Key highlights:
A trade group for small US banks has asked the federal court to stop the country’s top bank regulator from allowing crypto firms to access banking. The Independent Community Bankers of America (ICBA) filed the case against the Office of the Comptroller of the Currency (OCC) on Friday.
ICBA takes OCC to court
The ICBA opined that Congress never gave the OCC the authority to hand national trust bank charters to firms that do crypto business. It wants the court to throw out a rule issued on March 2, 2026, and the OCC’s Interpretive Letter No. 1176, which is linked to that rule.
“Congress did not create the national trust charter as a side door into the banking system for crypto firms seeking the credibility of a federal bank charter,” ICBA President and CEO Rebeca Romero Rainey said in a statement.
A national trust bank charter lets a company hold assets for customers and settle payments quickly. Since President Donald Trump took office, the OCC has approved a couple of these charters for crypto businesses and other fintech firms.
Some of the approved firms were structured as crypto banks, including Protego and Erebor. Others are top crypto firms, such as Coinbase, Circle and Crypto.com. Ripple, Paxos, Fidelity, BitGo, and Kraken’s parent company Payward also submitted applications.
In August, the OCC gave a conditional approval to Trump’s WLFI. Last month, the OCC also gave a full national bank charter to OpenReserve Bank, a blockchain bank backed by Jump Capital and Coinbase Ventures.
The community bank arguments
The ICBA represents banks that have less than $10 billion in assets. In its complaint, the group said the OCC is “sweeping new powers to charter national trust banks that are not authorized by the National Bank Act,” adding that this puts community banks “at a severe competitive disadvantage.”
The group said crypto firms get the benefits of a federal charter without the duties that come with a full bank license. The community banks also highlighted that the charter overrides many state consumer protection laws while the firms face lighter oversight than normal banks.
The complaint specifically mentioned one company by name. The ICBA wants the court to cancel the conditional charter given to Protego Holdings, citing the weaknesses in the firm’s governance and risk controls.
Industry reaction to the crypto charters
Before now, Democratic Senator Elizabeth Warren had called some of the approvals illegal, especially the World Liberty Financial decision. She accused the OCC of allowing presidential corruption.
Another bank lobby, the Bank Policy Institute (BPI), shared a balanced view on the new lawsuit that was filed. Paige Pidano Paridon, its executive vice president, said they are open to new products, but only under equal rules for everyone.
“BPI supports efforts to bring innovative new products and services into the regulated banking ecosystem, provided that the entities engaging in those activities are subject to the same rules and responsibilities as every other chartered institution engaging in the same activities,” she said.
She also said trust charters should go only to firms that limit themselves to trust activities. “If they want to engage in traditional banking activities, they should seek full-service banking charters,” she said.
The latest charter application reported by Coincodex was Jack Dorsey’s filing for a Builders Bank & Trust.
Source:: Banking Group Sues OCC to Block Crypto Firms From Banking