When the Office of the Comptroller of the Currency (OCC) said last year that it would seek to offer a special-purpose charter so fintechs could get banking licenses more quickly, it caused a lot of hubbub in the industry. 

Giving fintechs the option of getting a national bank charter was criticized by some, but others praised the idea and said it could bring about an increase in “challenger banks,” such as those that have become very popular in Europe and the U.K. in recent years.

The plan was dealt a blow this month when a judge in a federal district court of New York ruled that the OCC did not have the authority to grant such a charter. The OCC plans to appeal the decision, but for now, it dampens the enthusiasm of not only fintechs looking for a streamlined path to a national bank charter, but the VC community as well. The OCC plan likely would have enticed VCs to invest (even more) in fintechs that were on the path to acquiring a national charter. For now, the OCC fintech charter is in a holding pattern.