US Banking Lobby Urges OCC To Delay Crypto Charter Applications Approval

The US’s largest banking lobby has requested the Office of the Comptroller of the Currency (OCC) delay its approval of crypto bank charter applications, suggesting the regulator wait until regulatory uncertainty is cleared.

In a letter, the banking lobby urged the US’s top bank regulator to “ensure that robust, broadly applicable safety and soundness standards are well understood and upheld during this period of rapid innovation to provide greater transparency throughout its charter application and decisioning processes.”

The ABA now calls for patience as emerging crypto regulatory frameworks take shape, suggesting that the review process must be delayed until Congress finishes the rules that many recent OCC charter applicants will ultimately be subject to.

“We urge the OCC to be patient, not measure its application decisioning progress against traditional timelines, and allow each charter applicant’s regulatory responsibilities to come fully into view before moving a charter application forward,” ABA wrote.

The banking association emphasized that appropriate safety and soundness protections, including effective measures against conflicts of interest, and for compliance with other applicable consumer protection laws and regulations, must be in place from the beginning.

In addition, the association recommended an amendment to the OCC’s regulations to ensure new charter applicants’ names “do not misrepresent the nature of the financial services they intend to offer.”

They suggested that the agency prohibit any charter applicant that limits its activities to either fiduciary activities or trust company operations from including the word “bank” in its name.

ABA argued that “such entities would not be engaged in the business of banking and should, therefore, ‘not have a title that misrepresents the nature of the institution or the services it offers.’”

Earlier this week, the Bank Policy Institute, Clearing House Association, and Financial Services Forum sent a joint letter to the Fed, demanding a 12-month waiting period before firms are eligible to apply for payment accounts.

While the digital assets side was “largely positive,” Terret affirmed the banking side worried that crypto’s “less robust regulatory status could pose a problem,” with Better Markets CEO Dennis Kelleher calling the proposal “a reckless giveaway to the crypto industry that unnecessarily expands the Fed’s mandate without justification and undermines the Fed’s true mandate.”