America's community banks have sued the Office of the Comptroller of the Currency, arguing the regulator exceeded its authority by granting national trust bank charters to crypto firms. The Independent Community Bankers of America wants a federal court to void a March 2026 rule and strike a conditional charter already issued to Protego Holdings.
The Independent Community Bankers of America filed suit Friday in the U.S. District Court for the District of Columbia against the OCC, challenging its authority to charter national trust banks for crypto companies. The complaint, brought under the Administrative Procedure Act, targets a March 2, 2026 final rule tied to the OCC's Interpretive Letter No. 1176 and asks the court to declare both unlawful.
A "side door" into banking
ICBA argues the OCC has stretched the national trust charter into what it calls a side door into the banking system for crypto firms. According to Decrypt, ICBA President and CEO Rebeca Romero Rainey said letting companies obtain such charters to conduct substantial non-fiduciary activities "exceeds the authority Congress granted the agency".
Rainey said these firms gain the credibility of a federal bank charter without Community Reinvestment Act duties, consolidated supervision, capital and liquidity standards, and FDIC insurance. ICBA also warned of a consumer-protection gap, since digital assets held at a crypto firm under a trust charter don't carry the federal protections customers expect from a chartered bank. The suit contends the charter preempts many state consumer-protection laws while regulating these entities more lightly than traditional banks.
Protego charter targeted directly
The complaint singles out Protego Holdings, whose conditional charter ICBA wants the court to vacate, citing the firm's governance and risk-control shortcomings.
Meanwhile, crypto firms including Circle, Ripple, Paxos, Fidelity, BitGo, Kraken's parent Payward, Jack Dorsey's Block, and the Trump-tied World Liberty Financial have pursued OCC charters, a wave the lawsuit now pushes back against. Sen. Elizabeth Warren has separately called the approvals illegal, a charge the industry has disputed.
Beyond this suit, the OCC is racing to finalize GENIUS Act stablecoin rules by November, adding another front to the clash over how deeply crypto should be woven into the federal banking system.
Source: Decrypt
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