Community Banks Challenge OCC Over Crypto Trust Charters

A trade group representing US community banks has taken the Office of the Comptroller of the Currency (OCC) to court, arguing the regulator is overstepping its authority by allowing cryptocurrency firms to obtain national trust bank charters.

The Independent Community Bankers of America (ICBA) claims the OCC's approach grants crypto-related companies the legitimacy associated with a federal bank charter while allegedly sidestepping protections and compliance expectations that typically come with insured depository institutions.

The lawsuit targets a regulatory pathway that allows certain applicants to obtain national trust bank charters, which the ICBA views as a 'side door' into the banking system for crypto businesses seeking the credibility of a federal bank charter without the obligations and oversight associated with insured banking oversight.

The ICBA is asking the court to require the OCC to comply with what it describes as statutory limits, preventing further expansion of the OCC's current interpretation of what these charters can be used for.