Key Insights:
- The case directly challenges the OCC’s legal authority over national trust-bank charters.
- Protego’s conditional approval is one of the specific actions before the court.
- The dispute could influence future crypto banking applications and regulatory standards.
The Independent Community Bankers of America took action against the Office of the Comptroller of the Currency on Oct. 2. The case questions the use of national trust bank charters for cryptocurrency companies. Requests a federal court to examine the regulator’s power. This lawsuit may change the way digital-asset companies join the U.S. Banking system.
The lawsuit, submitted to the U.S. District Court for the District of Columbia focuses on the OCC’s rule from March 2026 Interpretive Letter No. 1176 And Protego Holdings’ charter approval. The banking group says the agency stretched a trust-bank system beyond the powers given by Congress. The OCC did not respond to the action.
ICBA challenges the OCC charter framework
ICBA says national trust banks should not offer a banking option for companies that do not handle deposits or mainly perform fiduciary roles. The group says the National Bank Act does not let the OCC use trust charters for firms that neither take deposits nor mainly perform functions.
The argument also goes back, to 2021, when the OCC released Interpretive Letter No. 1176.
That guidance concluded that national trust banks could conduct certain non-fiduciary activities when federal law separately authorized those activities. The OCC later proposed a broader framework in January 2026 and issued its final rule in March.
ICBA had opposed the proposal before filing the lawsuit. It now asks the court to declare the challenged rule and guidance unlawful. It also seeks to vacate Protego’s conditional charter approval.
Crypto firms expand their path into banking
The legal challenge follows a series of trust-bank approvals involving crypto and fintech companies. In February, the OCC approved charters for Stripe’s Bridge National Trust Bank, Protego’s National Digital Trust Company and Foris DAX National Trust Bank, the proposed U.S. banking subsidiary of Crypto.com.
The OCC’s national trust charters allow companies to manage customer assets and provide certain settlement services nationwide. However, the charters do not permit deposit-taking or conventional lending, which separates them from full-service commercial banks.
Other crypto companies have also pursued the structure. Those efforts include applications involving Payward, the parent company of Kraken, while banking groups have raised objections to several applications.
The framework has also drawn attention from lawmakers and larger banking organizations. Senator Elizabeth Warren questioned the OCC’s crypto trust-charter approvals in May, while the Bank Policy Institute reviewed a possible legal challenge to the agency’s approach, according to reports.
Regulatory differences drive the dispute
ICBA’s main worry is the different rules that trust banks and insured commercial banks must follow. Traditional banks must follow rules about capital and liquidity. They also must follow rules protecting consumers rules from the Community Reinvestment Act and rules about FDIC insurance.
National trust banks that do not take deposits usually do not have FDIC‑insured deposits. ICBA says that this difference could let crypto firms give services under a different regulatory framework, than community banks.
The group also raised consumer protection concerns. It argues that customers could associate a federal charter with protections that do not apply to uninsured digital-asset firms. Those concerns remain allegations in the lawsuit rather than findings by a court.
The case therefore places two regulatory approaches before the court.
- The OCC has expanded access to national trust charters for selected crypto and fintech businesses.
- The banking group argues that Congress did not authorize that broader pathway.
- The court must assess the agency’s interpretation of existing banking law.
Crypto charter fight enters federal court
The lawsuit could have implications for regulators in the future for charters in crypto and fintech. If the OCC loses, it will have to rethink its scheme, and if the agency wins, then its scheme will remain.
The disagreement also highlights a larger battle for digital-asset companies to gain access to the regulated financial system. Crypto companies have been pushing for greater regulatory clarity on custody, settlement and payments from the federal government and payment providers have asked whether they should be subject to less stringent rules.
ICBA itself has rejected offers from a number of firms, such as Block and ZeroHash. Its latest submissions reveal the charter saga is not limited to Protego and may impact more applicants.
Conclusion
The suit now takes the OCC’s national trust-bank system to a federal judge. The result may shed light on the scope that the agency can give crypto companies under current federal banking laws.
