Community Banks Sue OCC Over Crypto Company Charter Authority

The Independent Community Bankers of America (ICBA) has filed a lawsuit against the Office of the Comptroller of the Currency (OCC), challenging the regulator’s authority to grant national trust bank charters to cryptocurrency companies. The lawsuit, filed on October 2 in the US District Court for the District of Columbia, argues that the OCC has expanded the scope of these charters beyond what Congress intended under the National Bank Act. The ICBA claims that this expansion allows crypto firms to engage in substantial non-fiduciary activities without adhering to the same regulatory framework as insured banks.

The dispute centers on a policy shift that permits digital asset companies to obtain federal trust charters for activities like custody and stablecoin-related services without becoming traditional deposit-taking banks. ICBA President and CEO Rebeca Romero Rainey stated that the organization believes Congress did not intend for crypto companies to gain the credibility of a federal bank charter without assuming the full obligations of insured depository institutions. The lawsuit highlights discrepancies in areas such as FDIC insurance, Community Reinvestment Act obligations, and consumer protections.

The ICBA is also challenging the legal framework supporting these charters, including a March 2, 2026 final rule and Interpretive Letter 1176. The association seeks to vacate Protego Holdings Corp.’s conditional charter approval and is asking the court to rule these actions unlawful. The lawsuit comes as the OCC has increased its involvement with digital asset companies, receiving 40 new bank charter applications since the current administration took office, with 23 involving digital asset activity.

Several crypto firms, including Coinbase, Ripple, and BitGo, have already received or pursued national trust bank charters. A ruling in favor of the ICBA could force the OCC to reconsider the basis for some charters or change how it evaluates future applications. The case highlights a broader debate about competitive equality, with community banks arguing that crypto companies should not receive federal bank status without equivalent regulatory obligations.