ICBA expressed opposition to the OCC’s conditional approval of five national trust bank charter applications from nonbank fintechs.
OCC Approvals: The OCC conditionally approved applications for de novo national trust bank charters for First National Digital Currency Bank and Ripple National Trust Bank. It also conditionally approved applications to convert from a state trust company for BitGo Bank & Trust, Fidelity Digital Assets, and Paxos Trust Company.
ICBA Response: In a national news release, ICBA said:
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The OCC lacks statutory authority to expand trust powers under Interpretive Letter #117.
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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—threatening consumers and the financial system.
Statement: ICBA President and CEO Rebeca Romero Rainey noted that trust banks are not required to meet the same kinds of regulatory and capital standards that apply to federally insured full-service banks.
ICBA Advocacy: ICBA continues to call on the agency to pause consideration of these applications, rescind Interpretive Letter #1176, and undertake a formal rulemaking that will clarify the scope of this charter and ensure alignment with congressional intent.
Recent Actions:
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In a series of recent letters on national trust bank charter, most recently on the application from Coinbase, ICBA said the applications are designed to provide nonbank fintechs the benefits of a bank charter without satisfying the full scope of bank regulations.
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A recent Independent Banker article and previous 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.