Banking Group Sues OCC Over Crypto Trust Charters

The Independent Community Bankers of America (ICBA) launched a legal challenge against the Office of the Comptroller of the Currency (OCC) on Friday. The banking group alleges that the regulator has exceeded its legal authority under the National Bank Act by issuing national trust bank charters to various cryptocurrency companies.

According to the ICBA, these crypto-focused trust banks are not held to the same regulatory standards as traditional community banks. The group argues that this creates a competitive disadvantage, as these firms are not subject to the same requirements regarding capital, liquidity, supervision, or the necessity for Federal Deposit Insurance Corp. insurance.

ICBA President and CEO Rebeca Romero Rainey stated that Congress did not intend for the national trust charter to serve as a side door into the banking system for crypto firms seeking the credibility of a federal charter. The OCC declined to comment on the ongoing litigation.

The OCC has been issuing these charters to a range of entities, including crypto-focused banks like Protego and Erebor, as well as established industry players such as Coinbase, Circle, and Crypto.com. Recent approvals have also included World Liberty Financial and OpenReserve Bank, the latter of which received a full-fledged national bank charter.

The lawsuit follows the ICBA's recent opposition to the Digital Asset Market Clarity Act, where the group raised concerns regarding stablecoin provisions and potential competition with traditional deposit accounts. While regulators have noted that the pursuit of these charters has helped revive the issuance of new banking names, the ICBA maintains that the current oversight framework is insufficient for the digital asset sector.