Rain files for national trust bank charter as OCC faces suit

Key points

• Rain applied to the OCC for Rain National Trust Bank, based in New York
• ICBA sued the OCC on Oct. 2 over its March 2026 chartering rule
• ICBA says OCC has approved at least 21 trust banks, 13 crypto firms
• Rain's bank would not take deposits or carry FDIC insurance

Stablecoin payments infrastructure provider Rain said Monday it has applied to the Office of the Comptroller of the Currency (OCC) to establish Rain National Trust Bank, a federally supervised entity headquartered in New York. The filing came three days after the Independent Community Bankers of America (ICBA) sued the OCC over the rules that make such charters available to crypto firms, Cointelegraph reported.

What Rain’s proposed trust bank would do

According to Rain’s announcement, the bank would run three lines of business if approved: custody of digital and fiat assets held as a fiduciary with segregated client assets; reserve management for permitted stablecoin issuers under the GENIUS Act; and issuance and redemption of dollar-backed stablecoins as issuer of record.

Rain said the trust bank would not accept deposits, make commercial loans, offer consumer accounts or carry FDIC insurance. The company said it would continue its existing card and wallet programs through separate subsidiaries. Brandon Soto, a former chief financial officer of Square Financial Services, is proposed as president and CEO, subject to OCC review. Rain said it worked with the law firm Paul Hastings and that the application is subject to a public comment period.

Rain CEO and co-founder Farooq Malik said institutions building on the platform want their program assets “held by a fiduciary that answers to a federal regulator.”

Cointelegraph reported that payments infrastructure company Modern Treasury also said Monday it had submitted an application for approval to offer digital asset custody and related fiat services.

Community banks challenge the OCC rules

On Friday, Oct. 2, the ICBA filed suit against the OCC and Comptroller Jonathan Gould in the US District Court for the District of Columbia. The group alleges the agency exceeded its authority under the National Bank Act by letting non-depository trust banks engage in broad non-fiduciary activities, according to Cointelegraph and Crypto Briefing.

The complaint targets the OCC’s national bank chartering final rule, issued March 2, 2026, and Interpretive Letter 1176 from 2021. The ICBA asks the court to overturn both and to bar further charter approvals that rely on them. It argues the framework lets firms engaged in risky crypto activities enter the banking system under lightly regulated national charters. It also says the structure gives crypto trust banks an advantage over community banks without the same obligations, and that consumers could mistake the “national bank” label for assurance that deposits are federally insured.

The ICBA’s complaint says the OCC has approved or conditionally approved at least 21 trust banks, at least 13 of them crypto companies, per Cointelegraph. Crypto Briefing reported that the complaint points to obligations such as the Community Reinvestment Act and FDIC insurance that traditional banks face. The Crypto Council for Innovation said Monday that the lawsuit was an attempt to stifle innovation, Cointelegraph reported.

What happens next

The OCC has not yet acted on Rain’s application, which will go through agency review and public comment. The lawsuit will proceed in federal court in Washington, where the OCC is expected to respond to the complaint. Other banking groups could also take action: a search report indicated the Bank Policy Institute, which represents large lenders, is weighing whether to bring its own challenge, though that has not been confirmed as a filing.

The outcome could affect pending applicants such as Rain and Modern Treasury, since the ICBA is asking the court to halt approvals that depend on the March rule and the 2021 letter.