The OCC today granted conditional approval for a national trust bank charter to New York-based Paxos National Trust. Paxos—a cryptocurrency firm that proposed to provide “a range of services associated with digital assets” including custody services—will operate as a non-depository trust bank.
ABA opposed this application by Paxos because the information in its application—which was made available to the public—was vague and the descriptions of its cryptocurrency and fiduciary activities was not sufficient to determine if it should be granted a trust charter. An OCC interpretive letter issued after Paxos submitted its applications appeared to help the applicant because it lowered the threshold for entities to be eligible for trust charters.
ABA President and CEO Rob Nichols joined National Community Reinvestment Coalition CEO Jesse Van Tol in an op-ed earlier this year warning of the risks of allowing fintechs to obtain national bank charters while circumventing the full range of consumer protection and community reinvestment laws that apply to traditional banks.