ICBA urged the OCC to reject Sony Bank’s application for a national trust bank charter for a proposed subsidiary—its latest response to the sudden influx of applications from nonbank fintechs.
ICBA Comments: In a new letter, ICBA told the OCC:
Sony Bank’s application for its proposed Connectia Trust subsidiary appears designed to receive the benefits of a U.S. bank charter without becoming subject to the full scope of U.S. bank regulations.
Sony Bank’s proposal to use Connectia to provide non-fiduciary custody of digital assets and to issue stablecoins to retail customers is outside the scope of the trust bank charter.
The OCC lacks statutory authority to expand trust powers under Interpretive Letter #1176.
Connectia should be subject to the Bank Holding Company Act’s definition of a bank.
Recent Coinbase Comments: ICBA this week expressed opposition to Coinbase’s application for a national trust bank charter for its subsidiary, Coinbase National Trust Co. In its letter to the OCC, ICBA urged the agency to deny the application on similar grounds.
More ICBA Advocacy:
A recent ICBA blog post says the sudden influx of applications from nonbank financial technology firms for national bank trust charters requires the OCC to change course.
ICBA and other groups recently urged the OCC to postpone the consideration of applications to form Ripple National TR Bank, Fidelity Digital Assets, and others, citing significant policy and legal questions over the applicants’ fiduciary activities and the departure from OCC precedent that these applications represent.
In a previous letter, ICBA urged the OCC to keep in mind several key principles when considering charter applications from digital asset providers, including their unique risks and need for sufficient supervisory and regulatory safeguards.