A major trade group representing U.S. community banks has taken legal action against the Office of the Comptroller of the Currency, arguing that the agency has improperly expanded access to national trust bank charters for cryptocurrency firms. The Independent Community Bankers of America filed the complaint on October 2, 2026, in the U.S. District Court for the District of Columbia under the Administrative Procedure Act.

The lawsuit targets a final rule issued by the OCC on March 2, 2026, along with related guidance tied to Interpretive Letter No. 1176. ICBA contends that these measures grant the agency authority beyond what Congress authorized in the National Bank Act, enabling crypto companies to secure the credibility of a federal bank charter while avoiding key requirements that apply to insured depository institutions.

Core Arguments in the Legal Challenge

National trust bank charters traditionally permit institutions to hold and manage customer assets, provide custody services, and handle certain transactions. Holders of these limited charters cannot accept cash deposits or make loans. ICBA argues that the OCC’s approach allows crypto firms to conduct substantial non-fiduciary activities under this framework, effectively creating a pathway into the banking system that bypasses stricter standards.

The group further stated that American consumers reasonably expect federally chartered banks to provide federal protections, which digital assets held at crypto firms operating under these trust charters do not carry. ICBA is asking the court to declare the final rule and the interpretive letter unlawful and to restore the OCC to its statutory limits. The complaint also seeks to vacate a conditional approval granted earlier to at least one digital-asset firm.

Unlike traditional community banks, non-deposit-taking national trust banks fall outside much of the federal financial regulatory framework. The charter can also preempt certain state consumer protection laws, according to the filing. ICBA maintains this creates an uneven competitive environment in which crypto entities can offer similar services without the same compliance costs or safeguards.

OCC Position and Recent Chartering Activity

The OCC has described its March rule as a clarification of longstanding authority rather than an expansion or contraction of its powers. The agency stated that national banks limited to the operations of trust companies and related activities may engage in non-fiduciary functions in addition to fiduciary ones. Officials noted that the OCC has supervised national trust banks for years, many of which already perform custody and safekeeping work alongside traditional trust services.

Recent data illustrate the volume of interest. The OCC has received roughly 40 applications for new bank charters over an 18-month period, with 23 involving digital assets—far higher than in prior years. Since late 2025, the agency has granted or conditionally approved multiple national trust charters to crypto and fintech firms, including entities linked to major industry players seeking to custody digital assets or support stablecoin-related operations.

An OCC spokesperson declined to comment on the litigation. The agency has maintained that its actions align with the National Bank Act and address potential confusion in earlier regulatory text.

Broader Context and Industry Reactions

Concerns over the chartering approach predated the lawsuit. In May 2026, ICBA opposed a specific application from a major crypto firm’s parent company. Senator Elizabeth Warren also wrote to the Comptroller that month, questioning the approval of at least nine national trust charters for crypto companies since December 2025 and whether certain activities properly fell within the scope of a trust company.

The Bank Policy Institute, representing larger banks, responded to the ICBA suit by stressing that novel entities should face the same rules and responsibilities as other chartered institutions engaged in comparable activities. Companies seeking trust charters should limit operations to genuine trust functions, the group said; those pursuing traditional banking activities should apply for full-service charters.

Community banks have long expressed worry that lighter regulatory treatment for crypto firms could draw deposits and business away from traditional institutions that operate under more comprehensive oversight. The legal challenge centers on statutory interpretation rather than the merits of individual applications, focusing instead on whether the OCC possesses the power to authorize the broader range of activities now being pursued under trust charters.

The case is expected to test the boundaries of federal banking authority as digital asset firms continue to seek clearer pathways into the regulated financial system. Courts will determine whether the OCC’s interpretive approach and final rule remain within the limits set by Congress.