US Community Banks Sue OCC, Say It Lacks Authority to Grant Trust Bank Charters to Digital-Asset Firms

U.S. community banks have sued the Office of the Comptroller of the Currency, challenging the regulator's authority to grant federal trust bank charters to digital-asset companies.

Coin Bureau reported on October 3 that the Independent Community Bankers of America, a trade group representing U.S. community banks, filed the lawsuit in federal court in Washington, D.C. The group argues that the OCC exceeded the legal authority granted by Congress by issuing National Trust Bank charters to digital-asset companies and other nontraditional financial firms.

"Congress did not create the National Trust charter to provide a workaround for digital-asset companies," ICBA President and Chief Executive Officer Rebeca Romero Rainey said.

The OCC has recently allowed a string of digital-asset firms to enter the trust banking business. Foris DAX, the operator of Crypto.com, Coinbase and World Liberty Trust Company have received National Trust Bank charters from the agency.

ICBA argues that those approvals could undermine regulatory parity between traditional banks and digital-asset companies. It says digital-asset firms with trust bank charters can operate as federally chartered financial institutions without being subject to some of the rules that apply to conventional banks.

The OCC did not comment separately on the lawsuit.