The community banks' lobby sues the OCC over its crypto trust charters, and asks the court to undo Protego's

The Independent Community Bankers of America sued the Office of the Comptroller of the Currency and Jonathan Gould, the comptroller, in the US District Court for the District of Columbia on 2 October, asking the court to declare unlawful and vacate the agency's National Bank Chartering rule of 2 March 2026 and Interpretive Letter 1176, the January 2021 letter on which the rule builds. The complaint, case 1:26-cv-03441, says the two let the OCC charter national trust banks that neither take deposits nor work chiefly as fiduciaries, a power the trade group says the National Bank Act does not give. On its reading the agency may charter only three kinds of national bank: deposit-taking banks, bankers' banks and trust banks that provide fiduciary services. It wants an injunction barring the OCC from using the rule to grant or conditionally approve any charter, and it asks the court to vacate the conditional approval the OCC gave Protego Holdings in February.

Protego is the test case. According to the complaint, the OCC's approval letter has it running custody, trading, lending and issuer services platforms in a non-fiduciary capacity. An earlier conditional approval, from 2021, expired in 2023 without the bank opening, and the complaint recites the layoffs, unpaid vendors and default judgments that followed. More broadly it counts 21 trust banks approved or conditionally approved under the Trump administration, at least 13 of them crypto companies, and notes that the OCC "has not managed an uninsured bank receivership in nearly one hundred years". The ICBA, which speaks mostly for smaller lenders, says the charters let crypto firms compete with its members without deposit insurance, Community Reinvestment Act obligations, consolidated supervision or capital and liquidity standards. "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," said Rebeca Romero Rainey, its chief executive.

The suit reaches into stablecoins. The GENIUS Act names uninsured national banks chartered by the OCC as one of three kinds of entity that can become a federal qualified payment stablecoin issuer, a point the complaint itself sets out, and American Banker noted that state-qualified issuers are capped at $10bn of coins outstanding, which makes a national trust charter the easier path for an issuer that wants scale. Coinbase, Circle, Crypto.com and World Liberty Financial are among the crypto firms the OCC has approved, conditionally or otherwise, for trust charters. The complaint counters that the GENIUS Act does not take effect until 18 January 2027, or 120 days after final regulations if that comes sooner, and so cannot cure the charters already granted. The OCC's own final GENIUS rule has been with the White House's Office of Information and Regulatory Affairs since 27 August. American Banker also reported that Interpretive Letter 1176 was written by Gould when he was the OCC's chief counsel.

The OCC told CoinDesk and American Banker that it does not comment on litigation. Brought under the Administrative Procedure Act, the case turns on whether a 1978 amendment saying a national bank is not illegally constituted solely because the comptroller has limited it to trust business can carry charters for firms whose main business is not fiduciary at all. The complaint names only Protego's approval for vacatur; it does not ask the court to undo the charters already granted to Coinbase, Circle or the others, though the injunction it seeks would stop the OCC using the rule to approve any more. Larger banks are not party to it. The Bank Policy Institute said in a statement to CoinDesk that firms that want to engage in traditional banking "should seek full-service banking charters", and that trust charters should go only to firms confined to trust activities.