Launching the License Defense Battle: U.S. Banking Industry Plans to Sue OCC

Author: ChandlerZ, Foresight News

According to The Guardian on March 9, the Banking Policy Institute (BPI), an industry organization representing 40 major U.S. banks including JPMorgan Chase, Goldman Sachs, and Citibank, is seriously considering suing the Office of the Comptroller of the Currency (OCC) to prevent it from issuing U.S. bank trust licenses to cryptocurrency companies and fintech startups. Once the lawsuit is filed, the conflict between traditional banking and the crypto industry over access to financial services will officially escalate into a legal battle.

83 Days, 11 Companies, a Race for Licenses

The trigger for this event dates back to December 2025. That month, the OCC conditionally approved trust bank licenses for five crypto-native companies, including Circle, Ripple, BitGo, Paxos, and Fidelity Digital Assets. This was the first time federal regulators issued such licenses to multiple crypto firms simultaneously.

Subsequently, a wave of applications followed rapidly. According to FinTech Weekly, within 83 days, 11 companies submitted trust bank license applications. The list includes crypto and fintech firms like Crypto.com, Bridge (a stablecoin subsidiary of Stripe), Zerohash, as well as traditional financial giants like Morgan Stanley. In February 2026, Crypto.com received conditional approval, just about four months after submitting its application.

Adding to the controversy, World Liberty Financial, a crypto enterprise associated with the Trump family, also applied for a similar license in January this year, planning to establish World Liberty Trust Company to issue its USD 1 stablecoin directly. Senator Elizabeth Warren previously pressured the OCC to delay approval over concerns about foreign ownership and conflicts of interest in this application, but OCC Director Jonathan Gould rejected the request.

Opposition Continues to Grow

BPI is not the only voice opposing these developments. A multi-layered opposition coalition has formed around OCC’s policy.

The Conference of State Bank Supervisors (CSBS), representing regulators from all 50 states, has taken a strong stance. Its chairman, Brandon Milhorn, publicly stated that OCC is assembling a “Franken license,” transforming a narrow trust license originally meant for fiduciary management into a backdoor to full banking operations. He explicitly mentioned that “litigation is certainly a possibility,” and if OCC’s authority expansion exceeds the bounds of the National Bank Act, states will consider administrative and legal actions.

The Independent Community Bankers of America (ICBA), representing 5,000 community banks, also expressed strong opposition, arguing that these new licenses would allow licensees to compete directly with traditional banks under a more relaxed regulatory framework, creating an unfair market environment.

The American Bankers Association (ABA) has directly called for OCC to suspend the licensing process.

BPI CEO Greg Baer believes that trust banks should not be subject to the same regulatory and capital standards as federally insured universal banks. He argues that the licenses approved by OCC have far exceeded the statutory and historical scope of trust banking.

Legal Dispute: An Explanatory Letter

The core legal issue in this conflict centers on OCC’s Interpretive Letter 1176, issued in 2021. This letter redefined the scope of trust bank activities, effectively loosening the requirements for crypto and fintech companies to obtain licenses.

Notably, the author of this letter was Jonathan Gould, then OCC Chief Legal Counsel, who now, as OCC Director, is responsible for implementing this rule. On February 27, 2026, OCC further proposed a rule revision, changing the language from “trust activities” to “trust company operations and related activities,” scheduled to take effect on April 1. Critics argue that this wording change further blurs the boundaries of trust bank activities.

Legal arguments from BPI and others focus on the fact that OCC’s reinterpretation and wording revisions effectively change licensing rules without following the formal rulemaking procedures mandated by the Administrative Procedure Act (APA), including public notice and comment. If litigation begins, these procedural flaws will be a primary point of attack.

Gould’s side argues that trust companies have long provided both fiduciary and non-fiduciary custody services, and that stablecoin reserves are narrow, segregated, non-credit-creating activities. They also contend that law requires OCC Directors to approve all applications meeting statutory criteria, regardless of the technology used.

Who Can Enter the U.S. Financial System Behind the License Dispute?

On the surface, this dispute concerns licensing standards, but at a deeper level, it revolves around who has the right to access the U.S. financial system and under what standards.

Traditional banks worry about regulatory arbitrage: crypto and fintech firms can operate across all 50 states with a trust license, offering payment, custody, and stablecoin issuance services, without bearing the same capital requirements, consumer protection obligations, or deposit insurance costs as full-service banks.

The crypto industry’s logic is clear: obtaining a unified compliance status at the federal level is key to mainstreaming. If OCC’s licensing pathway is closed, crypto firms will face high costs and fragmented regulation due to the need to apply state-by-state.

Currently, BPI has not officially filed a lawsuit, but informed sources say its legal team is preparing. CSBS also retains the option to sue. If either side takes action in the coming months, this will be the most significant legal confrontation in U.S. banking regulation since CSBS sued OCC to block fintech licenses in 2020.

The upcoming response from OCC, the rule revision effective April 1, and the handling of controversial applications like World Liberty Financial will be the key points to watch.