Community Bankers Group Sues Federal Regulator Over Crypto Trust Charters

A trade group for community banks sued the Office of the Comptroller of the Currency (OCC) on Friday, Reuters reported. The group says the agency exceeded its authority by making it easier for cryptocurrency firms to obtain national trust bank charters.

The Independent Community Bankers of America (ICBA) represents banks that typically hold less than $10 billion in assets. It filed the suit in the US District Court for the District of Columbia and wants the OCC to revoke a recent rule and related guidance.

The Rule Under Challenge

The lawsuit targets the OCC's March 2 final rule tied to Interpretive Letter No. 1176, PYMNTS reported, citing an ICBA press release. The suit says the rule and the letter try to give the OCC new chartering powers that the National Bank Act does not authorize.

It asks the court to declare both unlawful.

When it issued the rule, the OCC said it clarified the longstanding ability of national banks limited to trust-company operations to carry out non-fiduciary activities alongside fiduciary ones.

The agency said the rule would neither expand nor shrink its authority to charter a national bank, according to PYMNTS.

What a Trust Charter Allows

Under President Donald Trump, the OCC has granted several such charters to firms that mainly deal in crypto, along with other fintech companies, Reuters reported. The charters let companies hold and manage assets for customers and settle payments faster.