ICBA Sues OCC Over Crypto Trust Bank Charters

The Independent Community Bankers of America sued the Office of the Comptroller of the Currency and Comptroller Jonathan Gould in federal court on Friday. The lawsuit, filed in the U.S. District Court for the District of Columbia, argues the OCC has far exceeded its statutory authority by approving trust bank charters for cryptocurrency companies, creating regulatory gaps and competitive harm to community banks. The case, titled Independent Community Bankers of America v. Office of the Comptroller of the Currency, No. 1:26-cv-03441, specifically challenges the OCC’s conditional approval of Protego Holdings’ national trust bank charter. ICBA is asking the court to find unlawful both an OCC rule adopted in March 2026 and an interpretive letter from 2021 that form the basis for these approvals.

OCC’s expanded trust charter authority under scrutiny

During President Donald Trump’s second term, the OCC has approved or conditionally approved 21 national trust bank charters. At least 13 of those involve cryptocurrency companies. The lawsuit asserts there is no statutory basis for the OCC’s position that it can charter crypto trust banks that are neither depository nor fiduciary. It targets the agency’s March 2026 final rule, which amended regulations to replace references to national trust banks being limited to 'fiduciary activities' with 'the operations of a trust company and activities related thereto'. The OCC stated this rule was intended to clarify its longstanding authority. The agency contends that the statutory language in Section 27(a) of the National Bank Act, added in 1978, is not limited to fiduciary powers. It emphasizes that Congress used 'trust company' in one section and 'fiduciary' elsewhere, and that these terms should not be treated as synonymous.

Impact on community banks and competitive concerns

ICBA argues that community banks are suffering direct financial harm. The trade group pointed to two small member banks, each under $2.5 billion in assets, that have each already lost hundreds of thousands of dollars in business this year alone to cryptocurrency companies with OCC-approved trust charters. Each of those banks spends about $1.5 million annually on regulatory requirements like Federal Deposit Insurance Corp. Assessments and Community Reinvestment Act compliance. Trust banks are not required to meet those same requirements. ICBA President and CEO Rebeca Romero Rainey said Congress did not create the national trust charter as a side door into the banking system. She said ICBA is asking the court to return the OCC to its statutory limits, arguing that any non-fiduciary firm seeking a federal bank charter should meet the same standards as community banks. ICBA contends the OCC has unlawfully created a fourth category of national bank: institutions that neither accept deposits nor exercise fiduciary powers but conduct extensive non-fiduciary financial activities.

Focus on Protego Holdings and broader crypto charter approvals

The lawsuit zeroed in on crypto company Protego Holdings, which received conditional approval for a charter in February. The complaint notes Protego counted collapsed crypto firm FTX among its investors and alleges it has a history of severe financial problems and appears to have insufficient capital. On Monday, contacts for Protego could not be immediately be reached and the company’s website was not working. Protego previously failed to satisfy OCC requirements, resulting in the expiration of an earlier conditional approval in 2023. According to the complaint, Protego’s proposed business includes a cryptocurrency custody platform, trading platform, and lending platform in a non-fiduciary capacity. The OCC’s broader crypto charter approvals under the Trump administration have included several other prominent firms.

Defending voices and regulatory context

The lawsuit contends the OCC has become dramatically more permissive in regulating crypto companies, aligning with Trump’s promise to make the U.S. The crypto capital of the world. It says the agency acted quickest of all in rescinding Biden-era guidance less than two months into Trump’s second term. Defending the chartering approach, OCC Comptroller Jonathan Gould has said the agency does not have a zero risk tolerance anymore. He stated the statute talks about a reasonable chance of success, which is how the OCC evaluates applications. Ji Hun Kim, CEO of the trade association Crypto Council for Innovation, said ICBA’s lawsuit is a clear attempt to resist national trust charters, payments innovation, and competition in financial services. Kim argued that restricting banking to legacy business models will not stop demand for financial innovation and that the OCC has appropriately adapted its oversight for over a century. An OCC spokesperson said on Monday the agency does not comment on litigation. The lawsuit seeks to rescind the OCC’s conditional approval of Protego Holdings’ national trust bank charter.