SKN | Community Banks Sue OCC Over National Trust Charters for Crypto Firms

Key Points

• The Independent Community Bankers of America sued the OCC, arguing that national trust bank charters for crypto companies exceed the regulator’s authority.
• The banking group says crypto firms could receive the credibility of federal bank charters without facing requirements that apply to insured depository institutions.
• The OCC’s 2026 rule says national trust banks may conduct certain non-fiduciary activities, while crypto-related charter applications from firms including Ripple, Fidelity and Paxos have advanced.

The Independent Community Bankers of America (ICBA) has sued the Office of the Comptroller of the Currency (OCC), challenging the regulator’s authority to grant national trust bank charters to cryptocurrency companies conducting certain non-fiduciary activities.

The lawsuit, filed Oct. 2 in the US District Court for the District of Columbia, represents a growing conflict between traditional community banks and the expanding role of cryptocurrency companies within the US banking system.

ICBA argues that the OCC has exceeded the authority granted to it by Congress by allowing crypto-focused companies to obtain national trust bank charters without being subject to the full range of requirements imposed on insured commercial banks.

Community Banks Challenge OCC Charter Framework

ICBA President and CEO Rebeca Romero Rainey said the OCC’s approach effectively creates a route for cryptocurrency companies to obtain the credibility associated with a federal bank charter while avoiding requirements that apply to insured depository institutions.

The organization specifically cited Community Reinvestment Act obligations, consolidated supervision, capital and liquidity standards and Federal Deposit Insurance Corporation insurance as requirements that do not apply in the same manner to limited national trust banks.

ICBA is asking the court to require the OCC to operate within what the banking group considers its statutory limits.

The OCC had not responded to requests for comment at the time of the source report.

OCC Defends Broader Trust Bank Authority

The dispute centers partly on an OCC final rule issued in February 2026 concerning national bank charters limited to trust-company operations.

The OCC said the rule clarifies longstanding authority for national banks limited to trust-company operations and related activities to conduct certain non-fiduciary activities. The agency said the rule neither expands nor contracts its authority to charter national banks. The rule became effective April 1.

The rule applies to all applicants seeking a national bank charter limited to trust-company operations and related activities, rather than being designed specifically for cryptocurrency companies.

That distinction is central to the broader regulatory debate as the OCC considers applications from both traditional financial institutions and digital asset companies.

Crypto Firms Pursue National Charters

The OCC has received and processed a growing number of applications from companies seeking national bank or trust bank status while expanding into digital asset services.

OCC records show applications from firms including Payward, the parent company of Kraken, EDX Trust, Lorum National Trust Bank, PAYO Digital Bank and zerohash national trust bank.

Earlier in 2026, the OCC also issued preliminary conditional approvals for proposed national trust banks associated with Ripple and Fidelity, as well as applications involving Paxos and other financial institutions.

The growing number of applications reflects the broader effort by cryptocurrency and fintech companies to establish federally regulated banking infrastructure for digital asset services.

Trust Charters Differ From Commercial Banks

The trust bank structure is distinct from a conventional commercial bank.

National trust banks operating under these limited charters do not have the same business model as deposit-taking institutions and cannot simply operate as conventional banks that accept customer deposits and make ordinary commercial loans.

That distinction is important to the legal dispute because ICBA argues that companies can nevertheless receive the reputational and regulatory advantages associated with a federal bank charter while avoiding requirements imposed on insured depository institutions.

The OCC, meanwhile, maintains that its trust-bank chartering authority permits institutions operating under the limited structure to conduct qualifying activities within the agency’s statutory framework.

Broader Digital Asset Banking Shift

The lawsuit arrives as US regulators continue integrating cryptocurrency into the formal financial system.

OCC records show numerous pending digital asset licensing applications, including proposed national trust banks for companies involved in crypto custody, trading infrastructure and other digital asset services.

For community banks, the issue extends beyond individual charter applications. ICBA has separately argued that digital asset companies and stablecoin-related businesses could affect the deposit base and competitive environment of traditional banks.

The court challenge could therefore become an important test of how far federal banking regulators can extend national trust charters as cryptocurrency firms seek greater integration with the US financial system.

Outlook

The ICBA lawsuit places the OCC’s interpretation of national trust bank authority before a federal court at a time when digital asset firms are increasingly seeking federally chartered banking structures.

The case will likely focus on the scope of the OCC’s statutory authority and whether the agency’s 2026 rule and related charter decisions comply with the framework established by Congress. The outcome could influence how cryptocurrency companies access federal banking infrastructure and how community banks compete with newly chartered digital asset institutions.