Vullo v. Comptroller of the Currency

The National Bank Act (NBA) vested the Office of the Comptroller of the Currency (OCC) (defendant) with the authority to charter national banks. A bank could receive a national charter if, after a careful examination of the facts, the OCC determined that the bank appeared lawfully entitled to commence the business of banking. In 2003, the OCC amended its regulations to allow it to issue special-purpose national bank (SPNB) charters for special-purpose banks that conduct activities that are not fiduciary but conduct at least one of the core banking functions of receiving deposits, paying checks, or lending money. In 2016, the OCC began considering whether to accept applications for SPNB charters from financial-technology (fintech) companies that did not receive deposits, and in 2018, the OCC announced that it would begin to accept and review such applications (the fintech decision). Maria T. Vullo, the Superintendent of the New York State Department of Financial Services (DFS) (plaintiff), brought suit in district court challenging the fintech decision. DFS believed that the fintech decision undermined DFS’s, and therefore New York’s, ability to regulate and protect its financial markets by exempting new fintech-chartered entities from existing federal standards. DFS sought declaratory relief, asking the court to find that the fintech decision was unlawful because it exceeded the OCC’s authority under the NBA. The OCC moved to dismiss the complaint, arguing that the language of the NBA was ambiguous and the court should give deference to the OCC’s interpretation of the ambiguous language to mean a nondepository institution can be in the business of banking.