The Independent Community Bankers of America sued the Office of the Comptroller of the Currency and Comptroller Jonathan Gould Friday in U.S. District Court for the District of Columbia, contending the agency has "far exceeded" its statutory authority with its recent trust bank charter approvals. The lawsuit, filed under the Administrative Procedure Act, argues the OCC's current approach introduces risk to the financial system and consumers. "This vast expansion of power creates a gaping hole in financial regulation," the trade group asserts.
ICBA is asking the court to find unlawful both an OCC rule adopted in March and an interpretive letter issued by Gould in 2021, and to rescind the charter approval for cryptocurrency company Protego Holdings Corp. During President Donald Trump's second term, the OCC has approved or conditionally approved 21 national trust bank charters, with 13 of those for crypto companies, according to the lawsuit. ICBA pointed to two small community bank members under $2.5 billion in assets that each spend about $1.5 million annually on regulatory requirements, including FDIC assessments and Community Reinvestment Act compliance, which trust banks aren't required to do.
The trade group argues the national trust bank designation allows companies to preempt many state law requirements and avoid federal requirements for depository institutions, putting community banks at a "severe competitive disadvantage." ICBA President and CEO Rebeca Romero Rainey said Congress didn't create the national trust charter "as a side door into the banking system." The lawsuit also zeroed in on Protego, which received conditional approval in February and counted collapsed crypto firm FTX among its investors, alleging the company has "a history of severe financial problems" and "appears to have insufficient capital and liquidity support."
What remains unknown is how the court will weigh the OCC's statutory interpretation against the trade group's claims, and whether the agency's conditional trust charter approvals will be paused or rescinded pending review. An OCC spokesperson said the agency doesn't comment on litigation, and contacts for Protego couldn't immediately be reached for comment. The Crypto Council for Innovation defended the OCC's approach, with CEO Ji Hun Kim calling the lawsuit "a clear attempt to resist national trust charters, payments innovation, and competition in financial services."