A significant development has emerged in the U.S. banking sector, as the Bank Policy Institute (BPI) evaluates the possibility of taking legal action against the Office of the Comptroller of the Currency (OCC). This consideration is primarily in response to the OCC”s recent decisions to issue national trust bank charters to various cryptocurrency companies, a move that has sparked considerable controversy.
According to a source familiar with the situation, the BPI”s potential lawsuit stems from concerns that the OCC has disregarded previous warnings from both banking organizations and state regulators regarding the risks associated with such charters. The BPI posits that the OCC”s actions could jeopardize the safety of American consumers and the overall financial system.
Under the guidance of Jonathan Gould, who was appointed during the Trump administration, the OCC has authorized the initial set of conditional national trust bank charters for several notable crypto firms, including Ripple, BitGo, and Paxos. This development has paved the way for other companies in the cryptocurrency space to seek similar charters, allowing them to function as trust banks and provide custody and asset safekeeping services.
In an October statement, the BPI urged the OCC to halt the processing of applications from crypto entities, including Ripple and Circle. The group argues that permitting these companies to operate under a lighter regulatory framework while offering services akin to traditional banks could blur the lines defining what constitutes a bank, potentially increasing systemic risk and undermining the integrity of the national banking charter.
As reported by The Guardian, the BPI has yet to finalize its decision regarding the lawsuit against the OCC. However, it is worth noting that the BPI had previously been part of a coalition of banks that challenged the Federal Reserve”s stress testing framework in late 2024, which led to a reconsideration by the central bank.
Similar apprehensions regarding the OCC”s approvals have been voiced by the Independent Community Bankers of America, an organization representing numerous small lenders. Recently, the ICBA has called on the OCC to modify or retract its licensing proposal for crypto firms.
Amid this regulatory scrutiny, World Liberty Financial, connected to former President Trump, applied for a charter in January, raising eyebrows and prompting concerns from figures like Senator Elizabeth Warren over potential conflicts of interest. Nonetheless, during a Senate Banking Committee hearing, Gould affirmed that the agency would persist in processing the application.
