Court Opinion

ID: 4692469
Source: CourtListenerOpinion
Date Created: 2021-06-03 15:00:21.427893+00
Date Added: 2024-06-11T08:05:16.211495
License: Public Domain

19-4271
Lacewell v. Office of the Comptroller of the Currency

                       United States Court of Appeals
                                      for the Second Circuit
                            _____________________________________

                                             August Term 2020

                      (Argued: March 9, 2021              Decided: June 3, 2021)

                                         No. 19-4271
                            _____________________________________

    LINDA A. LACEWELL, IN HER OFFICIAL CAPACITY AS SUPERINTENDENT OF THE NEW
                 YORK STATE DEPARTMENT OF FINANCIAL SERVICES,

                                              Plaintiff-Appellee,

                                                    — v. —

    OFFICE OF THE COMPTROLLER OF THE CURRENCY, MICHAEL J. HSU, IN HIS OFFICIAL
              CAPACITY AS ACTING U.S. COMPTROLLER OF THE CURRENCY,

                                          Defendants-Appellants. ∗

                            _____________________________________

Before:                   LEVAL, LYNCH, and BIANCO, Circuit Judges.

      Plaintiff-Appellee the Superintendent of the New York State Department of
Financial Services (“DFS”) brought this action against Defendants-Appellants the
Office of the Comptroller of the Currency and the U.S. Comptroller of the
Currency (together, the “OCC”) to challenge the OCC’s decision to begin

∗
  Pursuant to Federal Rule of Appellate Procedure 43(c)(2), Acting U.S. Comptroller of
the Currency Michael J. Hsu is automatically substituted for former U.S. Comptroller of
the Currency Joseph M. Otting as Defendant-Appellant.
accepting applications for special-purpose national bank (“SPNB”) charters from
financial technology companies (“fintechs”) engaged in the “business of banking,”
including those that do not accept deposits. DFS asserts that this decision, and the
OCC regulation underlying it, exceed the OCC’s statutory authority under the
National Bank Act (“NBA” or the “Act”), 12 U.S.C. § 21 et seq., because, in DFS’s
view, the “business of banking” as used in the NBA requires that national banks
take deposits. The OCC moved to dismiss DFS’s complaint for lack of subject
matter jurisdiction and for failure to state a claim upon which relief could be
granted, arguing, inter alia, that: (1) DFS lacks Article III standing; (2) DFS’s claims
are constitutionally and prudentially unripe; and (3) the term “business of
banking” in the NBA is ambiguous and the OCC’s interpretation of that term to
include institutions that do not accept deposits is reasonable, such that it is entitled
to Chevron deference. The United States District Court for the Southern District of
New York (Marrero, J.) denied the OCC’s motion and held, in relevant part, that
DFS has Article III standing, that its claims against the OCC are ripe both under
the U.S. Constitution and as a matter of prudence, and that the OCC exceeded its
authority under the NBA because the Act unambiguously requires national banks
to engage in deposit-taking. After the parties agreed that no further factual
development was required in light of these holdings, the district court entered
judgment in favor of DFS, setting aside the OCC’s decision to accept SPNB charter
applications from non-depository fintechs nationwide. We conclude that DFS
lacks Article III standing because it failed to allege that the OCC’s decision caused
it to suffer an actual or imminent injury in fact, and we find that DFS’s claims are
constitutionally unripe for substantially the same reason.

       Accordingly, we REVERSE the amended judgment and REMAND to the
district court with instructions to enter a judgment of dismissal without prejudice.

                                               CHRISTOPHER CONNOLLY, Assistant
                                               United States Attorney, (Benjamin H.
                                               Torrance, Assistant United States
                                               Attorney, on the brief), for Audrey
                                               Strauss, United States Attorney for the
                                               Southern District of New York, New
                                               York, NY, for Defendants-Appellants.

                                           2
                                                    BARBARA D. UNDERWOOD, Solicitor
                                                    General (Steven C. Wu, Deputy
                                                    Solicitor General, Matthew W. Grieco,
                                                    Assistant Solicitor General, on the brief),
                                                    for Letitia James, Attorney General of
                                                    the State of New York, New York, NY,
                                                    for Plaintiff-Appellee. †

JOSEPH F. BIANCO, Circuit Judge:

         Plaintiff-Appellee the Superintendent of the New York State Department of

Financial Services (“DFS”) brought this action against Defendants-Appellants the

Office of the Comptroller of the Currency and the U.S. Comptroller of the

Currency (together, the “OCC”) to challenge the OCC’s decision to begin

accepting applications for special-purpose national bank (“SPNB”) charters from

financial technology companies (“fintechs”) engaged in the “business of banking,”

including those that do not accept deposits. 1 DFS asserts that this decision, and

the OCC regulation underlying it, exceed the OCC’s statutory authority under the

†   See Appendix A for a list of filings by amici curiae.
1 For ease of reference, this opinion makes use of the following defined terms: 12 C.F.R.
§ 5.20(e)(1)(i) (“Section 5.20(e)(1)(i)”); the Administrative Procedure Act (“APA”); the
Comptroller’s Licensing Manual Supplement: Considering Charter Applications from
Financial Technology Companies (“Licensing Manual Supplement”); the Conference of
State Bank Supervisors (“CSBS”); financial technology companies (“fintechs”); the
National Bank Act (“NBA” or the “Act”); the New York State Department of Financial
Services (“DFS”); the Office of the Comptroller of the Currency and the U.S. Comptroller
of the Currency (together, the “OCC”); and special-purpose national bank (“SPNB”).
                                                3
National Bank Act (“NBA” or the “Act”), 12 U.S.C. § 21 et seq., because, in DFS’s

view, the “business of banking” as used in the NBA requires that national banks

take deposits. The OCC moved to dismiss DFS’s complaint for lack of subject

matter jurisdiction and for failure to state a claim upon which relief could be

granted, arguing, inter alia, that: (1) DFS lacks Article III standing; (2) DFS’s claims

are constitutionally and prudentially unripe; and (3) the term “business of

banking” in the NBA is ambiguous and the OCC’s interpretation of that term to

include institutions that do not accept deposits is reasonable, such that it is entitled

to Chevron 2 deference. The United States District Court for the Southern District

of New York (Marrero, J.) denied the OCC’s motion and held, in relevant part, that

DFS has Article III standing, that its claims against the OCC are ripe both under

the U.S. Constitution and as a matter of prudence, and that the OCC exceeded its

authority under the NBA because the Act unambiguously requires national banks

to engage in deposit-taking. After the parties agreed that no further factual

development was required in light of these holdings, the district court entered

judgment in favor of DFS, setting aside the OCC’s decision to accept SPNB charter

applications from non-depository fintechs nationwide.

2   See generally Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837 (1984).

                                                 4
      We conclude that DFS lacks Article III standing because it failed to allege

that the OCC’s decision caused it to suffer an actual or imminent injury in fact, and

we find that DFS’s claims are constitutionally unripe for substantially the same

reason. Accordingly, we REVERSE the amended judgment and REMAND to the

district court with instructions to enter a judgment of dismissal without prejudice.

                                 BACKGROUND

I.    The Dual Banking System

      Financial institutions in the United States operate within a “dual banking

system.” Wachovia Bank, N.A. v. Burke, 414 F.3d 305, 314 (2d Cir. 2005) (“States

have a legitimate role in regulating certain banking activity, and it is often said

that we have a ‘dual banking system’ of federal and state regulation.”); accord

Watters v. Wachovia Bank, N.A., 550 U.S. 1, 15 n.7 (2007). Within that system, both

federal and state governments are empowered to charter banks and to regulate the

banks holding their respective charters.      Thus, banks with national banking

charters are primarily supervised by federal regulators, and banks with state

charters are largely, though not exclusively, subject to state regulation.

      On the federal side, the OCC is the bureau of the U.S. Department of the

Treasury “charged with assuring the safety and soundness of, and compliance

                                          5
with laws and regulations, fair access to financial services, and fair treatment of

customers by, the [federally-chartered] institutions and other persons subject to its

jurisdiction.” 12 U.S.C. § 1(a). In New York, DFS is the state agency responsible

for “the enforcement of [New York’s] insurance, banking and financial services

laws.” N.Y. Fin. Serv. Law § 102; see also id. § 102(c) (listing one of DFS’s “goals”

as “provid[ing] for the effective and efficient enforcement of [New York’s] banking

and insurance laws”). Among other duties, DFS is responsible for supervising

more than 200 New York-licensed state and international banks (with assets of

around $2.5 trillion), as well as approximately 600 non-bank financial services

companies (with assets of around $1 trillion).

II.   Statutory and Regulatory Context

      Under the NBA, the OCC has been granted the power to charter national

banks. Specifically, the NBA’s “[c]ertificate of authority to commence banking”

section provides that:

             If, upon a careful examination of the facts so reported,
             and of any other facts which may come to the knowledge
             of the Comptroller . . . it appears that [an entity applying
             for a federal banking charter] is lawfully entitled to
             commence the business of banking, the Comptroller shall
             give to such association a certificate . . . that such
             association has complied with all the provisions required
             to be complied with before commencing the business of

                                          6
             banking, and that such association is authorized to
             commence such business.

12 U.S.C. § 27(a) (emphases added). Although the term the “business of banking”

is not defined in the NBA, the Act does specify that once a bank receives a federal

charter—and thereby becomes a national bank—

             it shall have power . . . Seventh[,] [t]o exercise . . . all such
             incidental powers as shall be necessary to carry on the
             business of banking; by discounting and negotiating
             promissory notes, drafts, bills of exchange, and other
             evidences of debt; by receiving deposits; by buying and
             selling exchange, coin, and bullion; by loaning money on
             personal security; and by obtaining, issuing, and
             circulating notes . . . .

Id. § 24(Seventh) (emphasis added).

      In 2003, the OCC amended one of its regulations to give itself the ability to

issue SPNB charters. 3 See Rules, Policies, and Procedures for Corporate Activities;

Bank Activities and Operations; Real Estate Lending and Appraisals, 68 Fed. Reg.

70,122, 70,126 (Dec. 17, 2003). Specifically, the amended regulation provides:

             The OCC charters a national bank under the authority of
             the National Bank Act of 1864 . . . . The bank may be a
             special purpose bank that limits its activities to fiduciary
             activities or to any other activities within the business of

3 An SPNB, in this context, is a “national bank that engages in a limited range of banking
activities, including one of the core banking functions [i.e., paying checks or lending
money], but does not take deposits and is not insured by the Federal Deposit Insurance
Corporation (FDIC).” Joint App’x at 120.

                                            7
             banking. A special purpose bank that conducts activities
             other than fiduciary activities must conduct at least one
             of the following three core banking functions: Receiving
             deposits; paying checks; or lending money.

12 C.F.R. § 5.20(e)(1)(i) (“Section 5.20(e)(1)(i)”) (emphasis added).           By that

amendment, the OCC expressly pronounced that it had the authority to issue

national bank charters to institutions that do not receive deposits for the first time

since the NBA was enacted in 1864. 4

      DFS alleges that, in March 2016, the OCC first contemplated issuing SPNB

charters to non-depository fintechs 5 and released a white paper wherein it

“identifie[d] the impact of fast-paced developments in financial services

technology as a much needed subject of regulatory inquiry.” Joint App’x at 19. It

then started the lengthy process of determining whether to issue SPNB charters to

non-depository fintechs.      More specifically, the OCC began by releasing an

4 Both DFS and the OCC note that the OCC has yet to grant a federal charter to a non-
depository financial institution of any kind pursuant to its authority under
Section 5.20(e)(1)(i).
5  The OCC describes fintechs as “thousands of technology-driven nonbank companies
offering a new approach to products and services . . . . Fintech companies vary widely in
their business models and product offerings. Some are marketplace lenders providing
loans to consumers and small businesses, others offer payment-related services, others
engage in digital currencies and distributed ledger technology, and still others provide
financial planning and wealth management products and services.” OCC Br. at 7 n.1
(quoting Joint App’x at 47–48).
                                           8
additional white paper in December 2016 titled “Exploring Special Purpose

National Bank Charters for Fintech Companies,” id. at 19–20, 46, which noted that

“[a] question raised by technological advances in financial services and evolving

customer preferences is whether it would be appropriate for the OCC to consider

granting a special purpose national bank charter to a fintech company,” id. at 48.

The OCC also stated that its ability to grant SPNB charters to fintechs would be

based upon Section 5.20(e)(1)(i), which, as mentioned supra, does not require

deposit-taking.   Further, it pointed out that “[s]tate law applies to a special

purpose national bank in the same way and to the same extent as it applies to a

full-service national bank,” noting that “[e]xamples of state laws that would

generally apply to national banks include state laws on anti-discrimination, fair

lending, [and] debt collection,” among others. Id. at 51.

      Thereafter, the OCC received and, in March 2017, responded to comments

from DFS and other interested parties concerning its plan to grant SPNB charters

to fintechs—including those that did not receive deposits—set forth in its

December 2016 white paper. In response to criticism that this plan exceeded the

OCC’s statutory authority under the NBA insofar as it enabled the OCC to grant

SPNB charters to non-depository institutions, the OCC asserted that “[t]he [NBA]

                                         9
does not require that a bank take deposits in order to be engaged in the ‘business

of banking.’ Rather, under the Act, performing only one of [either accepting

deposits, paying checks, or lending money] is sufficient to be performing [the] core

banking functions” required by Section 5.20(e)(1)(i). Id. at 132–33. 6

      On July 31, 2018, the OCC announced its final decision to accept applications

from—and grant SPNB charters to—fintechs, including those that do not receive

deposits, pursuant to Section 5.20(e)(1)(i) (the “Fintech Charter Decision”). In the

press release announcing its decision, the OCC stated that “it [would] begin

accepting applications for national bank charters from nondepository financial

technology (fintech) companies engaged in the business of banking.” Id. at 165.

That same day, the OCC also published a “Policy Statement on Financial

Technology Companies’ Eligibility to Apply for National Bank Charters,” id. at 23,

167–70, and the “Comptroller’s Licensing Manual Supplement:              Considering

Charter Applications from Financial Technology Companies” (“Licensing Manual

Supplement”), id. at 23–24, 172–91. The policy statement made clear that the

OCC’s intent was to begin accepting SPNB charter applications from non-

6In March 2017, the OCC also released a draft supplement to the Comptroller’s Licensing
Manual titled “Evaluating Charter Applications [f]rom Financial Technology
Companies,” id. at 22–23, 135, regarding which DFS sent an opposition letter, again
contending that the OCC’s plan exceeded its statutory authority under the NBA.
                                          10
depository fintechs. See id. at 167 (“It is the policy of the Office of the Comptroller

of the Currency (OCC) to consider applications for national bank charters from

companies conducting the business of banking, provided they meet the

requirements and standards for obtaining a charter.                 This policy includes

considering applications for special purpose national bank charters from financial

technology (fintech) companies that are engaged in the business of banking but do

not take deposits.” (emphasis added)). DFS further alleges that, following the

Fintech Charter Decision, the OCC “immediately invited . . . Fintech startup

companies to come to [its] office in New York to discuss . . . the new [SPNB]

charter.” Joint App’x at 24. In response to the Fintech Charter Decision, DFS

brought this action in September 2018.

III.   Procedural History

       A.     The Instant Action

       Following the July 2018 Fintech Charter Decision, DFS filed the complaint

against the OCC at issue in this appeal in the Southern District of New York on

September 14, 2018.7 As relevant here, DFS asserted that (1) the Fintech Charter

7 Before filing the instant action (and over a year before the OCC’s Fintech Charter
Decision became final), DFS filed a separate action against the OCC in the United States
District Court for the Southern District of New York in May 2017, asserting, inter alia, that

                                             11
Decision exceeded the OCC’s authority under the NBA because it permits the OCC

to grant SPNB charters to institutions that do not accept deposits and

(2) Section 5.20(e)(1)(i) is null and void for that same reason. 8 Although it was not

clear from the face of the complaint, the district court interpreted these claims as

the OCC lacked the authority under the NBA to issue SPNB charters to non-depository
fintechs and that Section 5.20(e)(1)(i) “is null and void because it exceeds the OCC’s
authority under the NBA.” Vullo v. Off. of the Comptroller of the Currency (Vullo I), No. 17-
cv-3574 (NRB), 2017 WL 6512245, at *4 (S.D.N.Y. Dec. 12, 2017). After the OCC moved to
dismiss the complaint for lack of subject matter jurisdiction, the district court found that,
far from receiving and reviewing SPNB charter applications from non-depository
fintechs (let alone granting such applications), the OCC “ha[d] not yet determined
whether it [would] issue SPNB charters to fintech companies” at all. Id. at *5.
Accordingly, the district court dismissed DFS’s complaint without prejudice on the
grounds that DFS had not suffered an injury in fact sufficient to confer Article III standing
and that the claims against the OCC were not yet constitutionally or prudentially ripe.
See id. at *7–10. With respect to standing, the court determined that DFS’s asserted
injuries, which included, among other things, that New York-chartered institutions
seeking and receiving federal SPNB charters would thereby “escape New York’s
regulatory requirements, stripping their customers of the protections of New York State
law,” “[would] only become sufficiently imminent to confer standing once the OCC
makes a final determination that it will issue SPNB charters to fintech companies.” Id. at
*7. In relation to constitutional ripeness, the court held that, because “constitutional
ripeness is a subset of the injury-in-fact element of Article III standing, our constitutional
ripeness analysis here is coterminous with our standing analysis.” Id. at *8.
8 With respect to DFS’s second claim, the district court clarified that, although the claim
was phrased as a facial challenge of Section 5.20(e)(1)(i) in the complaint, it read that claim
as challenging “only . . . so much of the [r]egulation as purports to authorize [the] OCC
to issue SPNB charters to non-depository institutions.” Joint App’x at 230 n.5.

                                              12
arising under Section 702 of the Administrative Procedure Act (“APA”), 5 U.S.C.

§ 701 et seq. 9

       The OCC subsequently moved to dismiss the complaint for lack of subject

matter jurisdiction and for failure to state a claim upon which relief could be

granted, pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6),

respectively. It first contended that DFS lacks Article III standing to pursue its

claims and that the dispute is not yet constitutionally or prudentially ripe for

adjudication. As to the merits, the OCC argued that the statutory term the

“business of banking” in the NBA is ambiguous and that, therefore, its

interpretation of the term to encompass entities that do not accept deposits—

including non-depository fintechs—pursuant to Section 5.20(e)(1)(i) warrants

Chevron deference.

       The district court denied the OCC’s motion to dismiss as it related to the

justiciability and Chevron issues now on appeal. With respect to standing, the court

noted that “DFS alleges two distinct harms that follow from OCC’s actions,” the

first being that “New York citizens will suffer by losing critical financial

9 In its complaint, DFS also alleged that the Fintech Charter Decision violated the Tenth
Amendment. However, the district court granted the OCC’s motion to dismiss as to that
claim, and DFS does not challenge that decision on appeal.

                                           13
protections that New York banking law and regulatory oversight currently

provides[,]” and more specifically “that the removal of state regulations impacts

[DFS’s] regulation of non-depository money transmitters, of payday lenders and

their usurious trade, as well as of the state’s safety and soundness standards for

non-depository institutions.” Joint App’x at 246–47 (internal quotation marks

omitted). The second alleged harm identified by the district court was that DFS

would “suffer direct economic harm because its operating expenses are funded by

assessments levied by the agency upon New York State licensed institutions and

the Fintech Charter Decision will deprive DFS of the revenues from future

assessments.” Id. at 247 (internal quotation marks omitted). The district court

concluded that DFS has standing to bring its APA claims against the OCC, noting

that “[t]hese alleged threats to New York and DFS implicate the type of sovereign

and direct interests common in cases where states have standing to contest agency

action.” Id. (footnote omitted). Moreover, the district court held that DFS’s claims

are constitutionally ripe for review because DFS had sufficiently alleged that the

OCC’s execution of the Fintech Charter Decision was imminent and that there was

a substantial risk that the OCC could grant an SPNB charter to a non-depository

fintech at any time, thereby injuring DFS.

                                        14
      With respect to DFS’s claims under the APA, the district court concluded

that the term the “business of banking” in the NBA unambiguously requires

federally chartered institutions to accept deposits. In reaching that conclusion, the

district court found that the NBA’s text, statutory framework, and legislative

history, as well as the history of federal banking law and the fact that the OCC

only gave itself charting power over non-depository institutions in 2003, all

counseled in favor of finding that the receipt of deposits is clearly indispensable

to the “business of banking.” Accordingly, the district court determined that it did

not need to reach the second step of the Chevron analysis and denied the OCC’s

motion to dismiss as to DFS’s APA claims.

      Following the district court’s decision and order on the OCC’s motion to

dismiss, the parties agreed that the court had “resolve[d] the substantive legal

issues in this matter[,] . . . render[ing] the entry of final judgment appropriate.” Id.

at 301. Notwithstanding the OCC’s request for vacatur limited to non-depository

fintechs “that have a nexus to New York State,” id. at 293, the district court set

aside Section 5.20(e)(1)(i) “with respect to all fintech applicants seeking a national

bank charter that do not accept deposits,” regardless of their location in the United

                                          15
States, id. at 301 (emphasis added). After the district court entered its amended

judgment, the OCC timely appealed.

      B.     Similar Actions in the District of Columbia

      The Conference of State Bank Supervisors (“CSBS”)—which filed an amicus

brief in connection with this appeal—separately has filed similar lawsuits against

the OCC in the United States District Court for the District of Columbia. In

Conference of State Bank Supervisors v. Office of the Comptroller of the Currency (CSBS

I), CSBS—like DFS—brought a pre-Fintech Charter Decision suit against the OCC,

alleging that it lacked the authority to grant SPNB charters to non-depository

fintechs.   See 313 F. Supp. 3d 285, 291–93 (D.D.C. 2018).         The district court

dismissed the complaint for lack of standing, holding, like the court in Vullo I, that

CSBS had not alleged a sufficient injury in fact given that each of the harms alleged

were “contingent on whether the OCC charters a Fintech,” id. at 295–96, and that

CSBS’s claims were constitutionally unripe for that same reason, id. at 299; see also

id. at 296 (“Several contingent and speculative events must occur before the OCC

charters a Fintech: (1) the OCC must decide to finalize a procedure for handling

those applications; (2) a Fintech company must choose to apply for a charter;

(3) the particular Fintech must substantively satisfy regulatory requirements; and

                                          16
(4) the OCC must decide to grant the charter to the particular Fintech. When the

complaint was filed, not even the first step—finalized procedures—had

occurred.”).

       Again like DFS, CSBS filed another suit against the OCC after it issued its

July 2018 Fintech Charter Decision. See Conf. of State Bank Supervisors v. Off. of the

Comptroller of the Currency (CSBS II), No. 18-cv-2449 (DLF), 2019 WL 4194541, at *1

(D.D.C. Sept. 3, 2019). Unlike DFS, however, CSBS fared no better the second time

around. Specifically, the district court found, for substantially the same reasons

set forth in CSBS I, that CSBS lacked standing and that the dispute was not ripe for

judicial review. See id. at *1–3. 10

                                       DISCUSSION

       On appeal, the OCC contends that the district court erred in denying in part

its motion to dismiss DFS’s complaint. Specifically, it argues that the district court

erred in holding that: (1) DFS has Article III standing to pursue its APA claims and

10 We note that, after briefing for this appeal was completed, CSBS again sued the OCC
in the District of Columbia on December 22, 2020 in connection with the Fintech Charter
Decision. CSBS has now added to its complaint the fact that Figure Technologies Inc.—a
fintech that the OCC allegedly has determined does accept deposits but will not be
required to obtain deposit insurance from the Federal Deposit Insurance Corporation—
applied to the OCC for an SPNB charter. See Complaint at 2, 6, Conf. of State Bank
Supervisors v. Off. of the Comptroller of the Currency (CSBS III), 20-cv-3797 (DLF) (D.D.C.
Dec. 22, 2020), ECF No. 1. The OCC’s motion to dismiss the complaint is pending.
                                            17
that those claims are constitutionally and prudentially ripe for adjudication; (2) the

OCC’s decision to accept SPNB charter applications from non-depository fintechs

is not entitled to Chevron deference because the “business of banking” under the

NBA unambiguously requires the receipt of deposits; and (3) Section 5.20(e)(1)(i)

should be vacated as applied to non-depository fintechs without any geographical

limitation. As discussed below, we find that DFS lacks Article III standing and

that its APA claims are constitutionally unripe because no non-depository fintech

has filed a formal SPNB charter application, nor is it known whether such an

application will be granted if filed. 11 Accordingly, we need not reach the OCC’s

other claims of error.

I.     Standard of Review

       In this case, the OCC brought a “facial”—as opposed to a “fact-based”—

standing challenge under Rule 12(b)(1) because its motion was “based solely on

the allegations of the complaint . . . and exhibits attached to it.” Carter v. HealthPort

11At various points in its appellate briefs, the OCC suggests that DFS’s claims may not
become justiciable even when a non-depository fintech formally applies for an SPNB
charter, but rather that DFS may need to wait to bring its claims until after the OCC grants
such an application. We do not decide the precise point at which DFS’s claims may
become justiciable in the future. Instead, we limit our analysis to the facts currently
before us and conclude that at this juncture, where there is no formal application from a
non-depository fintech for an SPNB charter, DFS does not satisfy the requirements for
Article III standing, nor are its claims constitutionally ripe.
                                            18
Techs., LLC, 822 F.3d 47, 56 (2d Cir. 2016). “[W]e review the district court’s decision

on such a facial challenge de novo.” Id.; accord Sonterra Cap. Master Fund Ltd. v. UBS

AG, 954 F.3d 529, 533 (2d Cir. 2020). In doing so, we “accept[] as true all material

factual allegations of the complaint, and draw[] all reasonable inferences in favor

of the plaintiff.” Sonterra Cap. Master Fund Ltd., 954 F.3d at 533 (internal quotation

marks omitted). Additionally, “the plaintiff has no evidentiary burden” when

confronted with a facial standing challenge. Carter, 822 F.3d at 56.

      As with its standing determination, a district court’s conclusion as to

ripeness “is also a legal determination subject to de novo review.” Connecticut v.

Duncan, 612 F.3d 107, 112 (2d Cir. 2010); accord Murphy v. New Milford Zoning

Comm’n, 402 F.3d 342, 347 (2d Cir. 2005).

II.   Article III Standing

      At the threshold, the OCC argues that DFS cannot establish Article III

standing because it has not alleged that it suffered, or will suffer imminently, an

injury in fact as a result of the OCC’s Fintech Charter Decision.

      Under Article III of the U.S. Constitution, “[t]he judicial Power of the United

States” extends only to certain “Cases” and “Controversies.” U.S. Const. art. III,

§§ 1–2; see also Raines v. Byrd, 521 U.S. 811, 818 (1997) (“No principle is more

                                          19
fundamental to the judiciary’s proper role in our system of government than the

constitutional limitation of federal-court jurisdiction to actual cases or

controversies.” (internal quotation marks omitted)). To satisfy the Constitution’s

“case-or-controversy requirement,” a plaintiff in federal court “must establish that

they have standing to sue.” Clapper v. Amnesty Int’l USA, 568 U.S. 398, 408 (2013)

(quoting Raines, 521 U.S. at 818). “The law of Article III standing, which is built on

separation-of-powers principles, serves to prevent the judicial process from being

used to usurp the powers of the political branches.” Id.

      The requirements of Article III standing are well established: “[A] plaintiff

must have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged

conduct of the defendant, and (3) that is likely to be redressed by a favorable

judicial decision.” Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547 (2016). DFS, “as the

party invoking federal jurisdiction, bears the burden of establishing these

elements.” Id. (“Where, as here, a case is at the pleading stage, the plaintiff must

‘clearly . . . allege facts demonstrating’ each element.” (quoting Warth v. Seldin, 422

U.S. 490, 518 (1975)). Because DFS fails to establish “the ‘[f]irst and foremost’ of

standing’s three elements”—injury in fact, id. (alteration in original) (quoting Steel

                                          20
Co. v. Citizens for a Better Env’t, 523 U.S. 83, 103 (1998))—we need not address

traceability or redressability.

      “[T]he injury-in-fact requirement[] . . . helps to ensure that the plaintiff has

a personal stake in the outcome of the controversy.” Susan B. Anthony List v.

Driehaus, 573 U.S. 149, 158 (2014) (internal quotation marks omitted). For purposes

of Article III standing, an “injury in fact” is “an invasion of a legally protected

interest which is (a) concrete and particularized[] and (b) actual or imminent, not

conjectural or hypothetical.” Lujan v. Defs. of Wildlife, 504 U.S. 555, 560 (1992)

(footnote, citations, and internal quotation marks omitted); accord Clapper, 568 U.S.

at 409; Sonterra Cap. Master Fund Ltd., 954 F.3d at 534. “An allegation of future

injury may suffice if the threatened injury is ‘certainly impending,’ or there is a

‘“substantial risk” that the harm will occur.’” Driehaus, 573 U.S. at 158 (quoting

Clapper, 568 U.S. at 414 & n.5); accord Chevron Corp. v. Donziger, 833 F.3d 74, 121 (2d

Cir. 2016); see also Clapper, 568 U.S. at 410 (finding an “objectively reasonable

likelihood” of future harm to be an improper standard for showing a “threatened

injury [is] certainly impending” (internal quotation marks omitted)). Importantly,

however, “allegations of possible future injury are not sufficient.” Clapper, 568 U.S.

at 409 (alteration and internal quotation marks omitted) (“Although imminence is

                                          21
concededly a somewhat elastic concept, it cannot be stretched beyond its purpose,

which is to ensure that the alleged injury is not too speculative for Article III

purposes . . . .” (internal quotation marks omitted)).

      DFS alleges that it will suffer two classes of injuries as a result of the OCC’s

actions.   First, it asserts that the Fintech Charter Decision will lead to the

preemption of state law and thereby reduce DFS’s regulatory power, to the

detriment of New York consumers. Second, it argues that it faces the prospect of

losing revenue from assessments it currently levies against non-depository

fintechs, which may opt to convert to a federal SPNB charter. 12 Each of these

alleged injuries is discussed below in turn.

      A.     Preemption and Regulatory Disruption

      In asserting that it has standing, DFS does not argue that it has already

suffered any sort of injury as a result of the OCC’s actions. Instead, it contends

that there is a substantial risk that the Fintech Charter Decision will enable non-

depository fintechs with SPNB charters that would otherwise be subject to its

regulatory jurisdiction to escape enforcement by claiming federal preemption.

DFS’s logic is as follows: Under the dual banking system, states have heretofore

12 Under federal law, state-chartered institutions may convert into national banks,
provided that they meet certain requirements. See 12 U.S.C. § 35.
                                         22
regulated non-depository institutions. Thus, if any New York-chartered, non-

depository fintech converts to—or any new non-depository fintech seeking to do

business in New York applies for—an SPNB charter pursuant to the Fintech

Charter Decision, it will, in DFS’s view, claim federal preemption in response to

any DFS-initiated regulatory action.

      DFS further alleges that this alleged preemption, will, inter alia, “weaken[]

regulatory controls on usury, payday loans, and other predatory lending

practices” and thereby harm New York, as well as the consumers and businesses

that reside there. Joint App’x at 11. In particular, DFS contends that non-

depository fintechs with federal SPNB charters will “escape” New York’s

“bonding requirements, liquidity and capitalization standards, and [certain]

payment obligations” meant “to protect consumers against loss in the event that

such an institution fails.” Id. at 25. Relatedly, DFS asserts that “the Fintech Charter

Decision effectively negates New York’s strict interest-rate caps and anti-usury

laws” because, under federal law, national banks are subject to the interest-rate

laws of the jurisdiction in which they are “located.” Id. at 26 (quoting 12 U.S.C.

§ 85). Thus, according to DFS, “under the Fintech Charter [D]ecision, marketplace

lenders that use the Internet can now gouge New York borrowers by receiving an

                                          23
OCC special purpose charter and locating in any number of other states that

authorize interest rates considered usurious in New York.” Id.

       The district court determined that the alleged threat of federal preemption

and subsequent regulatory harm was sufficient to confer Article III standing

because New York’s “comprehensive regulatory system for non-depository

fintech companies” is “allegedly threatened by” the OCC’s Fintech Charter

Decision. Id. at 247 (“These alleged threats to New York and DFS implicate the

type of sovereign and direct interests common in cases where states have standing

to contest agency action.” (footnote omitted)). We disagree. 13

13 Although not relied upon by DFS on appeal, the district court also determined that
DFS’s APA claims “fall within the parens patriae framework of standing.” Joint App’x at
248. Parens patriae standing allows a state (in its capacity as a sovereign) to bring suit on
behalf of its citizens when it “allege[s] injury to a sufficiently substantial segment of its
population,” “articulate[s] an interest apart from the interests of particular private
parties,” and “express[es] a quasi-sovereign interest.” Alfred L. Snapp & Son, Inc. v. Puerto
Rico ex rel. Barez, 458 U.S. 592, 607 (1982). The ability of a state to sue the federal
government under this doctrine of standing is subject to continuing judicial debate. See
Connecticut v. U.S. Dep’t of Com., 204 F.3d 413, 414 n.2 (2d Cir. 2000) (declining to address
the issue); see also Ariz. State Legislature v. Ariz. Indep. Redistricting Comm’n, 576 U.S. 787,
802 n.10 (2015) (noting that the cases relating to “standing of states to sue the federal
government[,]” including those addressing parens patriae standing, “are hard to
reconcile” (internal quotation marks omitted)). However, we need not delve into this
complex threshold question because, even assuming parens patriae standing could apply
here, New York residents (like the state itself) lack a concrete or imminent harm
stemming from the OCC’s Fintech Charter Decision and that same lack of harm at this
juncture prevents DFS from relying on this doctrine to establish parens patriae standing
under Snapp. See, e.g., Table Bluff Rsrv. (Wiyot Tribe) v. Philip Morris, Inc., 256 F.3d 879, 885

                                               24
        As an initial matter, insofar as DFS is relying on the “substantial risk” test

for Article III standing articulated in Driehaus and Clapper, we find DFS’s asserted

risk of regulatory injury to be too speculative to meet the requirements of Article

III.   At this time, no non-depository fintech has applied for—let alone been

granted—an SPNB charter, and, as DFS concedes, no state law or regulation has

been preempted as a result of the Fintech Charter Decision.                  Thus, there is

currently no non-depository fintech that can claim federal preemption engaging

in any practice that may give rise to the regulatory harms that DFS alleges, such

as charging interest rates that exceed New York’s statutory cap. Moreover, the

Fintech Charter Decision merely indicates that the OCC intends to begin accepting

SPNB charter applications from non-depository fintechs; it is not a guarantee that

those applications will be granted. As was the case before the Fintech Charter

Decision was made final, “[a]ny allegation of preemption at this point relies on

speculation about the OCC’s future actions.” Vullo I, 2017 WL 6512245, at *8; see

also CSBS I, 313 F. Supp. 3d at 298 (“[No] state law has been preempted by the

(9th Cir. 2001) (holding that “[the sovereign] still must allege injury in fact to the citizens
they purport to represent as parens patriae”); accord Utah Div. of Consumer Prot. v. Stevens,
398 F. Supp. 3d 1139, 1145 (D. Utah 2019) (“[A]s a matter of logic, it is clear enough that
the mere assertion of a state interest, untethered from injury to the State’s citizens, cannot
support parens patriae standing—even if that interest might qualify as a quasi-sovereign
interest if accompanied by such injury.”).

                                              25
OCC’s preliminary activities respecting Fintech charters.”). In short, before any

non-depository fintech that engages in the types of business practices about which

DFS is concerned applies for or receives an SPNB charter, there will be no requisite

“imminent” injury to DFS. 14 Lujan, 504 U.S. 560; accord Clapper, 568 U.S. at 406,

409–14 (finding plaintiffs—a group that included “attorneys and human rights,

labor, legal, and media organizations”—failed to establish Article III standing to

challenge a statute permitting the foreign surveillance of individuals other than

“United     States   persons”     where     plaintiffs    contended      that   their   own

communications could be intercepted by the U.S. government under the statute

based upon “a highly attenuated chain of possibilities”). For the same reasons,

there is not, at this time, a sufficiently “substantial risk” that such injury will occur.

Driehaus, 573 U.S. at 158 (quoting Clapper, 568 U.S. at 414 n.5).

14 In its brief on appeal, DFS argued that it “will be forced to incur regulatory costs before
any issuance of a charter” because it will need “to complete enforcement actions before a
fintech company can seek immunity from OCC, and to monitor fintechs nationwide for
potential incursion into the New York marketplace.” DFS Br. at 28. As a threshold
matter, DFS failed to raise this issue below. See Spinelli v. Nat’l Football League, 903 F.3d
185, 198 (2d Cir. 2018) (“The well-established general rule is that an appellate court will
not consider an issue raised for the first time on appeal.” (alteration and internal
quotation marks omitted)). But even if it were properly raised, we note that counsel for
DFS conceded at oral argument that DFS still has yet to incur these costs, despite alleging
that the OCC had already begun processing draft applications when the district court
judgment was entered, thus demonstrating that these costs—like the other costs DFS
alleges it will incur—are too speculative at this stage to support standing.
                                             26
      Moreover, even if the OCC grants an SPNB charter to some non-depository

fintech, it is not entirely clear that the regulatory disruption that DFS fears will

actually occur. Indeed, DFS’s purported standing on the basis of preemption and

regulatory injury is undermined by its own complaint, which repeatedly couches

this alleged injury in conditional or future-oriented terms. For example, DFS

alleges that: “federal preemption claims will surely proliferate among fintech

charter-holders in response to New York misconduct charges,” Joint App’x at 25

(emphasis added); “New York-licensed money transmitters . . . could qualify for an

[SPNB] charter and thereby escape New York’s regulatory requirements,” id.

(emphasis added); and the Fintech Charter Decision “could realistically lead in New

York to the proliferation of prohibited payday lending by out-of-state OCC

chartered entities,” id. at 26 (emphasis added). DFS also undercuts its own claimed

standing, admitting that “the full scope of regulatory disruption is difficult to

ascertain” because the class of fintechs to which the OCC will ultimately grant

SPNB charters is uncertain. Id. at 25.

      Although no non-depository fintech has filed a formal application for an

SPNB charter, DFS urges us to assume that the OCC will grant one imminently.

In its brief on appeal, for instance, DFS points to evidence that the OCC has

                                         27
actively solicited SPNB charter applications from non-depository fintechs and that

a former Comptroller of the Currency suggested that there were multiple entities

“going through the [SPNB charter] application process” prior to the district court’s

decision in this case denying in part the OCC’s motion to dismiss. DFS Br. at 19–

20 (internal quotation marks omitted). In DFS’s view, these developments suggest

that its alleged regulatory injuries are sufficiently imminent.             We disagree,

however, because the mere act of welcoming SPNB charter applications from non-

depository fintechs does little to show that the OCC is on the verge of granting

those applications imminently or at all (or even that one will necessarily be filed).

Consequently, DFS’s concern about preemption and its regulatory fallout is too

speculative. 15

15  Although the district court noted that “DFS benefits from the supposition that the
government enforces and acts on its recent, non-moribund laws,” Joint App’x at 249
(citing Hedges v. Obama, 724 F.3d 170, 197 (2d Cir. 2013)), that supposition does not alter
the standing analysis here. In Hedges, this Court assessed, inter alia, whether certain non-
citizens had Article III standing to challenge a provision of the National Defense
Authorization Act purporting to authorize the U.S. President to detain any person
associated with certain terrorist activities. 724 F.3d at 182, 193–94. In that context, we
stated that plaintiffs seemed to face a more “forgiving” standing inquiry before the
Supreme Court when bringing a pre-enforcement challenge of a statute proscribing
certain conduct, in part, because of the Court’s apparent “willing[ness] to presume that
the government will enforce the law as long as the relevant statute is recent and not
moribund.” Id. at 197 (internal quotation marks omitted). This presumption is of no
moment here, however, because the Fintech Charter Decision proscribes nothing and it
does not even apply directly to DFS. See Lujan, 504 U.S. at 562 (“[W]hen the plaintiff is

                                            28
       Furthermore, at oral argument, DFS asserted that, in light of certain

statements by former Comptrollers of the Currency to the effect that applications

for SPNB charters were in process, the OCC must have been in preliminary

discussions with—and received draft SPNB charter applications from—non-

depository fintechs, such that any ultimate grant of such a charter would occur

very soon after a formal application is filed. To be sure, the OCC’s Licensing

Manual Supplement includes a “prefiling phase,” during which a fintech that

considers applying for an SPNB charter can engage with OCC staff regarding the

application process, discuss any potential issues concerning the business plan at

issue, and, if necessary, submit a draft application. Joint App’x at 176–77. But

contrary to DFS’s view, the possibility that some unidentified non-depository

fintechs were in initial discussions with the OCC about applying for an SPNB

charter prior to the district court’s decision in this case, or that those fintechs had

submitted draft applications for such a charter, does not render the granting of an

SPNB charter to a non-depository fintech, much less DFS’s asserted preemption-

related injuries, actual or imminent; rather, it only makes those events somewhat

not [it]self the object of the government action or inaction [it] challenges, standing is not
precluded, but it is ordinarily substantially more difficult to establish.” (internal
quotation marks omitted)).
                                             29
more “possible.” Clapper, 568 U.S. at 409 (noting that “allegations of possible future

injury are not sufficient” to establish Article III standing (alteration and internal

quotation marks omitted)). 16 Indeed, the Licensing Manual Supplement itself

provides that “[f]iling a draft application does not guarantee that the OCC will

approve a formal application,” Joint App’x at 177 n.11, and DFS ignores the fact

that applicants are, by regulation, required to publish notice of formal SPNB

charter applications and that the OCC must then provide a thirty-day public

comment period, see id. at 178 & nn.12–13.

      The district court and DFS stress that DFS, as a state-agency plaintiff, is

owed “special solicitude” when assessing Article III standing. Massachusetts v.

EPA, 549 U.S. 497, 520 (2007). In finding that DFS lacks standing, however, we do

not cast doubt on this principle because it does not absolve a state or state-agency

16 We are also unmoved by developments that have occurred since the briefs in this
appeal were filed. In its Federal Rule of Appellate Procedure 28(j) letter dated September
4, 2020, DFS informed the court that Politico had reported that the then-Acting
Comptroller of the Currency had indicated in an interview that the OCC “[would] be
ready as soon as [September 1, 2020] to start processing applications for charters from
payments companies.” DFS Rule 28(j) Letter at 1 (Sept. 4, 2020), ECF. No. 103. DFS
contends that the reported statement demonstrates that it is in no way “speculative” that
the OCC “will exercise [its challenged] chartering authority.” Id. at 2. Even if we were
to agree that this statement constituted evidence that the OCC is now more eager to
accept SPNB charter applications, it does not establish that non-depository fintechs are
any more likely to now submit such applications or have such applications granted
imminently.

                                           30
plaintiff from the constitutional requirement that it establish a sufficiently

“concrete, particularized, and . . . imminent” injury in fact. Clapper, 568 U.S. at 409

(internal quotation marks omitted); see Del. Dep’t of Nat. Res. & Env’t Control v. Fed.

Energy Regul. Comm’n, 558 F.3d 575, 579 n.6 (D.C. Cir. 2009) (“This special

solicitude does not eliminate the state petitioner’s obligation to establish a concrete

injury, as [Massachusetts v. EPA] amply indicates.”). Additionally, we note that the

considerations in Massachusetts v. EPA were quite different from those presented

in this case. In particular, there, Massachusetts had experienced an actual injury

in fact—namely, “rising seas ha[d] already begun to swallow Massachusetts’

coastal land,” Massachusetts v. EPA, 549 U.S. at 522, whereas here, DFS has not

suffered any actual injury, and the future injuries it fears will only occur if, at least,

an application for an SPNB charter is filed by a non-depository fintech and the

OCC decides to grant that application.

      Furthermore, we find the cases upon which DFS relies for the proposition

that “[a]gency action that expands the preemptive scope of an existing federal

statute causes a cognizable injury to [s]tates,” DFS Br. at 31, to be factually

inapposite to the circumstances here because the preemptive effect of the new

federal law, regulation, or policy at issue in those cases was direct and immediate.

                                           31
For instance, Wyoming ex rel. Crank v. United States involved a federal law

prohibiting individuals convicted of misdemeanor domestic violence crimes from

owning firearms. 539 F.3d 1236, 1239 (10th Cir. 2008). In response to this law,

Wyoming passed its own statute establishing a process for the expungement of

certain domestic violence crimes for the purpose of restoring firearm ownership

rights.   Id. at 1239–40.    The state brought suit in federal court after federal

authorities informed state officials that the new state law did not align with federal

law and that anyone possessing a gun pursuant to the expungement law could

still face federal prosecution. See id. at 1240–41. With respect to Article III

standing, the Tenth Circuit concluded that Wyoming had sufficiently alleged

injury in fact because federal authorities expressly found that Wyoming law was

preempted, and thereby infringed upon the state’s sovereign interest in enforcing

its own laws. Id. at 1242.

      The situation before us is altogether different from Wyoming ex rel. Crank.

As noted above, no New York law or regulation has been preempted because the

OCC has not received an SPNB charter application from, or granted an SPNB

charter to, any non-depository fintech and, in addition, it is unclear at this juncture

                                          32
whether New York law will ever be preempted in the ways DFS fears. 17 Simply

put, the Fintech Charter Decision has not implicated the sorts of direct preemption

concerns that animated DFS’s cited cases, and it will not do so until the OCC

receives an SPNB charter application from or grants such a charter to a non-

depository fintech that would otherwise be subject to DFS’s jurisdiction.

       B.     Loss of Assessment Revenue

       We are also unpersuaded that DFS faces a substantial risk of suffering its

second alleged future injury—that it will lose revenue acquired through annual

assessments. In its complaint, DFS alleges that it is funded through assessments

levied upon institutions it regulates pursuant to N.Y. Fin. Serv. Law § 206(a). DFS

further asserts that, in light of this assessment regime, the Fintech Charter Decision

will cause it injury in “a directly quantifiable way” because “[e]very non-

depository financial firm that receives an [SPNB] charter in place of a New York

17 The remaining preemption-based standing cases that DFS cites are unavailing for this
same reason. See Alaska v. U.S. Dep't of Transp., 868 F.2d 441, 442–43 (D.C. Cir. 1989)
(concluding that states had suffered sufficient injury in fact to confer Article III standing
because federal officials expressly took the position that federal regulations preempted
state consumer protection laws concerning “airline price advertising,” which encroached
upon the states’ sovereign interest in enforcing their own laws); Ohio ex rel. Celebrezze v.
U.S. Dep’t of Transp., 766 F.2d 228, 229–30, 232–33 (6th Cir. 1985) (finding same where a
federal “statement of policy” expressly provided that federal regulations preempted state
laws requiring prenotification of the transportation of certain radioactive materials
within state lines).
                                             33
license to operate in the state deprives DFS of crucial resources that are necessary

to fund the agency’s regulatory function.” Joint App’x at 27–28.

      As with its asserted preemption-related injuries, DFS has not alleged that it

lost any assessments as a result of the Fintech Charter Decision, nor has it shown

that such a financial loss is sufficiently imminent. At least until a non-depository

fintech that DFS currently regulates—or would otherwise regulate—decides to

apply for an SPNB charter, this alleged assessment loss will remain purely

“conjectural or hypothetical,” rather than “imminent” as the Constitution requires.

Lujan, 504 U.S. at 560 (internal quotation marks omitted).

      In addition, the cases DFS relies upon to support its loss-of-revenue

argument are distinguishable either because the new law or agency decision at

issue had already led to pecuniary injury at the time of the lawsuit, or because

such injury was inevitable. 18 For example, in Wyoming v. Oklahoma, Wyoming

brought suit against Oklahoma under the Commerce Clause of the U.S.

Constitution, challenging an Oklahoma law requiring utility companies to

purchase a certain amount of coal from in-state sources rather than sources in

18For purposes of this discussion, we assume, without deciding, that the cited decisions
of other courts of appeals, which are not binding on this Court in any event, were
correctly decided.
                                          34
Wyoming. See 502 U.S. 437, 440–41, 443 (1992). The Supreme Court concluded

that Wyoming had been sufficiently injured for purposes of Article III standing

because the Oklahoma law had already led to decreased coal sales, which, in turn,

had decreased Wyoming’s tax revenues. Id. at 447–48; see also Air Alliance Hous. v.

EPA, 906 F.3d 1049, 1056–57, 1059–60 (D.C. Cir. 2018) (per curiam) (finding that

states had standing to challenge regulations delaying a final Environment

Protection Agency rule concerning chemical disasters in light of prior, as well as

anticipated, expenditures the states had made to prevent such disasters while the

final rule was delayed).

      Additionally, in Texas v. United States, multiple states brought a challenge

under the APA against a decision by the Department of Homeland Security to

defer enforcement of the immigration laws against the parents of U.S. citizens and

Lawful Permanent Residents. 787 F.3d 733, 743–44 (5th Cir. 2015), affirmed by an

equally divided court, 136 S. Ct. 2271 (2016) (per curiam). The Fifth Circuit agreed

with the district court that Texas had sufficiently demonstrated that it had Article

III standing because the program, which would have gone into effect but for the

preliminary injunction entered by the district court, see id. at 745–46, would require

the state to incur the cost of issuing driver’s licenses to program beneficiaries, id.

                                         35
at 748; see also id. at 749 (“Texas’s forced choice between incurring costs and

changing its laws is an injury because those laws exist for the administration of a

state program, not to challenge federal law, and Texas did not enact them merely

to create standing.”); New York v. U.S. Dep’t of Homeland Sec., 969 F.3d 42, 50, 59–60

(2d Cir. 2020) (finding that states had established standing to challenge an agency

rule “setting out a new . . . interpretation of a . . . provision of [U.S.] immigration

law that renders inadmissible to the United States any non-citizen who is likely to

become a ‘public charge’” where the states alleged “they [were] injured because

the [r]ule [would] cause many of their residents to forgo use of public benefits

programs, thereby decreasing federal transfer payments to the states, reducing

Medicaid revenue, increasing overall healthcare costs, and causing general

economic harm” and the agency itself had anticipated a decrease in public benefits

enrollment).

      Plainly, the instant case presents an entirely different situation. It is clear

that, contrary to its cited cases, see Wyoming v. Oklahoma, 502 U.S. at 447–48 (finding

that the state-plaintiff had already suffered a financial loss); Air Alliance Hous., 906

F.3d at 1059–60 (same), DFS has yet to lose out on any revenue acquired through

its assessments as a result of the Fintech Charter Decision because the OCC has

                                          36
not received, let alone approved, an application for an SPNB charter from a non-

depository fintech within DFS’s jurisdiction. Moreover, unlike Texas v. United

States, where the challenged immigration program would have certainly gone into

effect absent the states-plaintiffs’ APA challenge and thereby forced Texas to incur

the costs of issuing driver’s licenses, 787 F.3d at 745–46, the OCC may never grant

an SPNB charter to a non-depository fintech currently subject to DFS assessments

and, in fact, has yet to even receive a formal application.

       In short, DFS asks this Court to determine—in the absence of an actual or

imminent harm, or a sufficiently “substantial risk” of harm—whether the NBA

unambiguously requires that fintechs accept deposits in order to be eligible for an

SPNB charter. The standing requirement under Article III of the U.S. Constitution

forecloses consideration of such a request at this time. Accordingly, because DFS

failed to adequately allege that it has Article III standing to bring its APA claims

against the OCC, those claims must be dismissed without prejudice.

III.   Constitutional & Prudential Ripeness

       The OCC also separately asserts that DFS’s APA claims are neither

constitutionally nor prudentially ripe for judicial review because the OCC has

merely announced that it would begin accepting applications for SPNB charters

                                         37
from non-depository fintechs, and has not received, or granted, such an

application.     We hold, in the alternative, that constitutional ripeness

considerations require dismissal of this case for lack of subject matter jurisdiction.

Because we hold that constitutional considerations mandate dismissal, we need

not reach the OCC’s argument that DFS’s claims are prudentially unripe.

      In the administrative context, the ripeness doctrine “prevent[s] the courts,

through avoidance of premature adjudication, from entangling themselves in

abstract disagreements over administrative policies, and also . . . protect[s] the

agencies from judicial interference until an administrative decision has been

formalized and its effects felt in a concrete way by the challenging parties.” Nat’l

Park Hosp. Ass’n v. Dep’t of Interior, 538 U.S. 803, 807–08 (2003) (quoting Abbott

Laboratories v. Gardner, 387 U.S. 136, 148–49 (1967), abrogated on other grounds by

Califano v. Sanders, 430 U.S. 99 (1977)). “‘Ripeness’ is a term that has been used to

describe two overlapping threshold criteria for the exercise of a federal court’s

jurisdiction.” Simmonds v. INS, 326 F.3d 351, 356–57 (2d Cir. 2003). In particular,

this doctrine is “drawn both from Article III limitations on judicial power and from

prudential reasons for refusing to exercise jurisdiction.” Nat’l Park Hosp. Ass’n, 538

U.S. at 808 (quoting Reno v. Cath. Soc. Servs., Inc., 509 U.S. 43, 57 n.18 (1993)). Thus,

                                           38
we refer to the former aspect of the doctrine as “constitutional ripeness” and the

latter aspect as “prudential ripeness.” See, e.g., In re Methyl Tertiary Butyl Ether

(MTBE) Prods. Liab. Litig., 725 F.3d 65, 109–10 (2d Cir. 2013); Simmonds, 326 F.3d at

357 (“These two forms of ripeness are not coextensive in purpose.”).

      “Constitutional ripeness is a doctrine that, like standing, is a limitation on

the power of the judiciary” in that it “prevents courts from declaring the meaning

of the law in a vacuum and from constructing generalized legal rules unless the

resolution of an actual dispute requires it.” Simmonds, 326 F.3d at 357; accord In re

MTBE Prods. Liab. Litig., 725 F.3d at 110 (“The doctrine of constitutional ripeness

prevents a federal court from entangling itself in abstract disagreements over

matters that are premature for review because the injury is merely speculative and

may never occur.” (internal quotation marks omitted)); MPM Silicones, LLC v.

Union Carbide Corp., 966 F.3d 200, 232 (2d Cir. 2020). Crucially, the doctrine of

constitutional ripeness “overlaps with the standing doctrine, ‘most notably in the

shared requirement that the plaintiff’s injury be imminent rather than conjectural

or hypothetical.’” In re MTBE Prods. Liab. Litig., 725 F.3d at 110 (quoting Ross v.

Bank of Am., N.A., 524 F.3d 217, 226 (2d Cir. 2008)); accord Nat’l Org. for Marriage,

Inc. v. Walsh, 714 F.3d 682, 688 (2d Cir. 2013) (“Often, the best way to think of

                                         39
constitutional ripeness is as a specific application of the actual injury aspect of

Article III standing.”); see also MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 128

n.8 (2007) (explaining that “standing and ripeness boil down to the same question”

in cases where “the party seeking declaratory relief is himself preventing the

complained-of injury from occurring”); Brooklyn Legal Servs. Corp. v. Legal Servs.

Corp., 462 F.3d 219, 225 (2d Cir. 2006) (“Because [defendant’s] ripeness arguments

concern only [the] shared requirement” that “the [alleged] injury be imminent

rather than conjectural or hypothetical, . . . it follows that our analysis of

[defendant’s] standing challenge applies equally and interchangeably to its

ripeness challenge.”), abrogated on other grounds by Bond v. United States, 564 U.S.

211 (2011). 19

       Accordingly, for substantially the same reasons set forth above with respect

to Article III standing, we hold that DFS’s APA claims are not constitutionally ripe.

19To be sure, the doctrines of standing and ripeness serve separate and distinct purposes.
See Bronx Household of Faith v. Bd. of Educ. of the City of N.Y., 492 F.3d 89, 111 (2d Cir. 2007)
(Leval, J., concurring) (“Standing, in its fundamental aspect, focuses on the party seeking
to get his complaint before a federal court and whether that party suffers a sufficiently
direct and concrete injury to be heard in complaint. By contrast, the fundamental concern
of ripeness is whether at the time of the litigation the issues in the case are fit for judicial
decision.” (citation and internal quotation marks omitted)). We simply reemphasize that,
where, as here, the justiciability inquiry focuses on whether an alleged injury is
“imminent rather than conjectural or hypothetical,” the two doctrines “overlap[].” In re
MTBE Prods. Liab. Litig., 725 F.3d at 110.
                                               40
In particular, we reiterate that, even if non-depository fintechs have engaged in

preliminary discussions with the OCC regarding (or submitted draft applications

for) SPNB charters, DFS is still asking us to “entangl[e] [ourselves] in abstract

disagreements over matters that are premature for review because the injury is

merely speculative and may never occur.” In re MTBE Prods. Liab. Litig., 725 F.3d

at 110 (internal quotation marks omitted).

IV.   Merits

      Having determined that DFS lacks Article III standing, and that its claims

are not constitutionally ripe, we lack jurisdiction to decide the remaining issues on

appeal. Specifically, we do not address the district court’s holding, on the merits,

that the “business of banking” under the NBA unambiguously requires the receipt

of deposits, nor whether that holding warrants setting aside Section 5.20(e)(1)(i)

nationwide with respect to non-depository fintechs applying for SPNB charters.

In reversing the amended judgment, we express no view on the district court’s

determinations regarding these issues.

                                         41
                               CONCLUSION

      For the reasons set forth above, we REVERSE the amended judgment and

REMAND to the district court with instructions to enter a judgment of dismissal

without prejudice.

                                      42
19-4271
Lacewell v. Office of the Comptroller of the Currency

                                               Appendix A
                                     Filings by Amici Curiae 1

BRIEF OF PROFESSOR DAVID ZARING AS AMICUS CURIAE IN SUPPORT OF APPELLANTS
(Jeffrey S. Bucholtz, J.C. Boggs, Amy R. Upshaw (King & Spalding LLP,
Washington, DC), David Zaring (University of Pennsylvania, Philadelphia, PA)).

BRIEF OF THIRTY-THREE BANKING LAW SCHOLARS AS AMICI CURIAE IN SUPPORT OF
APPELLEE (Daniel R. Walfish (Walfish & Fissell PLLC, New York, NY)).

BRIEF OF AMICUS CURIAE CONFERENCE OF STATE BANK SUPERVISORS IN SUPPORT OF
APPELLEE AND AFFIRMANCE (Michael Townsley (Conference of State Bank
Supervisors, Washington, DC), Jennifer Ancona Semko, Graham R. Cronogue
(Baker McKenzie, Washington, DC)).

BRIEF OF NATIONAL ASSOCIATION OF CONSUMER CREDIT ADMINISTRATORS AND
AMERICAN CONFERENCE OF UNIFORM CONSUMER CREDIT CODE STATES AS AMICI
CURIAE IN SUPPORT OF APPELLEE (Zachary D.A. Hingst (Iowa Division of Banking,
Des Moines, IA)).

AMICUS CURIAE BRIEF OF THE CENTER FOR RESPONSIBLE LENDING, NATIONAL
CONSUMER LAW CENTER AND NATIONAL COMMUNITY REINVESTMENT COALITION IN
SUPPORT OF APPELLEE (Stuart Rossman (National Consumer Law Center, Boston,
MA), Bradley H. Blower (National Community Reinvestment Coalition,
Washington, DC), Lauren Saunders (National Consumer Law Center,
Washington, DC), William R. Corbett, Yvette Garcia Missri (Center for
Responsible Lending, Durham, NC)).

BRIEF FOR INDEPENDENT COMMUNITY BANKERS OF AMERICA AS AMICUS CURIAE IN
SUPPORT OF APPELLEE (Keith Bradley, Darin Smith (Squire Patton Boggs (US) LLP,
Denver, CO)).

1   None of the Amici Curiae listed herein participated in oral argument.