Community bankers sued the Trump administration on Friday after regulators moved to grant bank charters to a wave of cryptocurrency companies. The lawsuit by the Independent Community Bankers of America accuses the regulators of allowing “highly risky cryptocurrency and digital asset activities” to enter the banking system without submitting them to the same level of regulatory oversight as banks. The lawsuit names the Office of the Comptroller of the Currency and its head, Jonathan Gould.
Under Gould, the OCC has granted preliminary approval to a slew of national trust charter applications by crypto companies that say they want to use the licenses to custody digital assets and issue stablecoins. The ICBA argues that the OCC has overstepped its statutory authority by expanding the types of activities that trust banks can engage in. The lawsuit asks a federal court in Washington, D.
C. to vacate a rule that the regulator finalized earlier this year and guidance that the group said opened the door to the flood of applications for charters. Under President Trump, a Republican majority in Congress and the nation’s financial regulators have moved to usher digital assets into the mainstream financial system. Smaller banks have been on edge that cryptocurrencies and stablecoins will draw deposits out of the banking system, which could reduce profits and their ability to lend.
Source: Wall Street Journal Markets · Summarized by HeadlinesBriefing