Several prominent U.S. banks are contemplating legal action against their financial regulator, the Office of the Comptroller of the Currency (OCC), due to concerns that a recent influx of licenses for cryptocurrency, payment, and fintech firms poses risks to American consumers and the broader financial system. The Bank Policy Institute (BPI), which represents 40 of the nation’s largest lenders—including JP Morgan, Goldman Sachs, and Citigroup—is reportedly evaluating its legal options following the OCC’s disregard for numerous warnings issued by influential banking groups and state regulators regarding its new interpretation of federal licensing rules.
Under the leadership of Jonathan Gould, a former crypto executive appointed by Donald Trump, the OCC has streamlined the process for crypto and fintech start-ups to obtain a national bank trust charter, enabling them to serve customers across all 50 states. However, banks argue that this approval process lacks the stringent supervision and regulatory controls that traditional banks must adhere to.
Critics have pointed out that these reforms reflect the Trump administration’s ideological push to mainstream cryptocurrency and previously fringe financial firms. Adding to the controversy, Trump’s family-run cryptocurrency venture, World Liberty Financial, attracted attention after applying for one of the OCC’s national trust bank charters in January. While banking lobbyists have been reticent to comment on this particular application, it has ignited opposition in Congress.
In October, the BPI urged the OCC to deny national trust charter applications from crypto firms such as Circle and Ripple, as well as the payments company Wise, headquartered in London. The BPI cautioned that allowing these firms to select a “lighter regulatory touch” while offering bank-like products could blur crucial distinctions in what constitutes a bank, heighten systemic risk, and undermine the integrity of the national banking charter itself.
As discussions within the BPI continue, sources indicate that a lawsuit against the OCC is under consideration, although no decision has been finalized. This potential move would mark a rare instance of the industry body pursuing legal action against a regulator, reminiscent of its lawsuit against the Federal Reserve in late 2024, which arose from controversies over changes to the central bank’s stress tests. The Federal Reserve subsequently agreed to modify its rules.
The OCC has also faced opposition from smaller banking groups and state regulators amid its pro-crypto licensing initiative. The Conference of State Bank Supervisors, which represents regulators from all 50 states, warned in a recent letter that granting regulatory approval to firms that operate outside of “core federal banking laws” could undermine competition, consumer protection, and financial stability.
The Independent Community Bankers of America (ICBA), representing around 5,000 smaller lenders, echoed these concerns by urging the OCC to reassess its licensing proposals. ICBA representatives warned that the current plans could create significant loopholes in foundational banking regulations, posing critical public policy risks for consumers and the overall stability of the financial services sector.
As the marketplace evolves, the OCC’s approach to regulating emerging financial technologies is likely to remain under scrutiny, with various stakeholders eagerly awaiting the outcomes of ongoing discussions and potential legal actions.
