The Independent Community Bankers of America has taken legal action against the Office of the Comptroller of the Currency, alleging that the regulator has exceeded its authority by granting national trust-bank charters to cryptocurrency companies.
The ICBA filed the lawsuit in federal court on Friday, arguing that the OCC is creating an expanded chartering framework that is not authorized under the National Bank Act. The group says crypto firms are being allowed to enter the U.S. banking system without facing the same regulatory requirements as community banks, creating what it calls a serious competitive disadvantage for smaller institutions.
The ICBA is one of the largest U.S. banking advocacy groups representing community and smaller banks. It was also active in opposition to the Digital Asset Market Clarity Act, which failed to advance in the Senate last month. Bankers objected in part to the legislation’s stablecoin provisions, arguing that they did not adequately protect traditional deposit accounts from competition.
The group is now focusing on national trust charters, which crypto companies have increasingly pursued as a way to gain a foothold in the U.S. banking and payments infrastructure.
ICBA President and CEO Rebeca Romero Rainey said Congress did not intend for the national trust charter to provide crypto companies with an alternative route into the banking system. She argued that firms using the structure are not subject to the same requirements involving capital, liquidity, supervision and Federal Deposit Insurance Corp. coverage.
The OCC declined to comment on the lawsuit when contacted by CoinDesk, citing its policy of not discussing ongoing litigation.
The OCC has issued a growing number of trust charters to crypto companies, although those firms generally do not operate like conventional community banks. Many do not offer traditional cash deposit accounts, the type of accounts for which FDIC insurance is designed and required.
The Bank Policy Institute separately expressed support for bringing new financial products and services into the regulated banking sector, provided companies conducting the same activities are held to comparable rules and responsibilities. BPI executive vice president and co-head of regulatory affairs Paige Pidano Paridon said companies should use trust charters only for activities that qualify as trust activities. Firms seeking to conduct traditional banking services, she argued, should obtain full-service banking charters.
The growing use of national trust charters has also been viewed by banking regulators as a sign of renewed interest in obtaining new banking licenses following a long period of limited charter activity.
Several crypto companies have pursued the structure. Crypto-focused firms such as Protego and Erebor are among the new entrants, while established digital-asset companies including Coinbase, Circle and Crypto.com have also moved toward trust-bank structures.
World Liberty Financial, a crypto company partly owned by President Donald Trump and his family, recently received charter approval. The decision has faced criticism from Democratic Senator Elizabeth Warren, who argued that the charter could create another avenue for financial gains for Trump and his family.
The OCC also approved a full national bank charter last month for OpenReserve Bank, a blockchain-focused institution backed by crypto investors including Andreessen Horowitz, Jump Capital and Coinbase Ventures.
The ICBA lawsuit now puts the OCC’s use of national trust charters for crypto companies under legal scrutiny, with the case potentially testing how far the regulator can extend the charter framework to digital-asset businesses.
