- The Independent Community Bankers of America sued the OCC on Friday, arguing the regulator exceeded its legal authority by granting crypto firms national trust bank charters that carry bank-like status without full bank rules.
- Dispute has been building since May this year.
- Community banks remain worried about losing deposits while crypto custody and stablecoin firms continue to chase federal legitimacy.
A trade organization representing community banks in the US has filed a lawsuit against the Office of the Comptroller of the Currency (OCC), claiming the regulator overstepped its jurisdiction when it provided national trust bank charters to cryptocurrency companies.
The Independent Community Bankers of America (ICBA) initiated the case in the District of Columbia against a recent action by OCC and its related guidance. They argue that crypto companies receive the credibility of a bank charter in the US without complying with all the regular bank requirements.
A lawsuit aimed at the OCC’s chartering authority
Under national trust charters, companies are permitted to manage customer funds and process transactions. However, they cannot take cash deposits or give loans. ICBA has pointed out that extending these charters to crypto companies takes the OCC’s mandate too far, as per the report by Reuters.
“American consumers reasonably expect a federally chartered bank to carry federal protections.” — ICBA President and CEO Rebeca Romero Rainey, in an ICBA statement on the lawsuit against the OCC
ICBA President and CEO Rebecca Romero Rainey said digital assets held by crypto firms under national trust charters do not come with the same protections. An OCC spokesperson declined to comment to Reuters.
Warren and community banks were already pushing back
The dispute has been building for months. In May, ICBA opposed the charter application of Payward, Kraken’s parent company. OCC’s records indicate that application for Payward National Trust Company’s was submitted on May 8.
Senator Elizabeth Warren had raised these concerns before. She issued a letter in May stating that since December 2025 the OCC had granted at least nine national trust charters to crypto firms and questioning if some of their activities can be classified under the activities allowed for a trust company.
“These companies are effectively crypto banks that want to evade the fundamental safeguards and obligations that come with being a bank.” — Senator Elizabeth Warren, in a May 18 letter to Comptroller Jonathan Gould
The OCC says it only clarified existing powers
The OCC views the matter in a different light. Its final chartering rules, which took effect on April 1, states that it “would neither expand nor contract” the chartering authority of the agency. Instead, it explains that trust-limited national banks may perform a range of non-traditional functions related to the activities of trust companies.
The statistics shed light on the reasons behind the fierce debate surrounding the matter. Comptroller Jonathan Gould has come out with a statement that the OCC has got 40 applications for new bank charters in roughly 18 months and that 23 of these are for digital assets. This is eight times as much as in the preceding four years, according to earlier materials from Cryptopolitan.
Why the charter fight reaches the global crypto market
The situation has implications that reach beyond US banking. A study by the Bank for International Settlements indicates that the volume of stablecoins on the market could exceed the $300 billion mark by 2026, marking a staggering 98% of the total as linked to the US dollar.
Simultaneously, according to the Financial Stability Board, different jurisdictions have major gaps in the way they implement regulations, allowing for regulatory arbitrage to happen. The OCC lawsuit can help define the extent of the applicability of the US trust companies charter in the crypto area and indicate the weight of the federal charter in the global market.
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FAQs
Who is suing the OCC and why?
The Independent Community Bankers of America, a trade group for community banks, sued the OCC on Friday, arguing its decision to grant national trust bank charters to crypto firms exceeds the agency's authority and Congress's intent while holding traditional banks to stricter rules.
What can a national trust bank charter actually do?
It lets a firm hold and manage assets for customers and settle payments faster, but it does not allow the holder to take cash deposits or make loans, and, as with Bastion's conditional approval, it brings no FDIC insurance or automatic Federal Reserve payment access.
How many of these crypto charters has the OCC approved?
Senator Elizabeth Warren said in her 2026 letter that the OCC had approved at least nine national trust charters for crypto companies since December 2025, and Comptroller Jonathan Gould said the agency received 40 new-bank applications in about 18 months, 23 of them involving digital assets.
Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.
Ibiam Wayas
Ibiam Wayas has covered the crypto news beat since 2019. He studied Computer Science at National Open University of Nigeria. His work has appeared on various crypto news platforms, including Coinfomania, Crypto News Australia, and AltcoinBuzz. Drawing on his background in Computer Science, he now focuses on crypto, robotics, and longevity news.
