After the OCC issued its final chartering rule for national trust banks, ICBA expressed significant concerns with chartering limited-purpose trust banks that engage substantially in non-fiduciary activities.
Details: In a national news release following the OCC announcement, ICBA President and CEO Rebeca Romero Rainey said:
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The OCC’s plan is inconsistent with its statutory authority laid out in legislative history, judicial interpretations, and the agency’s own internal precedent.
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Chartering uninsured national trust banks that engage in non-fiduciary cryptocurrency-related activities without being subject to prudential requirements that apply to FDIC-insured institutions poses critical public policy concerns.
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ICBA continues calling for the OCC to withdraw the rule or reissue an amended proposal consistent with its own statutory authority.
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The agency should impose a moratorium on pending and new charter applications until reaching a final rule that fully aligns with statutory intent and incorporates public comments.
Background: The OCC in January issued a proposed rule to amend current regulations to permit the OCC to charter limited-purpose trust banks that engage substantially in non-fiduciary activities.
Recent ICBA Advocacy:
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Responding to a request for information on the rulemaking, ICBA last month called on the OCC to withdraw the proposed rule or reissue an amended proposal consistent with its statutory authority.
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ICBA recently expressed opposition to the OCC’s conditional approval of several 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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An 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.