Community banks sue OCC over trust bank charters of crypto firms

Community banking group’s lawsuit claims OCC has overstepped its mandate from Congress. A community banks group sued a US bank regulator, claiming its decision to allow cryptocurrency companies to obtain limited national trust bank charters exceeds the authority Congress granted the agency. The Independent Community Bankers of America (ICBA) >filed the suit Friday in the US District ​Court for the District of Columbia. The group claimed the Office ​of the Comptroller of the Currency (OCC) has granted cryptocurrency firms the credibility of a US bank charter without sufficient safeguards or compliance with normal bank requirements. “The OCC’s decision to allow companies to obtain national trust bank charters to conduct substantial non-fiduciary activities exceeds the authority Congress granted the agency,” ICBA president and CEO Rebeca Romero Rainey said in a >statement. “Congress did not create the national trust charter as a side door into the banking system for crypto firms seeking the credibility of a federal bank charter without the Community Reinvestment Act obligations, consolidated supervision, capital and liquidity standards, and FDIC insurance that apply to insured depository institutions.” The ICBA ​is asking the court to return the OCC to its statutory limits, Rainey added. The OCC was asked for comment on the lawsuit but had not replied by the time of publication. Cointelegraph reported in August that under President Donald Trump and OCC head Jonathan Gould, the agency has approved or conditionally approved multiple applications from crypto companies seeking trust charters to expand their services in the US. Still, the trust bank charters do not allow companies to accept deposits or make loans, distinguishing them from conventional commercial banks, Cointelegraph reported. Magazine: Exchanges reporting crypto gains to IRS becomes tax nightmare