US community bank organization sues OCC for crypto company trust banking license
A community bank organization has sued a U.S. banking regulatory agency, claiming that its decision to allow cryptocurrency companies to obtain national trust bank licenses for limited purposes exceeds the authority granted to the agency by Congress.
The Independent Community Bankers of America ( ICBA ) filed a lawsuit in the Federal District Court of the District of Columbia on Friday.
The organization stated that the Federal Reserve (OCC) has granted credibility to cryptocurrency companies by issuing bank licenses in the United States without adequate safeguards and in violation of regular banking requirements.
ICBA President and CEO Rebeca Romero Rainey stated in a statement: "The decision by OCC to allow companies to obtain national trust bank licenses and engage in a large number of non-trusted activities exceeds the authority granted to that institution by Congress."
She said, "The establishment of a national trust license by Congress is not intended to create a backdoor for crypto companies to enter the banking system, allowing them to obtain the credibility of a federal bank license without having to comply with the Community Reinvestment Act obligations, consolidated supervision, capital and liquidity standards, or the FDIC insurance requirements applicable to deposit-taking institutions."
Rainey added that ICBA is requesting the court to have OCC return to within the scope of their legal authority.
As of press time, OCC has not responded to requests for comments regarding this lawsuit.
Cointelegraph reported in August of this year that during the tenure of President Donald Trump and the head of OCC, Jonathan Gould, the agency has approved or conditionally approved trust license applications from several crypto companies to expand their services in the United States.
However, Cointelegraph reports that such trust bank licenses do not allow companies to accept deposits or issue loans, which distinguishes them from traditional commercial banks.
