Banks vs Crypto: US Banking Lobby Challenges Banking Charters in Court

Showdown over crypto banking charters. The Independent Community Bankers of America (ICBA) has filed a lawsuit against the Office of the Comptroller of the Currency (OCC) in federal court in the District of Columbia. The association accuses the regulator of creating a pathway to the banking system for crypto companies without imposing all the constraints applied to traditional banks.

The lawsuit targets interpretive letter No. 1176 and a rule published on March 2, which took effect on April 1. The ICBA is also seeking the annulment of the conditional charter granted to Protego Holdings.

Key Points

• The ICBA is contesting in court the powers used by the OCC to grant charters to certain crypto companies.
• The lawsuit targets interpretive letter No. 1176 and the federal rule that came into effect in April 2026.
• The banks involved do not collect deposits and do not benefit from FDIC insurance.
• The conditional charter obtained by Protego Holdings in February is directly mentioned in the complaint.

Crypto: ICBA Challenges OCC's Banking Powers

Interpretive letter No. 1176 dates back to January 2021. It states that a national trust bank can engage in certain non-fiduciary activities permitted for trust companies, including asset custody. The rule adopted in 2026 codified this interpretation into OCC regulations.

The ICBA disputes this reading of the National Bank Act. According to them, Congress did not authorize the agency to issue this type of charter to companies whose activities are primarily based on non-fiduciary services related to digital assets:

"Congress did not create the national trust charter as a backdoor into the banking system for crypto companies seeking the credibility of a federal charter without the obligations that apply to insured depository institutions." Rebeca Romero Rainey, President and CEO of the ICBA -- Source: ICBA

These institutions do not collect deposits, and their clients do not benefit from FDIC insurance. The ICBA also emphasizes the lack of obligations under the Community Reinvestment Act and the application of different capital, liquidity, and supervisory rules compared to commercial banks.

The OCC defends an opposing reading. The regulator believes that the law has long authorized it to charter banks limited to the operations of a trust company, even when some of their activities are not strictly fiduciary. The court will therefore have to resolve a disagreement over the extent of the powers that Congress has granted to the agency. ![The Independent Community Bankers of America (ICBA) has filed a lawsuit against the Office of the Comptroller of the Currency (OCC) in federal court in the District of Columbia. The association accuses the regulator of creating a pathway to the banking system for crypto companies without imposing all the constraints applied to traditional banks.

The lawsuit targets interpretive letter No. 1176 and a rule published on March 2, 2026, which took effect on April 1. The ICBA is also seeking the annulment of the conditional charter granted to Protego Holdings.](https://journalducoin-com.exactdn.com/app/uploads/2026/10/Lobby-banque-OCC-US-regulation.png?strip=all&quality=90&webp=90&lazy=1) ![The Independent Community Bankers of America (ICBA) has filed a lawsuit against the Office of the Comptroller of the Currency (OCC) in federal court in the District of Columbia. The association accuses the regulator of creating a pathway to the banking system for crypto companies without imposing all the constraints applied to traditional banks.

The lawsuit targets interpretive letter No. 1176 and a rule published on March 2, 2026, which took effect on April 1. The ICBA is also seeking the annulment of the conditional charter granted to Protego Holdings.](https://journalducoin-com.exactdn.com/app/uploads/2026/10/Lobby-banque-OCC-US-regulation.png?strip=all&quality=90) The banking sector is outraged against the national regulator regarding crypto companies -- Source: Compte X JDC

Protego Holdings at the Center of the Legal Battle

The lawsuit directly targets Protego Holdings, a specialist in custody, trading, lending, and issuance of digital assets. The OCC granted it a conditional charter in February 2026 to create a National Digital Trust Company.

Protego had previously obtained a first conditional authorization in 2021, but it expired before the bank's actual opening. The company then laid off a large part of its staff in 2023 and is facing several lawsuits with suppliers over unpaid invoices. The ICBA had therefore requested the OCC to reject its new application, citing weaknesses in its governance and control mechanisms.

However, the case goes beyond just Protego. Circle, Ripple, Paxos, Fidelity Digital Assets, BitGo, and Coinbase also received conditional approvals from the OCC between December 2025 and April 2026. Anchorage Digital already had a federal charter since 2021.

An ICBA victory would undermine the framework used to issue these authorizations, without automatically leading to their disappearance. The consequences would depend on the exact scope of the judgment and any appeals that may be filed against each decision. So far, no illegality has been established: the complaint primarily opens a battle over the boundary between trust companies, crypto enterprises, and federal banks.

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