ICBA opposes Circle’s application for a national trust bank charter

ICBA said it strongly opposes Circle’s application for a national trust bank charter for its proposed subsidiary, First National Currency Bank, N.A.

Details: In a letter to the OCC, ICBA said:

• Granting the charter would undermine the stability of the financial system by allowing a non-traditional institution to offer deposit-like services without adequate regulatory oversight.

• The OCC should reject FNDCB’s application to prevent the risks posed by stablecoins, including potential deposit drainage, increased fraud, and circumvention of critical banking regulations.

• The OCC must undertake formal rulemaking to clarify the scope of national trust bank powers and ensure alignment with congressional intent.

Recent Advocacy: ICBA and other groups this month told the OCC that recent national bank charter applications submitted by National Digital TR CO; Fidelity Digital Assets, N.A.; First National Digital Currency Bank, N.A.; and Ripple National TR Bank raise substantial concerns. It urged the OCC to postpone considering the applications.

What It Means for Community Banks: In a recent letter to the OCC, ICBA urged the agency to keep in mind several key principles when considering digital asset charter applications, including their unique risks and need for sufficient supervisory and regulatory safeguards. ICBA noted that applications from nonbank digital asset-related entities seeking to establish full-service national banks or limited-purpose national banks pose unique challenges to bank chartering policy and to the safety and soundness of the financial system.