ICBA Sues OCC Over Trust Charters for Fintech and Crypto Companies

The Independent Community Bankers of America (ICBA) has filed a lawsuit against the Office of the Comptroller of the Currency (OCC), alleging that the agency has exceeded its authority in granting trust charters to fintech and crypto companies.

The ICBA claims that chartering these companies as trust banks could lead to a drain of deposits from community banks, which are essential for local economies. These trust charter banks, which include 13 crypto companies, do not have the same obligation or history of lending to businesses and communities.

According to the lawsuit, the OCC has approved 21 trust banks during the Trump administration, with at least 13 being crypto companies. The ICBA argues that this 'vast expansion of power creates a gaping hole in financial regulation.'

The group is challenging a rule finalized by the OCC earlier this year, which allows for the chartering of uninsured national trust banks that engage substantially in non-fiduciary activities while avoiding traditional banking regulations.