The Independent Community Bankers of America (ICBA) filed a federal lawsuit against the Office of the Comptroller of the Currency (OCC) in the U.S. District Court for the District of Columbia, challenging the regulator's authority to grant national trust bank charters to cryptocurrency companies.
The complaint targets an OCC rule and legal interpretation that expanded national trust charters to cover non-fiduciary digital asset activities. According to the ICBA, the OCC exceeded its statutory authority under the National Bank Act by allowing crypto companies to secure federal trust charters without performing traditional fiduciary duties.
Regulatory Concerns
Community bankers argue the policy creates a regulatory loophole. Under national trust charters, digital asset firms gain the prestige and operational reach of a federal banking license while avoiding standard capital, liquidity, consolidated supervision, and Community Reinvestment Act (CRA) obligations. Additionally, deposits are not covered by Federal Deposit Insurance Corporation (FDIC) insurance.
The lawsuit seeks to vacate the OCC's final rule and Interpretive Letter 1176, which replaced language strictly limiting national trust banks to fiduciary activities with broader language allowing non-fiduciary operations. According to court filings, the OCC has approved or conditionally approved 21 trust bank charters, with at least 13 tied to digital asset firms, including Circle, Coinbase, and Ripple.
ICBA President and CEO Rebeca Romero Rainey stated that federal chartering powers should not be repurposed for non-bank technology firms, noting that American consumers expect federally chartered banks to carry federal protections.
Industry Response
The lawsuit has drawn criticism from crypto industry leaders. Cody Carbone, CEO of The Digital Chamber, suggested the lawsuit does not reflect the views of local community bankers, arguing that many community banks seek to partner with digital asset firms.
If the court rules in favor of the ICBA, crypto infrastructure providers, stablecoin issuers, and custody platforms operating under conditional charters could be required to restructure their federal operations or seek state-level trust charters instead.
