yes thank you good morning in may please the court christopher connelly from the u s attorney's office on behalf of the office of the comptroller of the currency the district court aerate in sri respects the st it incorrectly held that the new york department of financial services fent second the district court erred in declining to extend chevron deference to o c c interpretation of the national bank act instead of holding that the act unambiguous lee requires that institutions must take deposits in order to qualify for a charter and finally the district court erred by prohibiting o c c from entertaining charter applications from all thin text nationwide regardless of whether those phone taxed have any nexus to new york there still has been no application of it to my knowledge there has been no application no application submitted and no application under consideration at this point aren't you do you concede if they were i know they was  circumstances too much response that i bank of tokyo obviously was not a special purpose national bank chartering issue so so we're talking about a different different activity by o c c we're not talking about the issu charter i believe it was a conversion of the conversion of branches i believe to to it being federally regulated so i don't know that there's a one to one correlation between what they describe there and any additional and it allows o c c to begin to impose some some requirements on the bank and preparation for a final approval there's an argument to be made that at that point new york might be able to articulate  well your honor i think that's one of the things that that speaks to the standing right next to shoes in this case which is that the term fan tack can be applied very broadly to our host of of entities that are engaged in a host of business activities yes but of  in the business of banking because he lends money on a regular basis and lending money and is enough to make you engage a regular basis i don't mean if i lend money to my sister i mean someone whose regular practice i functions but that is well but but that's what you are regulation says is that that's all it states to be engaged in the business vang's of yes you have to engage in at least one of those three activities and all right neighborhood that has a sign outside that says we have a deal with the bank they don't make burgers we don't extend credit if they were in there gotten that hypothetical deal with the bank and started sending credit maybe even cash advances to some of their if they're in the biz they could be in the business of banking under this regulation and would again eleven dollars could say that they were engaged in one of what it was c c s identified as the core banking function but you say that you say this is part of my that maybe i'm that in order to be in the business of banking you must be a deposit for a institution you must take the fun of it and questions for them about whether that's necessarily right i could imagine these an argument see an argument that they're in the business of banking because of the find of lending that they do but another way of looking at this case is is your regulation at all reasonable if you're saying that all it has to be in the business of banking is lending money isn't that what the regulation says the regulation says that you can apply for a charter if you engage in one of these three core banking you can you can apply for the charter and again i think we will go live shark is definitely in and maybe the bar and grill as a possible they might want to move i want to give it to them but they are in the business of banking as difference i think there's i think there's a distinction and it may be kind of a fine one but there's a distinction between engaging in an activity that one might conceivably say is one of the core banking functions but then being gauged in the business of banking when you look at when you look at the way that that term is used in the national bank act and the provision in the national bank act that authorizes well but i see that the issue in this case is whether your regulation is a it's i mean we get to the merits whether your regulation is a reasonable instruction of the business of banking and i i thought that your but the regulations and seems to me you've confirmed is that anyone who on a regular basis lamb of money is in the business of banking under that to ensure the safety and soundness of the banking industry and and to protect consumers of the banking industry and so just in terms of the general purpose of the n b a and what it's meant to do and what i was c c is is obliged to do you know the show the loan shark the bar and grill they're simply not going to be entities that are in that are going to receive those types of charters and in terms of you know  money i think that's i think that i think that ultimately would be where o c c would come out but when we're talking about we're talking about but there are others that say doesn't that tell us anything about what the business of banking actually that's true but it wouldn't be silly to me to say that a company that offers other types of financial services like mortgages or for payment like on line payment services and things like that would banking and could properly be regulated through the rigorous regulation scheme that the n b a provides and i may i may well be with you about that and i may well agree with you that taking not be necessary but again this brings me back to my question of what is the issue if we get to the merits is the issue something about whether your regulation makes any sense at all as an interpretation raises in opposition to most e c is chartering proposal here and and receptive in each of these types of applications is that an entity needs to take the posits an order to be  herring here because i'm having a hard time understanding how you would do anything that could be called a check if you're not either taking the funds against which the checks are written or you are extending credit  times when there are these neighborhood places where people can get their paychecks can't people who don't have bank accounts is that is that what is that what cashing paying checks since your honor that might be an example of of  yes well what do what do you regard it as as as what you're interested in what you what do you regard as paying checks of a nature that might lead you to qualify somebody under under  regulation as i said here i don't have an example of an institution that might be be soley or primarily involved in the paying of checks the example that you gave may be an example of an instance touche and that that would be and that's what you mean by that i'm not sure i i don't know i don't know that that would be primarily or exclusively what we'd be talking about when we'd be talking about bank checks and again i  apologize but i don't have an example of an institution that whose sole core banking function would be the paying of checks i think though that in some respects all of this  standing in writing this issue's which is until you have an actual applicant with an actual business model and an actual geographic scope of proposed activities it's very difficult to to articulate any actual imminent harms that are that's befalling d f s as a result of o c c is mere receptive ity to receiving these types of applications that also speaks to obviously the prudential rightness issue even if you think that their stand  stand standing now based soley on on the c s willingness to accept these applications there are still good reasons to refine from from a judicial decision until we have an applicant who that the application has been submitted and then o c c needs to do the work of pulling unary conditional approval and i think what happens primarily at the preliminary conditional approval stage is that o c c is going to place to go ahead go ahead answer the question and i again just to reiterate just bianco i think that it would probably be at least a matter of months given the time frame and the work that o c c needs to do before a charter is reaches the final approval stage i say i'm a little puzzled by by maybe i should be waiting to say this to the other side but the notion that in order to engage in banking one needs to take deposits seems to be odd to me in the context of other history because historically of the banking function when you when you look back over history it at that at the long as in france lynch's hypothetical i don't know that that the method she took deposits made that maybe they did i don't know but but eleven thinks historically of those who were regarded as the bankers to the the bankers who got wealthy by financing financing the right side and in political and royal disputes and stuff like that they were lenders that was that was what that was what a what a what a banker was was somebody who who loaned money and one of the things that that gave jews a big advantage in that kind of trade was that charging interest was was was forbidden to to to christians  able to to charge interest and and therefore achieved a certain amount of dominant yes in the in what was known as the banking industry which didn't involve  marble and columns but it was kind of a personal kind of her personal business so anyway i'm just i'm just puzzled by the by the in the abstract by the notion that  that in order to be a bank you need to accept deposits but anyway that's something i will ask the other side but i wonder whether you have something to say about about about the history in that in that regard well your honor i mean i think i think your your point is well taken and i think it's correct nobody disputes that taking deposits is a core banking function it's something that banks rightly do but it's not something that banks always do or always have done it is it is one of a number of activities that banks often engage in and i think you see this reflected both in the language of the national bank that self which does not make the deposit taking  mandatory requirement in the history of the of the legislative history particularly as new york brings up the in the new york banking act which did talk about banks having to be banks at discounted deposit at the national bank act nationally chartered type of bank they frequently hold deposits but they're frequently what's called like an affiliate deposit it's a it's a posit that's clase there i guess by another financial it's it's not the kind of place where you go in and charter to entities that make loans or transmit funds but do not take deposits and it's a statute we're construing here not what banking has ever been although what banking has ever been shed some light on the meaning of words but the statute doesn't say that well we could go right to the statute or we could talk about standing in the statute doesn't say it in so many words because the statute was written at a time when definitions were not definitions of terms were not the norm but the purpose of the national bank act in eight hundred and sixty three was very specific it was to create state and stabilize a uniform money supply banks st banks were creating something that was used just currency by issuing bank notes or loans secured by to posit a st of gold and  national banks and the national regulator were created to stabilize the value of those notes so they could function as a national currency that's why the office created by the bank act is called the controller of the currency and the statutory text reflects that purpose namely to create national institutions to engage in the business a banking which at that time had the settled meaning of taking deposits and making loans or issuing notes backed by those deposits the term isn't defined in the statute twelve u s c twenty four seventh's says a national bank shall have the power necessary to carry on the business of banking and then lists a number of powers that are useful for that purpose but aren't definitional they are very if your point then that that the institution needed to take deposits in order to have a sufficient backing to make the currency reliable is a point that is correct that is correct and we know that receiving deposits was essential to banking under the n b a for several reasons in addition to that general purpose that was paramount in one thousand nine hundred and sixty three when the i c c was created and st authorized to charter national banks st it was receiving deposits was essential to banking under new york's eight hundred and thirty eight banking statute and that was a model for the federal statute the new york statute authorized use very similar language authorize the formation of institutions to carry on the business of banking and then listed discounting bills notes stet receiving to posit and so forth and so on  and soon after that statute was enacted some entities purported to be banks of circulation only with no deposit and then eight hundred and forty eight dollars the new york legislature rejected that practice correct but the federal n b a was undisputedly following the new york model and it's i think it must be read this incorporate a in the new york understanding of the business of banking it didn't use the clarifying addition but by eight hundred and sixty three when the federal law was enacted the clarification was no longer necessary and surely if congress were rejecting a central feature of the new york statute it would  else entirely it can't become the business of selling cars or the business of loan sharking the the whole idea after all of the national bank act was to stabilize the currency to make it secure and one of the ways it did so an important way at that time was to require receiving deposits later it came to pass that there was a federal deposit insurance and that was another way  and important way to make banking secure and when federal deposit insurance was established national banks were required to have it that is twelve u s c section two  two my colleague says that they only were permitted to have it because eight hundred and fifteen a one says a national bank may obtain it is eligible to obtain it but that's in a part of the statute that or or contribute to the circulation of money the idea the whole idea of the national bank act and the o c c charter national banks was to create a set of institutions that would generate something like currency this is before the federal government took over the issuance of currency and it would be secure and it would be made secure by to punishment later it would be made secure by insurance i'd like to point out that when o c c tried to charter a non depository bank a trust bank it took an amendment of the n b a to save that charter the n b a was amended mid litigation mid litigation to challenge that charter and the thirty two dollars specifically authorized the formation of trust banks and the rd circuit that was at that time hearing a challenge to that charter said it was upholding the charter because of the amendment and otherwise it wasn't sure it could it didn't decide that it couldn't but if it didn't decide that it wouldn't so this is mother where even a single circuit and now has never tried to charter a non depository institution sound there's not a lot of litigation and i get well that's that that may bring us back to the standing that you mean you want to start with them is logically prior to one of the problems i have with this case is we could look at this regulation in the abstract and wonder whether banks just have to lend money because that's how the military got started here or is it about what they are going to do or not do suppose they came at somebody applies which has a much more complicated set of businesses that it does one of them is lending money with the things that banks now wouldn't we then have them be considering whether on the totality of the circumstances that institution was engaging in the business of banking and therefore it was appropriately regulated well that would be a different claim and a different issue from the one that the district court decided that is d f s brought this case to  assert that o c c has no authority to charter any kind of non depository institution ok so the only in your view the only issue in this case on the  because the complaint challenge to the regulation and the reasonableness of the regulation the district court decide didn't assign that claim the district court found that the policy here was invalid because of the absence because it authorized charters to not to depository institution so if you concluded that that was incorrect then there should be remained for consideration of the other aspect institution then we would need more facts to to to determine whether that rule was implicated here we are here saying that the rule of law that the proper will that's not a correct statement that there's no clear indication that they ever will let me just say that when a national bank charter is issued to any non deposit institution d f s will be injured in several ways it will lose the ability to enforce new york's usury laws against that bank because that new bank because a national bank is governed by the usury laws of the home state and district court and there is not a single application so i think it's misleading to say that we're no applications there is an extensive pre filing interactive process that is specified in the manual and is common in permit granting situations in this area in the environmental area so that the filing of an application is very late in the process  of moving toward a license or or a permit and that no application was formally filed doesn't mean a draft application wasn't considered  and there o c c the controllers over time have publicly stated that they were processing applicants applicants so there must have been something we don't have access to this but there they are saying that the problem is their representation on is is a lot of big step toward an application you asked about how long it would take to actually issue a charter she says procedures provide for thirty days of  notice and after that if everything were ready to go if they had already interacted sufficiently with the putative applicant to establish a satisfactory application it would take another day or two t enforcement and to monitor for ford for conversion from state to federal regulation once there was a district court judgment in place it was pretty clear that nothing was going to happen until this court new york law and so the fact that before the complaint was filed o c c announced it was beginning to accept applications before the district court ruled that come trawler said publicly that a number of institutions are going through the application process maybe they didn't file a formal application but they were apparently going through the application process and then just six months ago the can the controller publicly stated he was ready to process applications from payments companies including non depository institution suggesting that there is a particular interest on the part of a c c in in something like pay pal or you know payment of payment transmitters so why were they saying that no as i say i say no application was filed that can be correct that no formal application has been filed and they could still be quite close to issuing a immediate reaction no the whole article is not quite i don't think that's quite right in that success in particular texas had standing to challenge the federal policy of deferring an immigration enforcement against parents of lawful residents before the policy went into effect on the ground that you would make if you went into effect you would make people eligible for driver's licenses and the driver's licenses would have costs that none of that happened because the policy was enjoying before it ever went into effect so it was the expected costs that the state was invoking the expected driver's license costs and in the office in stilwell the office of thrift supervision case  investor had standing to challenge a new office of thrift supervision rule that authorized financial certain financial institutions to limit the holdings of minority shareholders because on the grounds that some institutions will surely take advantage of their new authority to adopt such a rule and that will surely operate to the detriment of the plaintiffs who wanted to be a large minority shareholder so that was totally prospective and in the air alliance houston the states had standing to challenge a new e p a rule that would delay the effective date of the chemical that of an unknown another rule of the chemical disaster rule because that will lead to preventable disasters industrial explosions and so forth that will impose costs on stage those were all predictable but not guaranteed costs in the case of the texas  situation they never came into effect but still there was standing because they were foreseeable it just like this case and announced government policy every reason to expect it to be implemented imminently is enough to create a substantial risk of imminent harm and i'd like to contrast that with the recent census case where the government represented on the day of supreme court argument as well as earlier that practical obstacles to in implementation might will prevent any harm from occurring there's nothing like that here there is no suggestion that this will not go forward so there is no need to wait there is the same standing that there was in texas in stilwell and in air alliance to challenge a government regulation that authorizes conduct that will impose costs on the state there's no need to wait and it's risky to wait because as we've been discussing the time from formal application as distinguished from informal application to issuance of an o c c charter can be very short and in addition the a non depository institution no additional facts are needed to arrive at that to decide that legal question and and as i said if the court were to reject that claim and to think that it all depends then there would be then then it would remain and for for a determination of what is could you describe a characteristic institution that  that you that would adversely affect the state of new york if it were if it were a qualified tech institution what what would be the nature of the kind of institution that you think represents this kind of a threat to new york's regulatory authority maybe actually they range from very large and nationwide like what do they do what they prowl or bend mo that process might some of them might have been swans they also ate pay checks or transmit payments or transmit payments is not a not a qualifying thing it has to be either pay checks i don't understand it has to and whether r c c is interested in those institutions or not we don't know but as i say be exist from the nationwide well established corporations that do business in fifty states to the local fly by nights and everything in between and new york and the states have been regulating licensing and protecting consumers in those areas for one hundred and fifty years and  for to suddenly transfer all or some part of that industry state to federal regulation takes something more explicit then a new interpretation by the c it's governing statute it would tell i mean congress could certainly authorize such a thing but there is it hasn't done so and the fact that this would work such a dramatic transfer  deposits and that operates centrally on the internet or in some way through modern technology that makes it unnecessary or make makes them bypass than the taking of deposits and that reaches very broadly so far you've described google because you haven't even think also and also lends money to pay could also be could also be authentic under this under this or apple pay some of these payment transmitters and that is what most recently acting comptroller brock's publicly stated he wanted applications from payments companies which i take to mean companies that enable one to pay electronically to trent to transfer money that haven't already seen some indication of who is interested in applying and why do we need to speculate on that i mean the record may not reflect that but it is knowable isn't it and there in a district court record but i to but you have not sought discovery of who has has submitted any kind of documentation in the nature of a preliminary application or supply proposed application who well we any could be having this we could be having this discussion about knowing exactly who who is proposing to submit applications could we dock if not that sort of discovery supplement to or to the existing system of think tank was to create was to create a stable a more stable currency that the nation needed and it's an old statute it is not a totally open ended not you since the creation of national banks itself was so controversial in the st place that's another reason to be cautious about treating at as a as something that can be open ended re extended by the agency ahead with the with the proposal and that's something that's that's discussed and knowing circles i have seen no indication that this is being reevaluated no speculation in the press and no i have no other information i don't know that it's not so but i but i did this also this regulation after all goes back a long time there has been an interest in doing this at o c c since appears from the outside to be the case and i would say that he didn't have a question it is o c c seeking to expand its authority either properly or as we say beyond the authority that congress gave us and so o c c no matter who's been at the helm or at least through many iterations of its leadership has expressed an interest in doing it although it only response there could be there could i suppose might be increased by by centex that want to learn more about this and that might be thinking about putting in an application but again we would disagree with your idea that that's kind of any substantial stefano and a formal application process and we set out in our briefs there's going to be an application there's a an actual application put in a thirty day notice and comment period and then eventually there was going to be so we're just not there yet when when there's an application we're going to know and then you're going to to at least be able to begin to put some meat on the bones of the kinds of harms that d f s is alleging but it's also not in imminent harm  because this is very different from the cases that d f s relies on where you have an imminent harm and what it really comes down to is sheer it takes two to tango this is not a federal statute that's been enact and that process to to proceed for for you to even reach the point of imminent but ms underwood was saying that that putting it the way you just did is really quite on realistic because there is a long a long procedure in which before the application is actually submitted there is a discussion between a proposed applicant and o c c involving a hypothetical draft application that o c c might comment on and encourage changing it in one direction or another and responding in some ways and that one of the things i'm wondering is whether the way this case developed there was no discovery that there was very little information placed in the record about what's going on which leaves us very much in the dark about what is is being considered and o c c probably has i would guess might have a great deal of control over which applications actually are submitted st because o c c might well say to an applicant  well hold off for the moment we don't want you applying now you better wait but somebody somebody else is going to apply st and would have the ability to control the the  is the that the lack of ripeness that you are arguing is in large part the result of simply they're not having been inquiry into certain things that are knowable now and it might seem a lot more ripe if those facts were simply made a matter of record at this time your honor your honor and even to the extent that there are some sort of a woman airy discussions between between o c c and an entity that ms under are not talking about preliminary discussions she was talking about the likelihood that actual documents are being submitted in the form of an application but it's not a true application it's just a a draft application and that o c c is commenting on on it and giving it perhaps giving appliqued proposed applicants a sense of whether their application is likely to sail or not sail and if not why not and so forth even still until until an applicant takes that actual step of committing their application to writing in a way that they're going to place or o c c whether  extent their their potential business operations are going to implicate new york or going to potentially give rise to the types of harms that d f s articulated it remains conjectural it remains and it's not really indicated a great desire to have this applicant accepted but for the moment they're being told by o c c wait not yet it's too early for you to submit that will tell you when is the appropriate moment for you to to to put your application in and until then we are giving you these comments you would improve your application by by by this or by that by deleting this it seems to be we would be in a position to know to understand this case a lot better if those things that are knowable and could have been in the record were in the record as opposed to not being in the record what but any of those but any of those preliminary discussions or potentially like a draft application again it's it's still it's still conjectural it's still hypothetical because it's not necessarily the entity that's going to apply were the business model that the entity is going to propose i mean that's what we get when we get the actual application at the mr connerly you're saying that the limit mary if some if somebody has submitted in fact we don't know a preliminary into the potential for imminent harm ok and one last question about this procedural foster the revolver referred to and i did like the make sure i understand what it is what happened here is the state filed a and to the facts of the further activity but essentially the parties got together and said we agree both agree that the district court should now enter judgment for the plaintive for the state that's correct and that the district court determined that entities that do not accept deposits are not entitled to charters under the national bank act at that chevron step one the language of the national bank act on ambiguous requires the taking of deposits at that point further development of the nature of an applicant was not something that we were going to even be able to get to because the district court had determined that those know i don't know procedurally whether it's sending it back or or whether it will be d f s you know implementing it or instituting a new lawsuit based on the facts of an actual application when she says th might charter would be bad and your i have articulated what that might be is that i would disagree with that characterization of the nature of their complaint that their complaint is focused on what they claim is the necessity of deposit that is that that is the basis for their argument that that this charter and proposal by o c c that their willingness to accept these types of charter take discovery prior to the district court's decision with respect to standing to take discovery limited to the standing question discovery designed to to elucidate whether or not there argument is soley that non depository institutions are not entitled to special purpose national bank charters and given that it's undisputed that no non depository institution has applied for a special purpose national bank charter  i don't i don't think that if this wasn't standard turned standing turns largely on the on the on the harm and the likelihood of harm to the plaintiff in the case and i think now th