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Case: 24-2355, 01/17/2025, DktEntry: 48.1, Page 1 of 8
No. 24-2355
IN THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
PAYSERVICES BANK,
Plaintiff-Appellant,
V.
FEDERAL RESERVE BANK OF SAN FRANCISCO,
Defendant-Appellee.
On Appeal from the United States District Court for
the District of Idaho
No. 1:23-cv-00305-REP
Hon. Raymond E. Patricco, Jr.
APPELLEE’S FURTHER
SUPPLEMENTAL EXCERPTS OF RECORD
Volume 1 of 1
Jonathan K. Youngwood
Meredith Karp
Simpson Thacher & Bartlett LLP
425 Lexington Avenue
New York, NY 10017
Telephone: (212) 455-3539
jyoungwood@stblaw.com
meredith.karp@stblaw.com
Attorneys for Defendant-Appellee
Federal Reserve Bank of San Francisco
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INDEX
Cease-and-Desist Order, dated October 18, 2024 ................................... 3
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RAUL R. LABRADOR
ATTORNEY GENERAL
JAMES J. SIMERI
Chief of Consumer Protection Division
NATHAN H. NIELSON, ISB No. 9234
Deputy Attorney General
954 W. Jefferson Street, 2nd Floor
Boise, Idaho 83702
Telephone: (208) 334-4543
Facsimile: (208) 334-4151
Email: nathan.nielson@ag.idaho.gov
Attorneys for the Department of Finance
BEFORE THE DIRECTOR OF THE DEPARTMENT OF FINANCE
OF THE STATE OF IDAHO
In the Matter of:
PAYSERVICES, INC. AND PAYSERVICES Docket No. 2024-41-02
BANK
ORDER TO CEASE AND DESIST
Respondents.
The Director of the Idaho Department of Finance ("Department"), being authorized to
administer and enforce the Idaho Bank Act, Idaho Code § 26-101 et seq. (the "Act"), has
determined based on the following Findings of Fact and Conclusions of Law, that it is in the public
interest to order PayServices, Inc. and PayServices Bank (collectively, "PayServices") to
immediately CEASE AND DESIST from acts, practices, or omissions that violate the Act.
FINDINGS OF FACT
1. On April 8, 2022, PayServices applied to the Department for a bank charter.
2. On August 3, 2022, PayServices received preliminary, conditional approval to
engage in the business of banking from the Department.
3. On September 12, 2022, the Department granted a waiver to PayServices to use the
ORDER TO CEASE AND DESIST — Page 1 of 6
FER-003
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word "bank" in its name in the state of Idaho.
4. On May 4, 2023, the Department notified PayServices that if it was unable to satisfy
all conditional approval requirements from the preliminary approval letter by August 3, 2023, that
the preliminary approval would expire. The Department also notified PayServices that if the
conditions were not met by that date, it could submit a new application for a bank charter.
5. On August 4, 2023, The Department notified PayServices that it had not met the
conditions to receive a bank charter. The Department notified PayServices that if it was continuing
to seek a bank charter, that it was required to resubmit an updated application by August 25, 2023.
6. PayServices timely provided the requested updated application documents.
7. On October 16, 2023, the Department granted a one-time extension of the
preliminary charter approval to October 15, 2024. The Department notified PayServices that if
the conditions outlined in the August 3, 2022, letter were not met by October 15, 2024, and if
PayServices still sought a charter from the Department, it would have to submit a new application.
8. PayServices failed to meet the conditions outlined in the August 3, 2022, letter.
9. On October 16, 2024, the Department notified PayServices that the preliminary
approval had expired and was now terminated. The Department also notified PayServices that it
could submit a new application if it was still interested in seeking an Idaho bank charter.
10. On October 16, 2024, the Department rescinded its September 12, 2022, waiver
allowing PayServices to use the word "bank" in its name. The Department notified PayServices
that "no person may advertise or transact business in this state under a name or title that contains
the word `bank,' banker," bancorp,"saving bank,' `trust company,' or a word or words of similar
import, unless the person has been granted a charter to engage in banking or trust business in this
state by the director, or unless the director has granted the person a waiver from this prohibition .
ORDER TO CEASE AND DESIST — Page 2 of 6
FER-004
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. . ." Idaho Code § 26-1202. The Department further notified PayServices that it must refrain from
using "PayServices Bank" and "bank" in any transactions, written communications, and
advertisements.
11. On October 16, 2024, Lionel Danenberg, an executive of PayServices,
corresponded with the Department and stated that PayServices Bank rejected the Department's
recission and refused to stop using "PayServices Bank" and "bank."
CONCLUSIONS OF LAW
AUTHORITY OF THE DEPARTMENT
12. The Department has a duty to administer and enforce the Act.
13. Idaho Code § 26-1115 provides as follows, in pertinent part:
If the director of the department of finance finds that . . . any person
has violated or is about to violate any provision of this [Idaho Bank
Act], any rule or order issued under the act, any condition imposed
in writing by the director, or any written agreement entered into with
the director, the director may order the . . . person to cease and desist
from any such violation or practice. The order shall be issued
pursuant to chapter 52, title 67, Idaho Code.
PAYSERVICES' CONTINUED USE OF THE WORD BANK VIOLATES THE ACT
14. PayServices is violating Idaho Code § 26-1202 by refusing to refrain from using
the name "PayServices Bank" or the word "bank."
15. Idaho Code § 26-1202 provides as follows, in pertinent part:
. . . [N]o person may advertise or transact business in this state under
a name or title that contains the word "bank," "banker," "bancorp,"
"savings bank," "trust company," or a word or words of similar
import, unless the person has been granted a charter to engage in
banking or trust business in this state by the director, or unless the
director has granted the person a waiver from this prohibition as set
forth in this section.
ORDER TO CEASE AND DESIST — Page 3 of 6
FER-005
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16. As of October 16, 2024, PayServices is not a chartered bank and does not have a
waiver from the Director permitting it to use the word "bank" in its name.
17. Therefore, PayServices refusal to refrain from using the word "bank" and its
ongoing use of the word bank in its name is a violation of Idaho Code § 26-1202.
ORDER
The Director, having reviewed the foregoing, good cause being shown, and the public
interest being served thereby,
NOW, THEREFORE, the Director HEREBY FINDS that PayServices has violated the
Idaho Bank Act as set forth above.
Pursuant to Idaho Code §§ 26-1115 & 1202, PAYSERVICES IS HEREBY ORDERED
that it and its agents and employees immediately CEASE AND DESIST from acts, practices, or
omissions which constitute a violation of the Act. PayServices may not advertise or transact
business in Idaho under a name or title that contains the word "bank," "banker," "bancorp,"
"savings bank," "trust company," or a word or words of similar import.
This ORDER TO CEASE AND DESIST is effective upon issuance.
IT IS SO ORDERED.
DATED this I VI day of October 2024.
STATE OF IDAHO
. , DEPARTMENT OF FINANCE
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ORDER TO CEASE AND DESIST — Page 4 of 6
FER-006
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NOTICE
Pursuant to the Idaho Administrative Procedure Act, Idaho Code § 67-5201 et seq.,
Respondent may appeal from this order within twenty-eight (28) days of the service date of this
order. An appeal is filed when it is received by the Department or postmarked within the time
limits provided in this Notice. Any such appeal must be in writing and sent via mail OR via email
to:
Salvador Cruz
Financial Institutions Bureau Chief
Idaho Department of Finance
P.O. Box 83720
Boise, Idaho 83720-0031
salvador.cruz@finance.idaho.gov
An appeal may also be served on the Department's counsel, Nathan H. Nielson, Deputy Attorney
General, at nathan.nielson@ag.idaho.gov.
If the Applicant timely appeals this action, the Department will assign the contested case
proceeding to the Office of Administrative Hearings pursuant to Idaho Code § 67-5280(2)(a).
Proceedings will be conducted in accordance with the Idaho Administrative Procedure Act, Idaho
Code § 67-5201 et seq. and the Idaho Rules of Administrative Procedure (IDAPA 62.01.01).
ORDER TO CEASE AND DESIST — Page 5 of 6
FER-007
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CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on thisle day of October, 2024, I caused a true and correct
copy of the foregoing fully executed ORDER TO CEASE AND DESIST to be served on the
following by the designated means:
Lionel Danenberg El U.S. Mail, Postage Paid
PayServices E] Certified mail
2234 North Federal Highway, #3035 ❑ Facsimile
Boca Raton, FL 33431 El Email: lionel@payservices.com
Ailen Evaniuck
Paralegal
ORDER TO CEASE AND DESIST - Page 6 of 6
FER-008