Community Banks Sue OCC, Challenging Trust Bank Charters for Crypto Firms

A trade group representing US community banks has taken the Office of the Comptroller of the Currency (OCC) to court, arguing the regulator is overstepping its authority by allowing cryptocurrency firms to obtain national trust bank charters for activities the group says are not properly constrained.

According to the complaint filed by the Independent Community Bankers of America (ICBA), the OCC’s approach grants crypto-related companies the legitimacy associated with a federal bank charter while allegedly sidestepping protections and compliance expectations that typically come with insured depository institutions. The lawsuit was filed Friday in the US District Court for the District of Columbia.

Key takeaways

• The ICBA says the OCC exceeded congressional authority by permitting crypto companies to use national trust bank charters for substantial non-fiduciary activity.
• The group argues that the OCC’s framework effectively offers charter credibility without applying key banking requirements such as CRA obligations, consolidated supervision, capital and liquidity standards, and FDIC insurance.
• The lawsuit seeks a judicial outcome that would put the regulator back within its statutory limits.
• National trust charters, as previously reported, are not structured like commercial banks that accept deposits or make loans—an important distinction in the dispute.
• The OCC had not responded to requests for comment at the time the filing was reported.

Community bankers challenge the OCC’s “trust charter” approach

The ICBA’s complaint targets a regulatory pathway that allows certain applicants to obtain national trust bank charters. In the group’s view, the OCC has permitted cryptocurrency firms to gain access to a federal banking license in ways that go beyond what Congress authorized.

ICBA president and CEO Rebeca Romero Rainey argued that the OCC’s decision permits national trust bank charters to be used as a “side door” into the banking system for crypto businesses seeking the credibility of a federal bank charter—without the obligations and oversight that apply to insured depository institutions.

In a statement accompanying the lawsuit, Rainey said Congress did not create the national trust charter to function as an alternative route for crypto firms that want the status of a federal bank while avoiding requirements tied to insured banking oversight.

What ICBA says is missing: the safeguards tied to insured depositories

At the center of the ICBA’s legal argument is the difference between a national trust charter and the responsibilities typically associated with operating as an insured depository institution.

While the ICBA’s filing alleges that crypto-related activities are being enabled through these charters, it contends that the framework lacks several protections it says are essential to standard banking regulation. The group points to obligations and supervisory expectations including:

• Community Reinvestment Act (CRA) requirements
• consolidated supervision
• capital and liquidity standards
• FDIC insurance coverage

The ICBA is asking the court to require the OCC to comply with what it describes as statutory limits. In practical terms, the lawsuit aims to prevent further expansion of the OCC’s current interpretation of what these charters can be used for.

How trust charters differ from commercial banks

Notably, national trust bank charters are not the same as conventional commercial banking licenses. Earlier reporting by Cointelegraph has described the trust charter structure as one that does not authorize firms to accept deposits or make loans, distinguishing it from how commercial banks typically operate.

That distinction matters because it shapes the scope of the debate. The ICBA’s challenge focuses on whether “substantial” non-fiduciary activity conducted under a trust charter crosses into territory that should trigger the broader set of banking regulations that Congress intended for insured depository institutions.

In other words, even if trust charters are not designed to function like full-service banks, the ICBA argues that the OCC’s interpretation effectively provides a level of federal charter credibility without corresponding compliance burdens.

OCC activity and the broader policy question

Cointelegraph previously reported in August that, under President Donald Trump and OCC head Jonathan Gould, the OCC approved or conditionally approved multiple applications from crypto companies seeking trust charters to broaden their services in the United States.

Those earlier approvals, as described in the reporting, included trust charters that expand services while maintaining the structural limitation that the charters do not authorize deposit-taking or lending.

For investors, builders, and compliance teams in the crypto industry, the dispute raises a key question: how far regulators can stretch charter categories created by Congress without triggering the regulatory regime associated with insured banks. For community banks, the alleged mismatch between charter privileges and banking safeguards is the heart of the competitive and regulatory concern.

As the case progresses, attention will likely focus on whether the court agrees with ICBA’s view of congressional intent and whether the OCC’s interpretation of “trust” authority will be narrowed. The immediate uncertainty is procedural and legal—how the court evaluates the statutory boundaries and what remedies it could order.

Readers should watch for any response from the OCC to the allegations in the complaint and for early court developments that signal whether the case is likely to succeed in limiting future trust-charter approvals for crypto-related applicants.