Judge Naomi Reice Buchwald of the US District Court for the Southern District of New York threw out the suit as premature because the OCC has not actually decided whether to issue the fintech charters and has not received any applications.

Last December the OCC said that it planned to begin accepting applications from fintech companies to become special-purpose national banks. The move came after sustained lobbying from many in the fintech community because it will enable them to operate across state lines without having to deal with multiple jurisdictions.

But the plans drew the ire of state regulators, most notably the NYDFS, whose chief, Maria Vullo, says the OCC "should not use technological advances as an excuse to attempt to usurp state laws that already regulate fintech activities".

In May, Vullo sued the OCC arguing that the fintech charter plan exceeds the federal watchdog's authority and violates the 10th Amendment to the US Constitution.

While the court decided the suit was premature, it did not reach a decision on whether the OCC lacks the authority to issue charters, with Buchwald suggesting that "it would be sensible for the OCC to provide DFS with notice as soon as it reaches a final decision given DFS’s stated intention to pursue these issues and in consideration of potential applicants whose interests would be served by the timely resolution of any legal challenges."

In a statement, Vullo says: "[W]e hope that the OCC will abandon its pursuit of the chartering of nondepository institutions."

The OCC still faces a complaint from the Conference of State Bank Supervisors (CSBS) in the US district court of Columbia which alleges that the OCC is over-reaching its authority in granting charter status to non-banks.