Community Banks Challenge OCC's Crypto-Friendly Trust Charters

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

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

The ICBA argues that Congress did not create the national trust charter as an alternative route for crypto firms seeking the status of a federal bank while avoiding requirements tied to insured banking oversight.

The group points out several key differences between national trust charters and the responsibilities typically associated with operating as an insured depository institution, including Community Reinvestment Act (CRA) requirements, consolidated supervision, capital and liquidity standards, and FDIC insurance coverage.