After the latest nonbank entity applied for a national trust bank charter, ICBA reiterated its call for the OCC to pause approvals of pending applications.
Details: Following Laser Digital’s application to form a national trust bank focused on digital assets, ICBA said the OCC should delay approval or substantive consideration of any pending national trust bank charter applications until it has finalized the notice of proposed rulemaking concerning the scope of permissible activities for national trust banks under the National Bank Act and corresponding OCC regulations.
Recent Advocacy:
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In a letter to the OCC, ICBA last week said that doing so would ensure the OCC complies with notice and comment requirements, avoids inconsistent outcomes, and provides transparency and certainty to the agency’s regulatory framework.
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After the OCC last month proposed a rule to allow national banks to engage in non-fiduciary activities in addition to their fiduciary activities, ICBA and others urged the OCC to extend the comment period, saying the period is insufficient to fully consider the potential scope of the proposal’s implications for the banking system.
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ICBA in December expressed opposition to the OCC’s conditional approval of five national trust bank charter applications from nonbank fintechs, saying the OCC lacks statutory authority to expand trust powers under Interpretive Letter #1176 and the influx of applications demonstrates nonbank fintechs are seeking the benefits of a U.S. bank charter without satisfying the full scope of U.S. bank regulations.
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A recent Independent Banker article and ICBA blog post break down the influx of applications from nonbank fintech firms for national bank trust charters and the risks they pose to the financial system.