Launching the License Defense Battle, U.S. Banking Industry Plans to Sue OCC
- Core Viewpoint: The U.S. banking industry is preparing to file a lawsuit against the Office of the Comptroller of the Currency (OCC) to block it from granting federal trust bank charters to crypto and fintech companies. This regulatory conflict over financial access rights could escalate into a major legal confrontation.
- Key Elements:
- Since December 2025, the OCC has conditionally approved trust charters for multiple crypto companies including Circle and Ripple, and has received applications from 11 companies, including Morgan Stanley, sparking strong opposition from the traditional banking sector.
- An opposition coalition led by the Bank Policy Institute (BPI) argues that the OCC, through its 2021 Interpretive Letter 1176 and rule amendments, improperly expanded the business scope of trust charters by bypassing statutory procedures, constituting regulatory arbitrage.
- The legal dispute centers on whether the OCC violated the Administrative Procedure Act by substantially altering charter issuance standards without undergoing a formal rulemaking process, which may become the primary point of attack in the lawsuit.
- OCC Comptroller Jonathan Gould argues that its actions are within its legal authority and that activities such as stablecoin reserve management fall within permissible non-credit activities.
- The underlying struggle concerns who can enter the U.S. financial system and under what standards, with the crypto industry seeking a unified federal compliance identity while traditional banks fear unfair competition.
Original Author: ChandlerZ, Foresight News
According to a March 9 report by The Guardian, the Bank Policy Institute (BPI), an industry group representing 40 major U.S. banks including JPMorgan Chase, Goldman Sachs, and Citigroup, is seriously considering suing the Office of the Comptroller of the Currency (OCC) to prevent it from granting national bank trust charters to cryptocurrency companies and fintech startups. If the lawsuit proceeds, the conflict between traditional banking and the crypto industry over financial access will officially escalate into a legal battle.
83 Days, 11 Companies, A Race for Charters
The catalyst for this event can be traced back to December 2025. That month, the OCC conditionally approved trust bank charters for five crypto-native companies in a single batch, including Circle, Ripple, BitGo, Paxos, and Fidelity Digital Assets. This marked the first time a federal regulator had issued such charters to crypto companies in bulk.
An application surge quickly followed. According to FinTech Weekly statistics, 11 companies submitted applications for trust bank charters within 83 days. The list included crypto and fintech firms like Crypto.com, Bridge (Stripe's stablecoin subsidiary), and Zerohash, as well as traditional financial giants like Morgan Stanley. In February 2026, Crypto.com received conditional approval, just about four months after submitting its application.
More controversially, World Liberty Financial, a crypto firm linked to the Trump family, also submitted a similar charter application in January of this year, planning to establish World Liberty Trust Company to directly issue its USD1 stablecoin. Senator Elizabeth Warren had pressured the OCC to suspend approval of this application due to concerns about foreign ownership and conflicts of interest, but was refused by OCC Acting Comptroller Jonathan Gould.
The Opposition Camp Continues to Grow
BPI is not the only voice of opposition. Currently, a multi-layered coalition has formed against this OCC policy.
The Conference of State Bank Supervisors (CSBS), representing regulators from all 50 states, has taken a hardline stance. Its Chairman, Brandon Milhorn, publicly stated that the OCC is "stitching together a Frankenstein charter," transforming a narrowly defined charter intended for fiduciary management into a backdoor to full-scale banking. He also explicitly mentioned that "litigation is certainly a possibility," and that states would consider administrative and legal action if the OCC's charter expansion exceeded the boundaries of the National Bank Act.
The Independent Community Bankers of America (ICBA), representing 5,000 community banks, also expressed strong opposition, arguing that these new charter holders would compete directly with traditional banks under a more lenient regulatory framework, creating an unfair market environment.
The American Bankers Association (ABA) directly requested the OCC to pause the approval process.
BPI CEO Greg Baer argued that trust banks are not required to meet the same regulatory and capital standards as federally insured full-service banks, and that the trust charters approved by the OCC have far exceeded the legal and historical purposes of a trust bank charter.
The Legal Controversy's Core: An Interpretive Letter
The legal heart of this conflict points to Interpretive Letter 1176 issued by the OCC in 2021. This letter redefined the scope of business for trust banks, effectively lowering the threshold for crypto companies and fintech firms to obtain such charters.
It is worth noting that the drafter of this letter was Jonathan Gould, then the OCC's Chief Counsel, who now, as Acting Comptroller, is responsible for enforcing this rule. On February 27, 2026, the OCC further submitted a rule revision, changing the wording in the charter provisions from "fiduciary activities" to "trust company operations and related activities." This revision is set to take effect on April 1. Critics believe this wording change will further blur the business boundaries of trust banks.
The legal argument of BPI and other institutions centers on the claim that the OCC has substantively changed charter rules through the interpretive letter and wording revision, bypassing the formal rulemaking process required by the Administrative Procedure Act (APA), including public comment periods. If litigation commences, this procedural flaw will be a primary line of attack for the plaintiffs.
Gould, for his part, has argued that trust companies have long provided both fiduciary and non-fiduciary custodial services, that stablecoin reserves constitute a narrow, segregated, non-credit-creating business, and that the law requires the OCC Comptroller to approve all applicants who meet statutory conditions, regardless of the technology they use.
Behind the Charter Battle: Who Gets to Enter the U.S. Financial System?
On the surface, this controversy is about the approval standards for a single charter. At a deeper level, the core issue being contested is who has the right to enter the U.S. financial system, and by what standards.
Traditional banking is concerned about regulatory arbitrage, where crypto companies and fintech firms can operate nationwide across all 50 states through a single trust charter, offering payment, custody, and stablecoin issuance services without bearing the same capital requirements, consumer protection obligations, and deposit insurance costs as full-service banks.
The logic from the crypto industry side is equally clear: obtaining a unified compliant identity at the federal level is a crucial step towards mainstream adoption. If the OCC's charter pathway is closed, crypto companies would once again face the high compliance costs of applying state-by-state and a fragmented regulatory landscape.
Currently, BPI has not formally filed a lawsuit, but according to informed sources, its legal team is already preparing. The CSBS has also kept the litigation option open. If one or both parties take action in the coming months, it would become the most significant legal confrontation in U.S. banking regulation since the CSBS sued the OCC in 2020 to block fintech charters.
The OCC's response window, the rule revision set to take effect on April 1, and the subsequent handling of controversial applications like that of World Liberty Financial will be the most critical points to watch next.
