Fintechs Escalate Push for Federal Trust Charters Amid Regulatory Firestorm

By Gabrielle Saulsbery
October 6, 2026

In a move that signals a deepening convergence between traditional finance and the digital asset economy, two prominent fintech firms—Modern Treasury and Rain—have officially filed applications with the Office of the Comptroller of the Currency (OCC) to establish national trust banks. These applications arrive at a volatile moment for the regulatory landscape, occurring mere days after a major banking trade association launched a legal offensive against the OCC, challenging the agency’s recent approach to chartering digital-asset-focused institutions.

The filings represent a strategic pivot for fintechs that have long operated on the periphery of the federal banking system. By seeking a national trust charter, these companies are aiming to move under the regulatory umbrella of the OCC, seeking the legitimacy, uniform oversight, and fiduciary standing that come with federal authorization.

The Strategic Intent: Unified Custody and Stablecoin Infrastructure

The applications submitted by Modern Treasury and Rain highlight two distinct, yet related, philosophies regarding the future of digital finance.

Modern Treasury, in its application for "Modern Treasury National Trust Bank," is positioning itself as an infrastructure provider for the modern economy. The firm intends to offer a "unified custody solution" that bridges the gap between fiat currency and digital assets. According to CEO Matt Marcus, the goal is to create a seamless environment where payments and settlements can occur with the same speed and reliability as traditional banking, but with the added utility of digital assets. While Marcus acknowledged in a recent LinkedIn post that stablecoins are becoming "foundational to global money movement," the company has explicitly stated that its proposed bank will not issue its own stablecoins. Instead, it seeks to function as a sophisticated custodian and settlement layer.

In contrast, Rain National Trust Bank is adopting a more direct role in the stablecoin ecosystem. Rain’s proposal includes plans to issue its own stablecoins in accordance with the provisions of the "Genius Act." Furthermore, the institution aims to hold and administer reserves for other Genius-permitted stablecoin issuers, acting as a specialized fiduciary.

Rain CEO and co-founder Farooq Malik emphasized that his firm’s move is a response to customer demand. "The firms using Rain to build out their stablecoin infrastructure want the assets behind their programs held by a fiduciary that answers to a federal regulator," Malik said in a statement. By establishing a national trust bank, Rain intends to provide that high-level regulatory assurance, effectively branding itself as the "bank for stablecoins."

A Challenged Path: The ICBA Lawsuit

The timing of these applications is highly significant. On the Friday preceding these filings, the Independent Community Bankers of America (ICBA) filed a lawsuit against the OCC, alleging that the agency’s recent spree of trust charter approvals lacks a sound legal basis.

The ICBA’s grievance is rooted in the belief that the national trust bank designation is being used as a "backdoor" for crypto firms to avoid the rigorous requirements imposed on traditional, deposit-taking banks. The lawsuit notes that since President Donald Trump began his second term, the OCC has approved or conditionally approved 21 national trust bank charters.

According to the ICBA, this trend "perversely allows entities engaged in highly risky cryptocurrency and digital assets activities to enter the banking system under lightly regulated national charters." The trade group argues that this creates an uneven playing field, granting fintechs the ability to preempt state law requirements while sidestepping the federal standards for deposit insurance and capital adequacy that traditional community banks are required to uphold. The litigation represents a direct challenge to the authority of the OCC to define the scope of these trust charters in the modern era.

The Regulatory Climate Under Comptroller Gould

The current climate at the OCC is marked by an increased openness to de novo chartering, a strategy heavily associated with current leadership. Since the early days of the current administration, the agency has prioritized the creation of a pipeline for new financial institutions, viewing them as necessary drivers of innovation in the banking sector.

This "amenability to de novo chartering," as described by industry observers, has not gone unnoticed. Fintechs, crypto platforms, and payment processors have responded by submitting dozens of applications for various charters, with a particular focus on the national trust designation. For many of these firms, the trust charter is seen as the "gold standard" for regulatory legitimacy, providing a federal imprimatur that can satisfy institutional partners and retail customers alike.

However, the rapid influx of these applications has put the OCC in a difficult position. The agency must balance its mandate to foster innovation and competition with the necessity of maintaining systemic stability and addressing the concerns of the traditional banking lobby.

Operational Discipline: The View from the Inside

Despite the mounting external pressure, the leadership at the firms seeking these charters is projecting an image of seasoned regulatory compliance.

Rain’s Chief Strategy Officer, who was instrumental in guiding Square Financial to its industrial loan charter in 2020—a feat achieved long before the current "charter rush"—stressed that the essence of a trust bank remains fundamentally traditional. "A trust bank’s first job is simple: know what you hold, know who you hold it for, and keep it safe," he remarked.

This focus on internal controls and reconciliation is a deliberate counter-narrative to the "risky" label applied by critics. "I have sat across from bank examiners for twenty years, and the best answer you can give is, ‘Here’s the reconciliation,’" he said. "That is the discipline we are building into the proposed national trust bank from day one. Clear ownership, daily reconciliation, strong controls, and the right level of capital."

Future Implications for the Banking Industry

The outcome of these pending applications, and the concurrent resolution of the ICBA lawsuit, will likely define the trajectory of the U.S. banking system for the next decade.

If the OCC continues to grant these charters, it will effectively solidify a two-tiered banking system: one consisting of traditional, deposit-taking institutions governed by the full breadth of federal banking law, and another composed of specialized, "trust-based" institutions that provide the infrastructure for the digital economy. While the former may view this as an existential threat to their business models, the latter argue that this evolution is essential to keep the U.S. financial system competitive in a global market increasingly dominated by digital assets.

Moreover, the "Genius Act" and its implementation will be a critical factor to watch. As the framework for stablecoin regulation matures, the role of these trust banks will become even more central to the stability of the broader financial ecosystem. If firms like Rain can successfully demonstrate that their fiduciary structures prevent the kind of liquidity and transparency crises that have plagued the crypto industry in the past, they may eventually win over even the most skeptical regulators.

However, the legal challenge posed by the ICBA serves as a stark reminder that the integration of digital assets into the federal banking fold is far from settled. The courts will now have to decide whether the OCC has overstepped its statutory authority or if it is merely adapting to the realities of a changing financial landscape.

As we look toward the remainder of 2026 and into 2027, the industry stands at a crossroads. The convergence of payment technology and federal trust status is no longer a theoretical debate—it is an active regulatory battleground. Whether these firms succeed in their quest for a federal charter will depend not only on their ability to prove their operational readiness but also on the ability of the OCC to defend its regulatory vision against a powerful and entrenched banking establishment.