Key facts
- Community banks are suing the Office of the Comptroller of the Currency over crypto firm charters.
- The Independent Community Bankers of America filed the suit, arguing the OCC exceeded its regulatory authority.
- The group claims granting charters to crypto firms provides legitimacy without sufficient safeguards.
- The lawsuit seeks to revoke a recent rule and guidance that facilitate crypto firms applying for national trust bank charters.
A trade organization representing community banks has filed a lawsuit against a US bank regulator, claiming its decision to grant limited bank charters to firms focused on cryptocurrency products exceeds its regulatory authority. The Independent Community Bankers of America (ICBA) filed the suit in the US District Court for the District of Columbia on Friday.
The ICBA argues that the Office of the Comptroller of the Currency (OCC) must revoke a recent rule and related guidance that smooths the path for crypto firms to apply for national trust bank charters. The group contends that granting such charters to crypto firms lends them legitimacy without adequate safeguards.
Separately, the Bank Policy Institute, whose board includes CEOs from major banks like JPMorgan Chase, Goldman Sachs, and Bank of America, has been discussing potential legal action against the OCC over similar charter approvals for crypto and fintech firms. These banks reportedly feel their warnings to the regulator about blurring the lines between traditional banks and crypto firms have gone unanswered. They argue that the OCC's interpretation of federal licensing rules allows crypto and payments companies to obtain national charters without facing the same capital and compliance requirements as traditional banks, creating uneven regulatory treatment.