Opinion. On October 2, the Independent Community Bankers of America sued the Office of the Comptroller of the Currency in federal court in Washington. The suit asks a judge to throw out the OCC’s March 2 chartering rule and Interpretive Letter 1176, to cancel Protego’s conditional trust-bank approval, and to block the agency from using either document to approve any more charters. ICBA says the OCC has approved or conditionally approved 21 national trust banks under this administration, and that at least 13 of them are crypto companies.
Read the press release and you get consumer protection and systemic risk. Read the complaint and you get something more honest. Paragraph after paragraph is about competition. Two anonymous member banks, each with less than $2.5 billion in assets, say they spend more than $1.5 million a year on compliance that crypto trust banks skip, and that they’ve already lost “hundreds of thousands of dollars” in business this year to firms with conditional OCC approval. That’s a real grievance. It’s also the oldest story in banking: whoever holds the license wants the next applicant held to a higher bar, or kept out.
Give the bankers their due, because some of their points are strong. A national trust bank doesn’t carry FDIC insurance. It isn’t supervised like a bank holding company. And it can preempt a lot of state consumer law. The complaint also notes that the OCC hasn’t run an uninsured bank receivership in nearly a hundred years. If one of these new charters fails in a crypto crash, nobody has recently tested what happens next. Customers who see “national bank” on the door may assume protections that aren’t there. Those are fair questions, and the OCC’s two-page response to comments, as ICBA describes it, didn’t answer many of them.
Here’s what they aren’t putting in the headline. The legal weapon is the major questions doctrine, the same conservative tool used to rein in agencies that claim sweeping powers Congress never granted. This time it’s pointed at a Trump-era OCC, and at an interpretive letter written by Jonathan Gould before he became Comptroller. ICBA also leans on the GENIUS Act, arguing that because Congress has now legislated on stablecoins, it meant to keep the bigger crypto-banking question for itself. Speculation, labeled: that line of argument would let incumbents treat every unfinished bill as a reason to freeze agency action in the meantime.
Keep the scope straight, too. Ripple, Circle, and the other December 2025 conditional approvals aren’t named as targets for vacatur. Protego is the only charter the suit asks the court to cancel outright. Filing a complaint revokes nothing, and the OCC has declined to comment on the litigation. But the relief ICBA wants, an order stopping the OCC from using the rule or IL 1176 to approve future charters, would close the path for whoever comes next, however clean their books are.
Hardwire’s read: be skeptical of the regulator that redefined a 1978 sentence into a national on-ramp, and be skeptical of the trade group that wants a judge to slam that ramp shut at the exact moment its members started losing customers. If crypto firms want bank-grade credibility, they should accept bank-grade scrutiny. If community banks want to keep their customers, they’ll need a better product, not just a better lawyer.
Sources: ICBA complaint; ICBA release; CoinDesk; American Banker; OCC