CFTC Clears Trust Companies to Settle Derivatives Trades as Community Banks Sue Over Crypto Charters
Key Takeaways
- •The CFTC will not take enforcement action against clearinghouses that route daily settlements through federally chartered trust companies, provided those firms are treated as settlement banks under Regulations 39.14(c) and (d).
- •Staff Letter 26-30 was issued on November 5 in response to an October 29 request from Nodal Clear, but the relief extends to any qualifying clearinghouse, not just the requester.
- •Regulation 39.14, largely unchanged since its 2011 adoption, does not define trust companies as settlement banks, so the accommodation operates through a staff no-action letter rather than a formal rule rewrite.
- •The OCC has conditionally approved at least nine crypto trust charters since December 2025; these institutions can custody assets and settle payments but lack FDIC insurance and cannot take deposits or make loans.
- •The Independent Community Bankers of America sued the OCC and Comptroller Jonathan Gould under the Administrative Procedure Act, seeking to strike an OCC rule and a 2021 interpretive letter and to rescind Protego Holdings' charter.
The Commodity Futures Trading Commission (CFTC) will not pursue enforcement against derivatives clearinghouses that use crypto firms holding federal trust charters to settle daily trades, following an early November letter from the regulator's clearing division. The relief lands as a boost for companies that have acquired trust charters since the Office of the Comptroller of the Currency (OCC) began issuing conditional approvals in December 2025, but it has not been welcomed by traditional banks, with community banks taking that fight to court.
In a May 18 letter to Comptroller Jonathan Gould, Senator Elizabeth Warren noted that the agency had cleared at least nine crypto trust charters since December 2025. National trust banks can custody assets and settle payments. However, they do not carry FDIC insurance and cannot take deposits or make loans.
What the CFTC's no-action letter says
Staff Letter 26-30, issued by the CFTC's Division of Clearing and Risk and signed by Acting Director Richard Haynes, clarifies that the division will not recommend enforcement action against derivatives clearing organizations that use trust companies to handle daily settlements with their clearing members. Clearinghouses may take this route as long as they treat trust companies as settlement banks for compliance with Regulations 39.14(c) and (d).
The CFTC's clearing division sent the letter in response to an October 29 request from Nodal Clear, which acts as the registered clearinghouse for the CFTC-designated contract markets Nodal Exchange and Coinbase Derivatives. Notably, the clarification applies to any clearinghouse that clears the bar, not just Nodal Clear.
What the letter clarifies about Regulation 39.14
The November 5 letter clarifies what counts as a settlement bank under Regulation 39.14, the rule that covers how clearinghouses handle daily settlement as well as clearing-member and customer funds. The regulator noted that the original version of the rule, which does not include trust companies in its definition of settlement banks, has gone mostly unrevised since it was adopted in 2011. Because the accommodation comes through a staff letter rather than a rule rewrite, clearinghouses leaning on it operate under the division's no-action posture, not an updated settlement-bank definition.
Elsewhere in the rulebook, the terms sit side by side. Section 4d of the Commodity Exchange Act and Parts 1 and 22 of the Commission's regulations require customer funds to be kept with a bank or trust company.
Nodal argued that an institution should be able to handle settlement if it is already trusted to hold customer funds. The firm added that bringing trust companies into the workflow would let clearinghouses fold digital assets into their collateral operations. Nodal also noted that the New York Department of Financial Services (NYDFS) applies similar scrutiny to both banks and trust companies, which it charters under the same banking law.
Community banks fight trust charter approvals in court
The pushback is already in federal court. The Independent Community Bankers of America sued the OCC and Gould in the U.S. District Court for the District of Columbia in early October 2026, filing under the Administrative Procedure Act.
The trade group says the agency has “far exceeded” its statutory authority, and is asking the court to strike both an OCC rule and a 2021 interpretive letter, and to rescind the charter granted to crypto firm Protego Holdings. The court's handling of those APA claims will determine the fate of the OCC rule, the 2021 interpretive letter, and Protego's charter.
ICBA President and CEO Rebeca Romero Rainey said in the lawsuit that the approach “creates a gaping hole in financial regulation.” Gould has defended the charters, telling a Semafor event in May that the agency does not “have a zero risk tolerance anymore.”
The CFTC's settlement relief widens the bank-like footprint that community banks are contesting, letting a chartered trust company sit at the center of derivatives clearing without being subject to the full bank rulebook.
