ICBA Takes OCC To Court Over ‘Side Door’ Into Banking System
By CU Today Staff —
WASHINGTON — The Independent Community Bankers of America has sued the Office of the Comptroller of the Currency, challenging the agency's authority to grant national trust bank charters to cryptocurrency firms that ICBA argues can conduct substantial non-fiduciary activities without facing the regulatory requirements imposed on traditional banks.
"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," ICBA President and CEO Rebeca Romero Rainey said. "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 without the Community Reinvestment Act obligations, consolidated supervision, capital and liquidity standards, and FDIC insurance that apply to insured depository institutions.
"American consumers reasonably expect a federally chartered bank to carry federal protections," continued Romero Rainey. "Digital assets held at a crypto firm operating under a national trust charter do not carry those important safeguards. ICBA is asking the court to return the OCC to its statutory limits. Any non-fiduciary firm seeking the benefits of a federal bank charter should meet the same standards as community banks."
The lawsuit, filed Thursday in U.S. District Court for the District of Columbia under the Administrative Procedure Act, challenges the OCC's March 2 final rule related to Interpretive Letter No. 1176 and asks the court to declare both unlawful. ICBA also is asking the court to vacate the OCC's February conditional approval of a national trust bank charter for Protego Holdings Corp., a digital-asset company that provides custody, trading, lending and issuance services. ICBA contends the OCC has exceeded its authority under the National Bank Act by allowing national trust banks that neither take deposits nor engage primarily in fiduciary activities.
Originally reported by CU Today.