Rain has filed an application to create a U.S. national trust bank that could custody digital assets, manage stablecoin reserves and issue dollar-backed stablecoins if the Office of the Comptroller of the Currency approves the plan. According to Rain's October 5 announcement, the proposed Rain National Trust Bank would be headquartered in New York and operate as a separately capitalized subsidiary under OCC supervision. Rain itself would remain a stablecoin payments platform and would not become the bank, with the company working with law firm Paul Hastings to prepare the application. Rain CEO and co-founder Farooq Malik stated that customers using the company's infrastructure want assets supporting their programs held by a fiduciary overseen by a federal regulator. The application arrived three days after the Independent Community Bankers of America filed a federal lawsuit challenging the OCC's authority to approve national trust bank charters, placing Rain's bid into an expanding dispute over how crypto and payments firms can enter the federal banking system.
The Independent Community Bankers of America (ICBA) filed a lawsuit against the Office of the Comptroller of the Currency in federal court, specifically in the U.S. District Court for the District of Columbia. The banking group is challenging the regulator's authority to grant national trust bank charters to crypto firms, claiming the agency is pushing 'sweeping new powers to charter national trust banks that are not authorized by the National Bank Act.' The ICBA represents banks that typically have less than $10 billion in assets and has previously opposed the Digital Asset Market Clarity Act that failed to advance in the U.S. Senate last month. The October 2 complaint alleges the OCC lacks the power to charter non-fiduciary crypto firms as national trust banks, with the lawsuit specifically naming Comptroller Jonathan Gould in his official capacity. The case, Independent Community Bankers of America v. Office of the Comptroller of the Currency, was assigned case number 1:2026cv03441 to Judge Carl J. Nichols, with the complaint challenging a March 2026 OCC rule, Interpretive Letter 1176 and the conditional approval granted to Protego Holdings. ICBA wants the court to find the March rule and Interpretive Letter 1176 unlawful and seeks to stop the OCC from relying on the disputed framework for additional approvals.
If approved, Rain National Trust Bank would have three main business lines serving institutional clients. The bank would provide fiduciary custody for approved digital assets and U.S. dollars, with client property separated from its own assets, and could manage reserves for permitted stablecoin issuers under the federal GENIUS Act. As reported by Banking Dive, Rain CEO Farooq Malik described the proposed bank as a separate operation that would hold client assets under OCC examination. Rain currently provides infrastructure for stablecoin cards, wallets and money transfers, with partners serving millions of end users currently relying on a combination of state licenses, outside custodians and third-party stablecoin issuers. The company has named Brandon Soto as proposed president and CEO, subject to OCC review, who previously served as chief financial officer of Square Financial Services and held the CFO role at Coastal Financial Corporation. The proposed bank would not accept deposits, provide checking or savings accounts, offer consumer accounts or make commercial loans, operating as an uninsured national trust bank without FDIC deposit insurance. Assets held for clients would be segregated from the bank's own assets, with stablecoin reserves held by the proposed bank would be lent, pledged or reused.
According to the latest lawsuit filing, the ICBA argues that the OCC has exceeded its limited statutory authority to charter trust banks that perform certain fiduciary activities. The group specifically challenges the OCC's interpretive letter and final rule that permits the chartering of uninsured national trust banks engaging in non-fiduciary crypto-related activities while avoiding traditional bank regulatory frameworks. As reported by Banking Dive, the OCC takes a different view of its powers, with the agency saying the March 2026 rule merely clarifies its longstanding authority to let national trust banks conduct non-fiduciary activities alongside fiduciary work. The OCC expressly stated that the rule neither expands nor contracts its chartering authority, with the rule taking effect April 1. OCC spokesperson said Monday that the agency does not comment on litigation, while Comptroller Gould has previously defended the agency's approach, saying the OCC assesses whether applicants have a reasonable chance of success instead of applying a zero-risk standard.
The crypto industry has strongly opposed the ICBA lawsuit, with The Digital Chamber (TDC), a crypto lobby group, arguing that crypto firms didn't evade regulations but sought them based on the nature of their business. OCC's Jonathan Gould also rejected the banks' claims, noting that his 'job is not about incumbent protection.' Alexander Grieve, VP of Government Affairs at Paradigm, stated 'It's almost like everything we said about the bank trades just wanting to protect their fiefdoms at the expense of protecting American consumers was true.' The lawsuit highlights significant gaps in the regulatory framework, noting that crypto trust banks will lack many protections that apply to traditional banks, including deposit insurance, separation of banking and general commerce, and prohibitions on transactions with hedge funds and other risky investments. Rain's application comes as community banks are challenging the OCC's authority to approve national trust banks whose activities extend beyond traditional fiduciary services, with the legal fight following months of objections from banking groups. The ICBA warns that these uninsured institutions are at serious risk of failure if the volatile cryptocurrency market crashes, and the OCC's untested receivership framework would struggle to resolve an uninsured institution of Protego's and other crypto companies' proposed scale and complexity. Rain's application is part of a broader rush for limited-purpose national trust-bank charters, with Circle, Ripple, BitGo and Fidelity among five crypto firms to receive initial OCC approvals in December, and Circle securing final OCC approval in late July.
