An association representing community banks has initiated legal action against a United States banking regulator, asserting that its choice to let digital asset businesses secure limited national trust bank licenses goes beyond the powers provided to the agency by Congress.
The Independent Community Bankers of America, known as the ICBA, submitted the legal complaint on Friday within the US District Court for the District of Columbia.
The organization argued that the Office of the Comptroller of the Currency, or OCC, has given cryptocurrency businesses the legitimacy associated with a US banking license while failing to enforce adequate protections or adhere to standard banking regulations.
Rebeca Romero Rainey, president and CEO of the ICBA, stated in a press release that the OCC’s choice to permit businesses to secure national trust bank licenses for extensive non-fiduciary operations surpasses the authority given to the organization by Congress. She noted that lawmakers did not establish the national trust license as a backdoor entrance into the financial network for digital asset enterprises wanting the validation of a federal banking license while avoiding Community Reinvestment Act mandates, unified oversight, liquidity and capital benchmarks, and FDIC protection that govern traditional insured financial institutions.
Rainey further mentioned that the ICBA is petitioning the judiciary to force the OCC back within its lawful boundaries.
Requests for a response regarding the legal action were sent to the OCC, though no statement had been provided prior to press time.
As previously documented in August, under the administration of President Donald Trump and agency leader Jonathan Gould, the OCC has granted full or conditional green lights to various requests from cryptocurrency entities hoping to utilize trust licenses to broaden their domestic offerings.
Even so, these trust bank licenses do not grant entities the ability to take in customer deposits or issue loans, setting them apart from traditional commercial lenders, according to prior reporting.
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Originally published at https://cointelegraph.com/news/community-banks-sue-occ-over-trust-bank-charters-of-crypto-firms?utm_source=rss_feed&utm_medium=rss&utm_campaign=rss_partner_inbound.
