Community bankers sue US banking regulator over crypto trust charters

What happened

The Independent Community Bankers of America took the Office of the Comptroller of the Currency to federal court. The complaint was filed Oct. 2 in the District of Columbia's federal district court and names the OCC and Comptroller Jonathan Gould as defendants.

The suit, brought under the Administrative Procedure Act, asks the court to set aside three OCC actions. They are the National Bank Chartering final rule published March 2, 2026, Interpretive Letter 1176 issued in January 2021, and the conditional charter granted to digital asset firm Protego in February 2026. The ICBA also wants the OCC barred from using the rule or the letter to approve other charters.

The ICBA argues the OCC exceeded the statutory authority Congress granted under the National Bank Act by letting crypto companies secure federal trust charters without performing traditional fiduciary duties. The group says the charters open a loophole, because digital asset firms gain the reach of a federal banking license without standard capital, liquidity, consolidated supervision or Community Reinvestment Act obligations, and without FDIC coverage.

By ICBA's count, the OCC granted full or conditional approval to 21 trust banks during the Trump administration, and at least 13 of them are crypto companies. Crypto companies that have secured approval include Circle, Coinbase and Ripple.

Why it matters

The ICBA calls the arrangement a gaping hole in financial regulation. Rebeca Romero Rainey, its president and chief executive, said American consumers reasonably expect a federally chartered bank to carry federal protections, and that digital assets held at a crypto firm operating under a national trust charter do not carry those safeguards.

The case tests whether crypto firms can keep using national trust charters as a route into federal banking. If the court rules for the ICBA and vacates the OCC's trust rule, crypto infrastructure providers, stablecoin issuers and custody platforms on conditional charters could be required to restructure their federal operations.

The lawsuit drew pushback from parts of the crypto industry. Cody Carbone, chief executive of The Digital Chamber, wrote on X that community banks are ready to compete, while the trade group lobbies Washington to block competition.

What the data shows

• The OCC has granted full or conditional approval to 21 trust banks during the Trump administration, and at least 13 of them are crypto companies by ICBA's count.
• Existing national trust banks already have close to $2 trillion in assets under custody or safekeeping, the OCC noted.
• Two member banks with under $2.5 billion in assets apiece have each already lost business worth hundreds of thousands of dollars this year to crypto firms holding conditional OCC approval.
• Protego's first conditional approval, granted in 2021, expired in 2023, the same year the company cut more than half its staff.

Background

• The lawsuit came months after Senator Elizabeth Warren of Massachusetts accused the OCC of illegally granting banking charters to crypto companies.
• The ICBA has also joined other bank groups in Congress in urging senators to tighten stablecoin yield limits in the CLARITY Act, which stalled in a Senate procedural vote last month.

What is still unclear

• The court has not ruled on the challenge, and the reports do not say when it will.
• The reports do not say whether the OCC will change the final rule or Interpretive Letter 1176 while the case proceeds.
• The reports do not say what Protego plans to do with its conditional charter.

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