WASHINGTON–Credit unions have joined with other groups in calling on the Office of the Comptroller of the Currency (OCC) to postpone its decision on granting crypto companies’ bank licenses until more details about their plans are public.
Not doing so, a jointly signed letter states, would be “a fundamental departure” from current policy.
America’s Credit Unions joined with the American Bankers Association, the Independent Community Bankers of America, the Consumer Bankers Association and the National Bankers Association in the letter that argues the approval of national bank charters for stablecoin issuers “would raise significant policy and process concerns.”
The CU Daily has regularly featured in recent months plans by numerous crypto-firms, including Circle, Ripple and Fidelity Digital Assets, to pursue bank charters.
‘Significant Questions’
Being approved for a banking license by the OCC essentially allow the firms to become their own banks, meaning they could settle payments faster and be regulated at a federal level, allowing them to operate in every state.
“There are significant policy and legal questions as to whether the Applicants’ proposed business plans involve the types of fiduciary activities performed by national trust banks,” according to the letter.
The groups are asking the OCC to postpone its decision on the crypto firms’ charter requests because the public portions of their applications “do not provide sufficient information for the public to assess or provide meaningful comment on the Applicants’ proposed business models and operations.”
Additional Scrutiny
The letter further suggests the public should also be able to scrutinize the OCC if it allows the applications, stating it would be a departure from long-standing policy as the business models put forward by the crypto companies “do not involve the types of fiduciary activities historically performed by national trust charter banks.”
“Providing custodial services for digital assets is not a fiduciary activity, and granting charters where traditional fiduciary activity is absent — or, is secondary at best — would represent a significant change in OCC policy that should be made only pursuant to a proper public notice and comment period,” the letter reads.
‘Material Risk’
The letter further argues that if the crypto firms are allowed to be national trust banks that provide “traditional banking services like payments,” other companies could follow, which would present a “material risk to the US banking and financial system.
