The Independent Community Bankers of America (ICBA), a trade group representing community banks, has sued the Office of the Comptroller of the Currency (OCC), claiming that the US banking regulator's decision to allow cryptocurrency companies to obtain limited national trust bank charters exceeds the authority Congress granted the agency.

The trade group filed the suit Friday in the US District Court for the District of Columbia, placing the scope of the OCC's chartering authority before a federal court. In its as-filed complaint, the group claims the OCC has granted crypto firms the credibility of a US bank charter without sufficient safeguards or compliance with the requirements that apply to normal banks.

“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 CEO Rebeca Romero Rainey said in a statement. “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 without the Community Reinvestment Act obligations, consolidated supervision, capital and liquidity standards, and FDIC insurance that apply to insured depository institutions.”

Rainey added that the ICBA is asking the court to return the OCC to its statutory limits. The core question in the case is whether the recent wave of charter approvals rests on authority Congress actually conferred on the agency — the issue the complaint asks the court to decide.

The OCC was asked for comment on the lawsuit but had not replied by the time of publication.

Cointelegraph reported in August that under President Donald Trump and OCC head Jonathan Gould, the agency has approved or conditionally approved a slew of applications from crypto companies seeking trust charters to expand their services in the US. Even so, trust bank charters do not permit companies to accept deposits or make loans, distinguishing them from conventional commercial banks. That gap between the credibility of a federal charter and the obligations carried by full bank status sits at the center of the ICBA's challenge, which frames the charters as an entry point to the banking system that bypasses the requirements attached to insured depository institutions.

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Source: Cointelegraph