Some of the largest US banks are considering suing their financial regulator, arguing that a new raft of licenses for crypto, payment and fintech could put American consumers and the wider financial system at risk.
The Bank Policy Institute (BPI), which represents 40 of the biggest US lenders including JP Morgan, Goldman Sachs and Citigroup, is understood to be weighing its legal options after the Office of the Comptroller of the Currency (OCC) failed to heed repeated warnings from influential banking groups and state regulators over its reinterpretation of federal licensing rules.
The OCC, which is led by Jonathan Gould, a Donald Trump appointee and former crypto executive, has effectively made it easier for crypto and fintech upstarts to secure and operate under a national bank trust charter, giving them the right to serve customers across all 50 states.
However, banks say giving these firms the OCC’s stamp of approval means letting firms loose into the US financial system without the same rigorous supervision and controls required of fully fledged banks.
The reforms brought forward by the OCC are widely seen as playing into the Trump administration’s ideological push to bring crypto and previously fringe financial firms into the mainstream.
Trump’s own family-run cryptocurrency business, World Liberty Financial, made headlines after applying for one of the OCC’s national trust bank charters in January. Although bank lobby groups have so far stopped short of commenting on the firm’s bid for regulatory approval, the move has sparked opposition in Congress.
The BPI in October urged the OCC to reject applications by crypto and blockchain firms Circle and Ripple, as well as London-headquartered payments firm Wise, all of which lodged applications for so-called national trust charters.
The BPI, which has a board that includes JP Morgan boss Jamie Dimon, Bank of America’s Brian Moynihan, and Goldman Sachs chief David Solomon, warned at the time that “allowing firms to choose a lighter regulatory touch while offering bank-like products could blur the statutory boundary of what it means to be a ‘bank,’ heighten systemic risk and undermine the credibility of the national banking charter itself”.
The BPI is now considering whether to sue the OCC, according to a source familiar with the lobby group’s thinking.
It would be a rare but not unprecedented move for the industry body, which also sued the Federal Reserve in late 2024 following an uproar over changes to the central bank’s stress tests. The Fed eventually agreed to change its rules, with final proposals due later this month.
The Guardian understands the BPI has not yet made a decision on whether it will pursue legal action against the OCC.
The BPI declined to comment on the potential legal action.
The OCC has also come up against smaller banking groups and state regulators in its pro-crypto licensing push.
The Conference of State Bank Supervisors, which represents financial regulators from all 50 states, said in a letter to the OCC last month that handing regulatory approval to crypto and payments companies that ultimately fall outside “core federal banking laws” would mean “undermining competition, consumer protection and financial stability”.
Similar warnings were issued by the Independent Community Bankers of America (ICBA), representing about 5,0000 smaller lenders, which urged the OCC to pull or change its proposals for how it planned to issue licenses to crypto firms. The ICBA warned that the existing plans “would create a significant loophole in a foundation principle of bank regulation” and pose “critical public policy concerns for consumers and the stability of the financial services sector”.
The OCC did not respond to requests for comment.
