Key Highlights
- The potential lawsuit is reportedly being discussed by the Bank Policy Institute (BPI), a lobbying group representing around 40 major lenders.
- The group is reviewing legal options after the regulator proceeded with its approach despite objections from banking organizations.
Some of the largest U.S. banks are exploring whether to challenge the Office of the Comptroller of the Currency (OCC) in court over changes that could allow crypto and fintech companies to secure national trust bank licenses more easily.
According to a report, the potential lawsuit is being discussed by the Bank Policy Institute (BPI), a lobbying group representing around 40 major lenders, including JPMorgan Chase, Goldman Sachs, and Citigroup.
According to people familiar with the discussions, the group is reviewing legal options after the regulator proceeded with its approach despite objections from banking organizations and state regulators. So far, the BPI has not yet decided whether it will file a lawsuit.
OCC expands access to trust bank charters
The discussion is centered around actions by the OCC, which oversees nationally chartered banks. Under its current interpretation of federal licensing rules, the agency has made it easier for financial technology and crypto companies to obtain a national trust bank charter. Firms with this license can operate across all U.S. states under federal supervision.
Banking groups argue that granting these charters to firms that are not structured like traditional banks could allow them to offer similar services while facing fewer regulatory requirements.
Industry warns of regulatory gaps
Bank lobby groups have repeatedly urged the OCC to reject several applications for trust bank licenses. Last year, the Bank Policy Institute asked the regulator to deny requests from companies including Circle, Ripple, and payments firm Wise.
In its earlier submissions, the BPI argued that allowing firms to deliver bank-like products under lighter regulatory frameworks could blur the legal definition of a bank and increase risks to the financial system.
State regulators and community banks raise concerns
Concerns about the licensing approach have also come from other regulatory and banking groups.
The Conference of State Bank Supervisors, which represents financial regulators from all 50 states, warned in a recent letter that approving crypto and payments companies outside traditional federal banking frameworks could weaken consumer protections and financial stability.
Similarly, the Independent Community Bankers of America, which represents thousands of smaller lenders, urged the OCC to revise or withdraw the proposals. The group said the licensing approach could create regulatory gaps and raise policy concerns for both consumers and the broader financial system.
Political scrutiny around crypto licenses
The licensing debate has also drawn attention in Washington after World Liberty Financial, a cryptocurrency venture linked to the Trump family, applied for a national trust bank charter earlier this year.
The application has added political attention to the OCC’s broader push to bring crypto and fintech companies into the federally regulated banking framework.
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