Markets Wired

WASHINGTON—The Conference of State Bank Supervisors yesterday withdrew its lawsuit filed with the U.S. District Court for the District of Columbia challenging the Office of the Comptroller of the Currency (OCC) authority to charter an uninsured deposit-taking national bank.

In December 2021, Figure Technologies amended their charter application for Figure Bank, National Association, to offer FDIC-insured deposit accounts. In connection with this amendment, the organizers will apply to the Federal Deposit Insurance Corporation (FDIC) for deposit insurance, and Figure Technologies, Inc. will apply for approval from the Board of Governors of the Federal Reserve System to become a bank holding company under Section 3 of the Bank Holding Company Act.

While the OCC maintains that it has the authority to charter an uninsured institution, including one that takes deposits, Figure Technologies’ decision to amend the application and seek a full service charter rendered the lawsuit moot.

“I am pleased that the OCC can now consider Figure’s application without the cloud of a lawsuit. The amendments to Figure’s banking applications, if approved, will help ensure that the innovative activities engaged in by the bank are done in a safe, sound, and responsible manner, on a level playing field and fully within the bank regulatory perimeter,” said Acting Comptroller of the Currency Michael J. Hsu.

“There needs to be less regulatory competition and more coordination,” Comptroller Hsu added. “We must modernize the regulatory perimeter as a prerequisite to conducting business as usual with firms interested in novel activities. Modernizing the bank regulatory perimeter cannot be accomplished by simply defining the activities that constitute ‘doing banking,’ but will also require determining what is acceptable activity to be conducted in a bank. Consolidated supervision will help ensure risks do not build outside of the sight and reach of federal regulators.”