Community Banks Sue OCC Over Crypto Trust Bank Charters

• Community Banks sued the OCC over national trust bank charters for crypto firms, arguing the regulator exceeded its authority under the National Bank Act.
• The lawsuit challenges the OCC’s March 2026 rule and Protego’s charter.

The Independent Community Bankers of America (ICBA) has sued the U.S. Office of the Comptroller of the Currency (OCC) over its decision to allow cryptocurrency companies to obtain national trust bank charters.

The banking group filed the lawsuit on October 2 in the U.S. District Court for the District of Columbia. ICBA is challenging an OCC rule issued in March 2026, along with Interpretive Letter No. 1176, arguing that the regulator exceeded the authority granted to it under the National Bank Act.

The dispute centers on national trust banks that do not take traditional deposits but can provide services such as digital-asset custody and payment settlement. Unlike insured banks, these institutions are not subject to FDIC insurance requirements, and they do not operate under the same capital, liquidity and Community Reinvestment Act requirements that apply to insured depository institutions.

The OCC, however, said in its February 2026 final rule that it was clarifying the existing authority of national banks limited to trust-company operations to conduct non-fiduciary activities. The agency said the rule does not expand or reduce its statutory authority to charter national banks. The rule became effective on April 1.

ICBA Challenges Crypto Trust Bank Approvals

ICBA argues that the expanded use of national trust charters creates a regulatory difference between crypto firms and traditional community banks. The group said consumers could also assume that assets held with a federally chartered crypto trust company receive the same federal protections as deposits at an insured bank.

The lawsuit specifically asks the court to invalidate the OCC’s rule and related guidance. It also seeks to overturn the conditional approval of a national trust bank charter for Protego Holdings Corp., a digital-asset company.

The OCC has granted or conditionally approved several national trust bank applications involving digital-asset companies. In December 2025, the agency announced conditional approvals for firms including Ripple National Trust Bank, First National Digital Currency Bank, BitGo Bank & Trust, Fidelity Digital Assets and Paxos Trust Company.

The OCC declined to comment on the new lawsuit, according to Reuters.