ICBA opposes Dakota Ridge national trust bank charter application

ICBA urged the OCC to deny Dakota Ridge’s application for a national trust bank charter, citing concerns with its business model and broader policy considerations.

Defer Action: At a minimum, ICBA said, the OCC should defer action until the applicant provides sufficient public information to permit a meaningful review.

Details: In a letter to the OCC, ICBA said the application should be denied because:

• The proposed business model exceeds traditional trust powers and raises fundamental supervisory concerns.

• The applicant fails to demonstrate that Dakota National Trust Bank would be meaningfully independent from its parent.

• The application fails to establish that the proposed board and management team have sufficient banking and trust-banking experience.

• The public record does not permit meaningful evaluation of DNTB’s ability to satisfy the convenience and needs of the community.

• The applicant seeks to use regulatory arbitrage to gain bank-like powers without bank-like obligations.

Background: Dakota Ridge, a Colorado-based company, last month filed a national trust bank charter application to form Dakota National Trust Bank, which would be based in New York and issue stablecoins.

Latest Charter News: The OCC last month denied the national trust bank charter application for Wise, an international financial services company that offers cross-border payment services. In a national news release, ICBA said the denial is consistent with many of the concerns ICBA raised during the application process.

ICBA View: In a comment letter earlier this year responding to the agency’s proposed rule on national trust bank chartering, ICBA said the OCC’s plan to charter uninsured national trust banks that engage in non-fiduciary cryptocurrency-related activities without being subject to key prudential requirements poses critical public policy concerns.