Wall Street's biggest banks are preparing for a legal showdown with their federal regulator. According to a report by The Guardian, the Bank Policy Institute (BPI), which represents 40 leading lenders including JPMorgan, Goldman Sachs, and Citigroup, is evaluating whether to sue the Office of the Comptroller of the Currency (OCC) over its reinterpretation of federal licensing rules that has eased the path for crypto and fintech startups.
OCC's New Rule Lowers Bar for Crypto National Trust Bank Charters
The OCC, led by Trump appointee Jonathan Gould, has made it easier for crypto and fintech startups to obtain national trust bank charters, allowing operations in all 50 states. Banks argue these approvals bypass rigorous oversight and might expose consumers and the financial system to risks.
Beyond reducing entry barriers, the OCC's reforms reflect the Trump administration’s ideological push to mainstream crypto assets. Trump family crypto venture World Liberty Financial applied for a national trust charter in January, drawing congressional scrutiny.
BPI Warns Blurring Lines Between Banks and Fintechs Raises Systemic Risk
The BPI previously urged the OCC to reject applications from Circle, Ripple, and London-based Wise. The lobby group warned 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 board — which includes JPMorgan CEO Jamie Dimon, Bank of America CEO Brian Moynihan, and Goldman Sachs CEO David Solomon — is considering legal action. In late 2024, the group sued the Federal Reserve over changes to stress tests, leading to a rule revision. A similar scenario may unfold.
State regulators and smaller banking groups have also sounded alarms. The Conference of State Bank Supervisors and the Independent Community Bankers of America (ICBA) emphasize that licensing crypto firms without central federal oversight could jeopardize financial stability, consumer protection, and competition. The ICBA called the OCC’s plan a “critical public policy concern” for both consumers and the broader financial services sector.
The ongoing debate highlights rising tensions between traditional banks and regulators eager to embrace the fintech revolution. Banks insist on maintaining stringent oversight standards.