The Independent Community Bankers of America has filed a federal lawsuit against the Office of the Comptroller of the Currency, challenging the regulator’s decision to grant national trust-bank charters to cryptocurrency companies.
The banking group alleges that the OCC has gone beyond the authority granted to it under the National Bank Act. In its lawsuit, ICBA argues that the regulator is expanding the national trust charter into a pathway for crypto firms to enter the U.S. banking system without being subject to the same regulatory standards as community banks.
According to ICBA, the differences could put smaller banks at a competitive disadvantage. The group argues that crypto companies operating under trust charters can avoid requirements that apply to traditional banks, including certain capital, liquidity, supervisory and Federal Deposit Insurance Corp. obligations.
ICBA is among the largest U.S. organizations representing community banks. The group has also been active in recent debates over crypto legislation, including its opposition to the Digital Asset Market Clarity Act, which failed to move forward in the Senate last month. Bank groups had raised concerns that provisions governing stablecoins could expose traditional deposit accounts to increased competition.
The lawsuit represents a new challenge to the growing use of national trust charters by digital-asset companies seeking access to the regulated U.S. financial system.
ICBA President and CEO Rebeca Romero Rainey said the national trust charter was not intended by Congress to serve as an alternative entry point for crypto firms seeking the status associated with a federal bank charter. She also pointed to differences in obligations covering capital, liquidity, supervision and FDIC insurance.
The OCC declined to comment on the litigation when approached by CoinDesk.
Crypto companies receiving national trust charters generally do not operate in the same manner as community banks. In particular, they typically do not offer conventional cash deposit accounts, which are the type of deposits covered by FDIC insurance requirements.
The Bank Policy Institute said it supports bringing innovative products and services into the regulated banking system, provided firms performing similar activities are held to comparable rules and responsibilities. BPI’s Paige Pidano Paridon said companies should limit trust charters to activities that fall within the traditional trust framework, while firms seeking to conduct conventional banking activities should pursue full-service bank charters.
The push for national trust charters has also contributed to a rise in new banking names after years of relatively limited charter activity. Crypto-focused firms including Protego and Erebor have pursued the model, while larger digital-asset companies such as Coinbase, Circle and Crypto.com have also sought trust-bank status.
World Liberty Financial, which is partly owned by President Donald Trump and his family, is among the more recent entrants. Its charter approval has attracted criticism from Democratic Senator Elizabeth Warren, who said the approval could create additional opportunities for financial benefits involving the president and his family.
Separately, the OCC granted a full national bank charter last month to OpenReserve Bank, a blockchain-focused institution backed by investors including Andreessen Horowitz, Jump Capital and Coinbase Ventures.
The ICBA’s case places the OCC’s crypto trust-chartering practices under judicial review and could help determine the scope of the regulator’s authority to use national trust charters for digital-asset companies.
