Charity Bank, which has a balance sheet of about £85m and has lent money to more than 1,000 charities, is a registered charity and is authorised as a bank by the Financial Services Authority, meaning it must comply with both banking and charity law.
The lender proposed amendments to its governing documents in order to comply with FSA rules, but it said the commission had "not been able to agree" to all of the amendments.
Malcolm Hayday, chief executive of Charity Bank, told Third Sector that the bank faced problems ensuring its articles complied with both sets of rules.
Hayday said the main problem concerned how any surplus would be distributed in the event that the bank was wound up, but other issues might also arise.
"Banking law and charity law are heading in different directions," he said. "When new banking regulations were drawn up at Basel, they weren’t thinking there was such a thing as a Charity Bank."
He said his organisation had sought support for changes to its articles from the Charity Commission but had not received the backing it needed. "The commission has told us: ‘We want to be helpful but we can’t actually be helpful,’" he said.
"We’re still in discussions with them but we had only 28 days to appeal, so rather than lose any chance of clarifying things, we put the appeal in. If we find a solution in the meantime, we will withdraw the appeal."
Hayday said he was confident a solution would be found. "At the moment, we’re not quite sure what the solution would be," he said. "But we’re confident this can all be worked out."
Charity Bank first applied to the commission to change its governing documents last year.
At the time, Hayday said the bank had to comply with new Europe-wide rules governing the level of capital banks must hold, but that the changes the bank had requested were not primarily to comply with these rules.
A commission spokeswoman said Charity Bank had applied to the commission for prior consent to changes to its articles, as required by the Charities Act 2011.
"The application was made because of requirements in the law relating to banking," she said. "The commission was able to give consent to some of the proposed changes, but not all."
She said the commission and Charity Bank were continuing to discuss possible solutions, but Charity Bank had already appealed to the charity tribunal.