Community banks sue OCC over crypto trust bank charters

The Independent Community Bankers of America (ICBA), which mostly represents smaller US banks, filed a lawsuit on Friday against the Office of the Comptroller of the Currency (OCC). The bankers argue the regulator went beyond its powers when it began handing national trust bank charters to crypto companies. The ruling will decide whether the trust charter becomes the main way crypto enters the American banking system.

What exactly are the bankers challenging?

The suit was filed in the federal district court for the District of Columbia. According to CoinDesk, the ICBA says the OCC claimed "sweeping new powers" to issue national trust charters that the National Bank Act does not authorize.

The core complaint is about unequal obligations. A crypto firm with a trust charter gets the credibility of a federal bank status, yet it avoids capital and liquidity standards, consolidated supervision, Community Reinvestment Act duties and FDIC insurance. Ordinary community banks live under all of those rules.

"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."

- Rebeca Romero Rainey, president and CEO of the ICBA, from a statement on October 2, 2026

How is a trust bank different from a regular one?

To see what the fight is about, compare the two types of institution. A national trust bank answers to the OCC, but its business is narrower.

• No deposits or loans: Cointelegraph reports that this charter does not allow taking deposits or making loans.
• The main work is custody, settlement and fiduciary management.
• Customers of such firms get no FDIC-insured accounts, since that insurance applies only to deposit-taking institutions.
• For a company, the charter offers one federal status instead of licenses state by state.

The bankers do not object to the trust model itself. They object to "substantial non-fiduciary activities", meaning services that go beyond fiduciary work.

Who already holds these charters?

CoinDesk reports that the OCC has been approving them at a steady pace. Some holders were built as crypto-focused banks, such as Protego and Erebor. Others grew out of well-known market names: Coinbase, Circle (the issuer of USDC) and Crypto.com.

The latest addition is World Liberty Financial, partly owned by the family of Donald Trump. The approval drew sharp criticism from Senator Elizabeth Warren, who wrote that the charter gives the president and his family a new way to profit. Last month the OCC also granted a full national bank charter to OpenReserve Bank, a blockchain bank backed by Andreessen Horowitz, Jump Capital and Coinbase Ventures.

The OCC told reporters it does not comment on litigation.

Why did the lawsuit land now?

The ICBA has been fighting the crypto industry on several fronts. The group played a visible role in the failure of the Clarity Act in the Senate last month, because bankers disliked stablecoin provisions that set up direct competition with deposit accounts. Deposits are the foundation of a small bank's business.

After the setback in Congress, the argument moved to the courts. Now the ICBA is targeting the charters that let crypto companies into the banking and payments system without a new law.

Banking groups are not unanimous. The Bank Policy Institute backs new products entering the regulated space, but demands the same rules for everyone. Its representative Paige Pidano Paridon said trust charters should go only to firms that stick to trust activities, and the rest should apply for a full-service bank charter.

What happens next?

The ICBA asks the court to return the OCC to its statutory limits. The central question is simple: do trust activities cover the services crypto firms actually offer?

If the court sides with the bankers, the practice behind new applications comes into doubt. If it rules against them, the trust charter settles in as the standard route for companies that hold Bitcoin and stablecoins for clients. A quick verdict is unlikely: cases like this take months.