Community Banks Sue OCC Over Cryptocurrency-Backed Bank Licenses
A group of American community banks has filed a lawsuit against the Office of the Comptroller of the Currency (OCC) over the issuance of national trust bank licenses to cryptocurrency companies.
The Independent Community Bankers of America (ICBA) filed the lawsuit on October 2 in federal court in Washington, D.C., challenging a rule finalized by the OCC on March 2 and an interpretive letter from the agency.
The ICBA argues that the OCC has overstepped its authority under the National Bank Act by granting licenses to companies that do not engage in trust activities. The lawsuit seeks to have the rule and the interpretative letter declared invalid, as well as the conditional approval of Protego Holdings' license in February.
The ICBA claims that these banks are largely exempt from federal regulation because they do not accept deposits and therefore lack obligations such as those under the Community Reinvestment Act, consolidated supervision, capital and liquidity requirements, and FDIC insurance. The group's president, Rebeca Romero Rainey, stated, 'The Congress did not create the trust license as a backdoor for cryptocurrency companies.'