21 Trust Charters, 13 Crypto Firms, One Lawsuit: Community Bankers Just Asked a Judge to Close the OCC's Charter Door

21 Charters Meet a Challenge to the Rules

Twenty-one trust charters, at least 13 crypto firms, one lawsuit: on October 2, 2026, community bankers took the OCC to the U.S. District Court for the District of Columbia. The dispute asks whether crypto businesses qualify for federal bank charters, putting banking law ahead of Bitcoin’s price.

The Independent Community Bankers of America represents community banks. Its announcement identifies an Administrative Procedure Act challenge. President and CEO Rebeca Romero Rainey said: “ICBA is asking the court to return the OCC to its statutory limits.”

A national trust charter permits limited banking operations without necessarily taking deposits. This case challenges the legal foundation supporting those charters, extending well beyond August’s individual World Liberty Financial approval.

Three Actions ICBA Wants Undone

ICBA seeks to invalidate and vacate the March 2, 2026 final rule, January 2021’s Interpretive Letter No. 1176, and Protego Holdings Corp.’s February 2026 conditional approval. It also requests an injunction barring further approvals or conditional approvals under either policy.

The rule took effect April 1. It replaced “fiduciary activities” with “the operations of a trust company and activities related thereto,” as CryptoSlate explains. That wording is the dispute’s fulcrum: does it recognize existing powers or create authority Congress never granted?

Jonathan Gould wrote the interpretive letter during the first Trump administration as OCC senior deputy comptroller and chief counsel, according to BeInCrypto’s account.

The National Bank Act Argument

ICBA reads the National Bank Act as authorizing three categories: deposit-taking banks conducting banking business; bankers’ banks serving other depository institutions; and trust banks exercising fiduciary powers under 12 U.S.C. §92a. Its argument excludes a fourth category of institutions conducting neither deposit-taking nor fiduciary business.

The OCC relies on Congress’s 1978 amendment to §27(a). ICBA says that provision merely protects a national bank from being deemed illegally constituted because its operations are restricted to trust-company activities. On that reading, permission to restrict a bank’s operations does not independently authorize nondepository, nonfiduciary charters.

The association cites a 1979 Third Circuit decision as support. AlphaPilot summarizes this statutory argument, which appears in the filed complaint.

ICBA also says the OCC had never chartered a national bank doing neither deposit-taking nor fiduciary work before this wave. These are the plaintiff’s legal and historical contentions, not findings by the court.

Three APA Counts, Several Routes to Defeat

The complaint’s three APA counts target the rule, the interpretive letter and Protego’s approval. Across them, ICBA advances distinct objections: exceeding statutory authority, arbitrary and capricious decision-making, and failure to use notice and comment.

The association says the OCC devoted just two pages to answering comments on the rule without substantively addressing significant risks and objections. It also argues that the 2021 letter required public notice and an opportunity to comment.

The major questions doctrine supplies another argument: authority with such broad economic consequences requires clear congressional authorization. These claims challenge both what the OCC may authorize and how it reached its decisions.

The OCC’s Answer: Custody Has Never Been Only Fiduciary

The OCC maintains that the wording leaves its chartering authority unchanged. National trust banks have long conducted some nonfiduciary business, including custody; the agency cites 12 U.S.C. 24(Seventh) for nonfiduciary custody and related activities.

Comptroller Jonathan Gould argues that custody and safekeeping have operated electronically for decades. “There is simply no justification for considering digital assets differently,” he said, as reported by American Banker.

The OCC itself cited Loper Bright in the rule. That Supreme Court decision ended Chevron deference: a court hearing a properly brought statutory challenge must exercise independent judgment about the National Bank Act’s meaning. Neither the agency’s interpretation nor ICBA’s opposing reading settles the question. The OCC declined to comment on this lawsuit.

Why the Charter Fight Reaches US Holders

Nondepository national trust banks lack FDIC deposit insurance. They are not treated as banks under the Bank Holding Company Act, so the Federal Reserve cannot supervise their parents through the traditional bank-holding-company framework. ICBA also objects to differences in Community Reinvestment Act obligations, consolidated supervision, and capital and liquidity standards compared with insured banks.

ICBA says federal charters preempt many state regulations, including consumer-protection laws. It also points to nearly a century without an OCC-managed uninsured-bank receivership. For customers, the dispute concerns which protections accompany the federal charter.

The approval timeline shows the commercial stakes. As covered by CryptoSlate and AlphaPilot:

• December 2025: Circle’s First National Digital Currency Bank, Ripple National Trust Bank, BitGo Bank & Trust, Fidelity Digital Assets and Paxos Trust Company. Circle received final approval in July 2026.
• February 2026: Stripe’s Bridge, Crypto.com’s Foris DAX and Protego.
• April 2 and May 29: Coinbase and Nomura’s Laser Digital, respectively.
• August: Trump-family-linked World Liberty Trust Company.
• September 18: Agora, Catena Labs and Bastion.

Many decisions were conditional or preliminary. Separately, blockchain-focused OpenReserve Bank received preliminary approval in September 2026; Erebor received conditional approval in October 2025. This broader chronology is not a reconstruction of the complaint’s 21-charter count.

Gould reported roughly 40 de novo applications over 18 months, including 23 involving digital assets. Pending applicants include zerohash National Trust Bank, Dakota National Trust Bank, Payward (Kraken) National Trust Company, Lorum National Trust Bank, EDX Trust and PAYO Digital Bank.

The GENIUS Act, signed into law July 18, 2025, makes trust charters a route to federal qualified payment stablecoin issuer status. The state route carries a $10 billion outstanding-stablecoin threshold, above which issuers must transition to federal supervision. ICBA argues the act has not yet taken effect and cannot cure earlier charter defects. Enactment and effectiveness are separate events.

Duke’s Lee Reiners argued in May that the rule permits substantial nonfiduciary crypto business inside uninsured trust banks while avoiding the traditional-bank regulatory framework, as American Banker reports.

Why Protego Is Named—and the Others Are Not

The OCC’s Corporate Decision 1366 documents Protego’s preliminary conditional approval. Its proposed business covers digital-asset custody, trading, lending and issuance.

ICBA alleges deficient risk controls and governance without independent oversight. Its release says Protego laid off most staff in 2023 and faced judgments arising from unpaid vendor bills. The association says the OCC failed to address concerns about those risks, banking-commerce separation, unequal competition and consumer harm.

Protego is the individual approval the complaint seeks to vacate. The suit does not request cancellation of every existing crypto trust charter. Its proposed injunction targets future approvals relying on the two challenged policies, not every crypto applicant regardless of legal basis.

Existing charters’ treatment will turn on the eventual order, including distinctions between final and conditional approvals and activities supported by independent statutory authority. Filing the complaint has not resolved those questions.

A Banking-System Decision Beyond the Price Tape

Bitcoin traded around $84,600 in CryptoSlate’s October 2 coverage. MEXC, citing Kraken daily data, puts that session’s high at $87,229 and close near $84,494. It also cites The Block’s data showing a nine-session, roughly $3 billion US spot Bitcoin ETF inflow streak ending October 1 with about $149 million in net outflows.

The structural stakes outlast that session. An OCC victory would reinforce this federal route for crypto firms. An ICBA victory would constrain the challenged chartering authority and future approvals that depend on it. The decisive question is how much nonfiduciary business Congress authorized inside a national trust bank.