Key points

  • The Independent Community Bankers of America filed the case in the U.S. District Court for the District of Columbia.
  • ICBA wants the court to invalidate an OCC rule and related guidance that facilitate national trust charter applications by crypto firms.
  • National trust charters can permit custody and payment-settlement activities, but they do not allow the holder to take cash deposits or make loans.

The Independent Community Bankers of America has sued the Office of the Comptroller of the Currency, opening a federal-court challenge to the regulator’s approach to national trust bank charters for cryptocurrency and financial-technology companies. The trade group filed the case in the U.S. District Court for the District of Columbia and is asking the court to set aside an OCC rule and related guidance that it says exceed the agency’s statutory authority.

ICBA represents community banks that typically hold less than $10 billion in assets. Its complaint argues that a federal trust charter can give crypto firms the credibility associated with a national bank without imposing the same legal framework that applies to deposit-taking institutions. The group’s central claim is that the National Bank Act does not authorize the OCC to charter non-fiduciary businesses simply because they provide custody or other digital-asset services.

Related reporting: Community Banks Sue OCC Over Crypto Trust Charters

The association said consumers may assume that any federally chartered bank offers the protections commonly linked to insured banks, even though digital assets held by a crypto company under a national trust charter are not necessarily covered by those safeguards. ICBA President and CEO Rebeca Romero Rainey said the lawsuit seeks to return the OCC to what the group views as its statutory limits and require non-fiduciary applicants to meet standards comparable with community banks.

National trust bank charters are narrower than full-service bank charters. They can allow a company to hold and administer assets for customers and support payment settlement, but they do not authorize the company to accept cash deposits or originate loans. That distinction is important because the lawsuit does not allege that chartered crypto firms have the full powers of commercial banks. Instead, it challenges whether the OCC can use the trust-bank route for companies whose proposed activities are not principally fiduciary.

The OCC has granted or advanced several trust-charter applications from crypto and fintech companies during President Donald Trump’s administration. The regulator has described tailored charters as a way to bring new financial activities inside federal supervision. ICBA contends that the approach instead creates an uneven regime: traditional community banks must comply with broader capital, oversight and consumer-protection requirements, while limited-purpose charter holders receive federal status without carrying all of the same obligations.

An OCC spokesperson declined to comment on the litigation, according to Reuters. The filing starts a legal process rather than changing any charter immediately. The government will have an opportunity to respond, and the court will determine whether ICBA has standing, whether the challenged OCC actions are reviewable, and whether the regulator acted within the authority Congress gave it.

The case adds a judicial test to a policy dispute that has otherwise played out through charter applications, agency guidance and industry comment letters. Its outcome could affect how crypto custody and stablecoin businesses seek nationwide authorization, as well as how federal banking law separates fiduciary trust activities from deposit-taking and lending. Until the court rules, the lawsuit represents ICBA’s allegations and legal interpretation, not a finding that the OCC or any chartered firm violated the law.

Sources

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