Community bankers sue OCC over crypto firms' trust charters

A trade group for thousands of US community banks has asked a federal court to undo the rules that let crypto firms join the banking system as national trust banks, a charter that skips deposit insurance and much of the oversight ordinary banks face.

Filed on October 2, 2026 in the US District Court for the District of Columbia, the suit names the Office of the Comptroller of the Currency and its head, Comptroller Jonathan Gould. It asks the court to throw out the agency's March 2026 rule and an interpretive letter from 2021.

What the banks are asking for

ICBA wants three things gone. It asks the court to void the OCC's final rule from March 2, 2026, to strike down Interpretive Letter No. 1176 from January 2021, and to cancel the conditional charter the agency gave Protego in February 2026. The case runs under the Administrative Procedure Act, the law that lets courts review federal agency decisions.

At the heart of it sits a question of power. ICBA says Congress let the OCC charter trust banks that act as fiduciaries, meaning they manage money and assets on behalf of other people. It argues that nothing in the National Bank Act lets the agency hand the same charter to firms that neither take deposits nor do that fiduciary work. The group also leans on the major questions doctrine, the idea that an agency needs clear sign-off from Congress before it decides something this large.

Rebeca Romero Rainey, ICBA's president and chief executive, put it plainly. "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," she said.

What a national trust charter is

A national trust charter is not a normal bank license. Trust banks hold and manage assets for clients. They do not take everyday deposits, and they do not make loans. Not a deposit-taking bank.

That split matters for the saver. A customer of an insured bank is covered up to $250,000 if the bank fails. A crypto firm running under a trust charter carries no such backstop, and it sits outside rules such as the Community Reinvestment Act and the capital and liquidity standards that bind ordinary lenders. ICBA argues the charter lets these firms wear the credibility of a federal bank while dodging the duties that come with one.

According to the complaint, the OCC had never, before this recent wave of applications, chartered a national bank that neither took deposits nor acted as a fiduciary. At least 13 of the 21 entities the agency has approved or conditionally approved for national trust charters are crypto or digital-asset firms, BeInCrypto reported. ICBA calls the charter a side door into the banking system.

This case adds to a busy run of fights over who may hold digital assets, landing the same week the SEC floated its own crypto custody rules for investment advisers and funds.

Why crypto firms want the charter

For a crypto company, a federal trust charter is a prize. The appeal is plain. It signals legitimacy to customers and partners, and it can swap a patchwork of state money licenses for one national stamp. Under Gould, the agency has approved or conditionally approved a string of these charters in 2026, with Coinbase, Circle and Paxos among the firms seeking or winning federal approval, according to Cointelegraph.

These same firms have pushed deeper into regulated finance on other fronts. Coinbase's clearing arm was recently registered as a US derivatives clearinghouse, part of a wider move by crypto companies into the plumbing of traditional markets.

ICBA has fought the trust approvals for months, filing formal objections to several of these applications over the past year. Protego sits at the center of the new filing. It won conditional approval in February 2026. The group had opposed that application, pointing to what it called "severely flawed risk and control functions and governance structures that lack independent oversight." Now it wants the approval pulled.

What to watch

The charters stay valid for now. A lawsuit does not freeze them, and the OCC can keep processing applications unless a judge rules otherwise. The agency had not responded to requests for comment, and no hearing date has been set.

Cases under the Administrative Procedure Act rarely move fast. A ruling could take a year or more, and the losing side is likely to appeal. Watch for the OCC's formal response, for any attempt by ICBA to pause new approvals while the case runs, and for whether other bank groups or states sign on. What the court decides will shape whether the trust charter stays an easy path for crypto firms into banking, or turns into a much harder one.