Key points

  • The Independent Community Bankers of America filed suit in federal court on October 2 challenging an OCC rule and related guidance for national trust bank charters.
  • ICBA argues that the OCC exceeded its statutory authority by allowing chartered trust banks to conduct substantial non-fiduciary crypto activities.
  • The complaint also seeks to vacate Protego's conditional charter, but the court has not ruled on the trade group's allegations.

The Independent Community Bankers of America sued the Office of the Comptroller of the Currency on October 2, challenging a federal policy that supports national trust bank charters for companies focused on digital-asset services. The trade group filed the case in the U.S. District Court for the District of Columbia. It asks the court to invalidate a March 2, 2026 rule and related OCC guidance, and to vacate the conditional national trust bank charter issued to Protego. The filing opens a new legal front over how crypto custody and other asset services fit within the federal banking system.

What ICBA is challenging

ICBA argues that the National Bank Act permits a national trust bank to perform fiduciary activities, but does not authorize the OCC to use that charter for an institution whose principal business includes substantial non-fiduciary crypto services. The association says the agency crossed that boundary through its final rule and Interpretive Letter No. 1176. Those are the plaintiff's legal claims, not findings by the court. The OCC did not comment on the litigation when contacted by Reuters.

Related reporting: New York and Wyoming link crypto supervision under interstate pact

Regulatory protections are central to the case

The lawsuit focuses heavily on differences between limited-purpose trust banks and insured commercial banks. ICBA says crypto-focused national trust banks can operate without Federal Deposit Insurance Corporation coverage and without some requirements that apply to deposit-taking institutions, including Community Reinvestment Act obligations and elements of consolidated supervision. The group also points to capital and liquidity standards as safeguards it believes should accompany bank-like activities. National trust banks do not accept ordinary cash deposits, however, and their legal powers differ from those of full-service banks.

What the charters can enable

Reuters reported that trust charters can allow companies to hold and manage assets and support faster settlement, while not authorizing them to take cash deposits or make conventional loans. For digital-asset companies, a federal charter can provide a nationwide framework for custody and related services instead of relying exclusively on state-by-state trust licenses. ICBA contends that this structure gives chartered firms a federal advantage without subjecting them to the complete supervisory framework imposed on insured banks. Supporters of federal trust charters have generally presented them as a way to bring specialized asset businesses under OCC oversight.

Why Protego is named

ICBA's requested remedy extends beyond the general policy. The complaint asks the court to set aside the OCC's February 2026 conditional approval of Protego's national trust bank charter. According to ICBA's release, Protego plans to offer digital-asset custody, trading, lending and issuance services. A conditional approval does not end the supervisory process, and the lawsuit does not itself revoke the charter. Any change would depend on the court's jurisdiction, its assessment of the Administrative Procedure Act claims and the remedy it considers appropriate.

What happens next

The OCC will have an opportunity to respond, and other affected parties may seek to participate. The court will first address procedural questions before deciding whether the agency's rule and interpretation are lawful. The case could clarify how far the OCC may extend the national trust bank model when a company's business centers on digital assets rather than traditional fiduciary services. For now, the challenged policy and Protego's conditional approval remain matters under litigation. The filing does not establish that the OCC acted unlawfully, nor does it determine how regulators will treat other pending or approved crypto charter applications.

Sources

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