The Independent Community Bankers of America (ICBA) filed a lawsuit against the Office of the Comptroller of the Currency (OCC) in the U.S. District Court for the District of Columbia on Friday, challenging the regulator’s authority to grant national trust bank charters to cryptocurrency companies. The complaint argues the agency is letting digital asset firms into the banking system without the safeguards that community banks are required to meet, putting smaller lenders at a competitive disadvantage and creating what the trade group calls a “gaping hole in financial regulation.”
The Legal Challenge
Brought under the Administrative Procedure Act, the suit centers on the OCC’s March 2, 2026 final rule tied to Interpretive Letter No. 1176. ICBA is asking the court to declare both the rule and the letter unlawful, arguing the agency “has far exceeded its limited statutory authority to charter trust banks that perform fiduciary activities.” The group contends the rule lets entities engaged in “highly risky cryptocurrency and digital assets activities” enter the banking system through a national trust charter rather than a more strictly regulated traditional bank charter.
Protego Charter in the Crosshairs
The complaint singles out Protego Holdings Corp., a digital asset firm that offers custody, trading, lending and issuance services, and asks the court to vacate its conditionally approved trust charter. ICBA notes Protego laid off most of its workforce in 2023 and faced vendor lawsuits over unpaid bills. The lawsuit arrives amid a broader OCC push to open national bank charters to digital asset firms, a wave that has also produced trust charters for the likes of Bastion, Coinbase and Circle.
What It Means for Community Banks
“Congress did not create the national trust charter as a side door into the banking system for crypto firms seeking the credibility of a federal bank charter,” ICBA President and CEO Rebeca Romero Rainey said in a statement. She added that digital assets held at a crypto firm under a national trust charter “do not carry those important safeguards,” and that ICBA is asking the court to “return the OCC to its statutory limits.” ICBA also argues the OCC had never before chartered a national bank that neither took deposits nor engaged in fiduciary activities. The OCC said through a spokesperson that it does not comment on litigation.
