conference of State Bank Supervisors (CSBS) lawsuit against the Office of the Comptroller of the Currency (OCC), where the CSBS challenged the OCC’s authority to issue national bank nondepository fintech charters. The court dismissed the lawsuit in part for lack of “ripeness,” which is administrative lawspeak for “there’s nothing to challenge here.” Put simply, the OCC has not chartered any fintech banks and has not even issued final guidance on the chartering process, and the court therefore found itself without anything to review or decide. Administrative law aficionados therefore should not be at all surprised by that aspect of the court’s decision and reasoning. As the court trenchantly stated, “Indeed, there may ultimately be no case to decide at all if the OCC does not charter a Fintech.” A similar lawsuit against the OCC that was filed by the New York State Department of Financial Services was dismissed last year on similar grounds, and we surmised at that time that the CSBS suit might suffer the same procedural fate.
Or is the CSBS ruling a total nonevent? Perhaps more interesting is the court’s ruling that the CSBS also lacked constitutional standing to bring the action, saying that the CSBS did not allege an imminent injury in fact that could be remedied by a court decision. The CSBS did allege injury to its members resulting from the OCC’s fintech charter actions, but the court rejected that assertion, saying that speculative allegations of possible future injury to its members are not enough to confer standing on the CSBS.
So the matter is not over. If the OCC decides to charter a fintech national bank—and right now whether it will do so is up in the air—the CSBS presumably will be back in court to challenge the OCC approval, and because the court’s April 30 dismissal was without prejudice, CSBS may refile its action in the future. But, the CSBS will have to address squarely the standing issue that the court raised in the April 30 dismissal. Although the court’s standing ruling is closely intertwined with its ripeness ruling because both are based on the court’s rejection of speculative future injury, the court’s ruling nonetheless suggests that CSBS’s ability to prevail on the standing issue in the future is not certain.