Community bankers sue to vacate OCC trust-bank rule

The Independent Community Bankers of America filed suit against the Office of the Comptroller of the Currency in federal court in Washington on Oct. 2 seeking to vacate the OCC’s national trust bank rule and Interpretive Letter 1176. The complaint asks for declaratory and injunctive relief and contends the agency exceeded its authority by widening limited-purpose trust charters to fintech and cryptocurrency firms.

ICBA says the OCC has approved or conditionally approved 21 national trust banks in recent months, 13 of them linked to crypto businesses. The OCC finalized the national trust bank rule in February, effective April 1, replacing the statutory phrase “fiduciary activities” with the broader wording “the operations of a trust company and activities related thereto.” The complaint argues that change permits a wider range of services under trust charters.

The complaint identifies approvals or conditional approvals for firms including BitGo, Fidelity Digital Assets, First National Digital Currency Bank, Paxos, applicants linked to Ripple, Bridge, Foris DAX (parent of Crypto.com), Coinbase, Laser Digital, and the Sept. 18 approvals of Agora National Trust Bank, Catena Trust Bank and Bastion Platforms. The OCC notes some approvals are conditional or preliminary and that permitted activities vary by each bank’s business plan.

The central legal question is which activities a national trust bank may lawfully perform. The complaint draws a distinction between clear fiduciary custody and services ICBA describes as nonfiduciary: custody outside a fiduciary role, stablecoin issuance and reserve management, payments, settlement, conversion and execution. ICBA argues those services fall outside the limited-purpose trust charter and beyond the OCC’s authority.

In its final rule the OCC cited the Supreme Court’s Loper Bright decision and said courts must exercise independent judgment when a party with standing disputes whether the National Bank Act authorizes a national trust bank charter. The agency has indicated a court ultimately will decide the scope of its chartering authority as applied to these trusts.

Approved business plans differ. Coinbase’s plan centers on digital-asset custody as a fiduciary and transactional services tied to custodied assets. Agora’s business plan includes dollar-backed stablecoin issuance, reserve maintenance, nonfiduciary custody and payments and settlement. Catena’s plan combines custody, investment management and trust services with conversion, clearing and execution. Bastion plans white-label stablecoin issuance, custodial wallets, conversion and issuer services. Foris DAX pairs custody with trade settlement and staking; Bridge’s approval covers custody, stablecoin issuance and reserve management.

Comptroller Jonathan Gould reported the OCC received about 40 de novo charter applications over roughly 18 months, with 23 involving digital assets. The agency’s licensing page lists additional pending applicants including zerohash, Dakota National Trust Bank, Payward (Kraken), Lorum National Trust Bank, EDX Trust and PAYO Digital Bank.

Market analyses cited in filings and public statements include projections for institutional crypto custody and stablecoin infrastructure: JPMorgan projects $500 billion by 2028, Coinbase projects $1.2 trillion by the end of 2028, Standard Chartered projects $2 trillion by 2028, and Citi’s scenarios range from $1.9 trillion to $4 trillion by 2030.

The ICBA complaint moves the licensing dispute into federal court. The suit asks a judge to vacate the rule and Interpretive Letter 1176 and to bar the OCC from applying them to trust charters.