It was a big day for fintech, pundits said on July 31, the day the Treasury Department released its fintech report, in which it endorsed the idea of a “fintech charter,” and the OCC announced it was (re)opening its application for fintech charters.

A chorus of voices rose up from the banking world condemning the charters as a bad idea, but perhaps they needn’t have bothered.

The OCC received no applications the first time around, and it has received none in the first few weeks of the new one, either. Well, it is August. But more to the point, the industry expects a legal battle from state authorities.

The New York Department of Financial Services (NYDFS) and the Conference of State Bank Supervisors (CSBS) challenged the OCC in a pair of 2017 lawsuits, when the OCC was considering fintech charters. Those suits were dismissed as premature but both parties could now reprise them and have told Reuters they are considering their options.

The OCC said it has the legal authority to issue such charters.

“I would expect that challenge to pick up where it left off,” said Keith Noreika, a partner at the law firm Simpson Thacher who led the OCC for part of the initial legal bout.

A legal battle would not prevent companies from applying but could discourage many from doing so until the matter is settled.

“It could percolate all the way to the Supreme Court,” said Noreika, who added the OCC is primed for a fight.

One point of contention is stress testing — will fintech charter grantees be held to this onerous requirement that banks face?

“We are certainly open to exploring this [charter], but … there are a lot of details still to come,” LendingClub CEO Scott Sanborn told Reuters.