Community Bankers Sue OCC Over Crypto Trust Bank Charters

The Independent Community Bankers of America has sued the Office of the Comptroller of the Currency, asking a federal court to throw out the rule that opened national trust bank charters to crypto firms. The trade group filed the complaint on Oct. 2 in the U.S. District Court for the District of Columbia under the Administrative Procedure Act. American Banker first reported the suit on Oct. 2 from a copy of the filing it obtained.

The suit targets the OCC's March 2, 2026 final rule on national trust banks and the related Interpretive Letter No. 1176. The association wants the court to declare both unlawful and vacate them. It also asks the court to vacate the conditionally approved charter of Protego Holdings, a digital asset custody firm the group opposed.

"The OCC's decision to allow companies to obtain national trust bank charters to conduct substantial non-fiduciary activities exceeds the authority Congress granted the agency," ICBA president and chief executive Rebeca Romero Rainey said in the announcement. She added that Congress did not create the charter as a side door for crypto firms to gain a federal bank charter without the Community Reinvestment Act obligations, consolidated supervision, capital and liquidity standards, and FDIC insurance that apply to insured banks.

The group argues that trust banks which take no deposits sit outside much of federal financial regulation while the charter overrides many state rules, including consumer protections. In its telling, the rule lets firms engaged in risky digital asset work enter banking under lighter oversight than traditional banks face. The complaint calls the result a gaping hole in financial regulation.

The filing follows two weeks after three more approvals. The OCC approved Agora National Trust Bank, Catena Trust Bank, and Bastion Platforms in mid-September, which put the charter fight back in the spotlight. CryptoSlate reported the lawsuit on Oct. 3, citing American Banker's account of the complaint.

The association counts 21 approved or conditionally approved trust banks under the disputed framework, with 13 tied to crypto. Banking groups had objected applicant by applicant while the OCC kept approving. Five crypto-linked applications won decisions in December 2025, covering BitGo, Fidelity Digital Assets, First National Digital Currency Bank, Paxos, and a Ripple-linked applicant. Bridge, National Digital Trust, and Foris DAX, the parent of Crypto.com, followed in February, with Coinbase in April and Laser Digital in May.

American Banker confirmed charters for Coinbase, Circle, and the Trump family-linked World Liberty Financial, and tied the charter rush to the GENIUS Act: state-qualified stablecoin issuers face a $10 billion cap, so a national charter offers the easier path to scale. The suit targets the framework itself rather than one applicant at a time. The OCC was asked for comment on the lawsuit but had not replied by the time of publication, Cointelegraph wrote on Oct. 3.

The legal dispute turns on a wording change. The OCC finalized its national trust bank rule in February with an April 1 effective date, replacing the phrase "fiduciary activities" with the statute's broader wording about trust company operations and related activities. The agency says that language preserves its chartering authority and points to 12 U.S.C. 24(Seventh) as support for nonfiduciary custody and related work.

The association reads the same rule as stretching a limited-purpose trust charter over non-depository, non-fiduciary crypto businesses. It says the OCC had never chartered a national bank that neither took deposits nor engaged in fiduciary activity before the recent wave, and notes the agency has not managed an uninsured bank receivership in nearly a century.

In the February rule, the OCC cited the Supreme Court's Loper Bright decision and said courts must exercise independent judgment when a party with standing disputes whether the National Bank Act authorizes a national trust bank charter. The new suit requests exactly that review.

Protego drew special attention in the announcement. The association opposed the company's application over risk controls and governance, and says Protego laid off most of its workforce in 2023 and faced vendor lawsuits over unpaid bills. Protego received conditional approval in February 2026, and the suit asks the court to vacate that charter too.

Exposure to the case varies by business plan. Plain fiduciary custody sits furthest from the dispute, while nonfiduciary custody, stablecoin issuance and reserves, payments, settlement, conversion, and execution sit nearest to it. Coinbase's approved plan covers digital asset custody as a fiduciary plus transactional services tied to custodied assets, which the OCC defended as trust company operations or related activities.

Forecasts cited in the CryptoSlate report put the stakes in numbers. JPMorgan sees $500 billion in stablecoins by 2028, Coinbase's model centers on $1.2 trillion, and Standard Chartered expects $2 trillion, against about $20.7 trillion in FDIC-insured bank deposits in the second quarter.

The pipeline remains full while the court weighs the rule. Comptroller Jonathan Gould said in August that the agency had received 40 de novo charter applications over about 18 months, with 23 involving digital assets. Pending applicants on the agency's digital asset licensing page include Zerohash, Dakota National Trust Bank, Payward, the parent of Kraken, Lorum National Trust Bank, EDX Trust, and PAYO Digital Bank.

Whether the OCC keeps processing those applications on the same terms is now the open question for each of them.