ICBA objects to ZeroHash charter application

ICBA objected to the application filed by Zero Hash US LLC to charter ZeroHash National Trust Bank—its latest response to the current influx of national trust charter applications.

Details: In a letter to the OCC, ICBA said it has significant concerns regarding the applicant's business model and the broader policy considerations raised by its application. ICBA urged the agency to deny the application or defer any action until full disclosure of the application materials and independent validation of the applicant’s risk-management capabilities.

Key Concerns: ICBA said it was particularly concerned that:

• The proposed business model exceeds traditional trust powers.

• The charter structure enables regulatory arbitrage.

• The OCC’s accelerating pace of approvals and policy changes outstrips its capacity for deliberate and transparent policymaking.

ICBA View: ICBA has repeatedly objected to national trust charter applications from limited-purpose trust banks that engage substantially in non-fiduciary activities, including recent applications from PAYO Digital Bank and Morgan Stanley Digital Trust and a series of approvals announced in December.

OCC Rulemaking: After the OCC issued its final chartering rule for national trust banks last month, ICBA expressed significant concerns. Responding to a request for information on the rulemaking in February, ICBA called on the OCC to withdraw the proposed rule or reissue an amended proposal consistent with its statutory authority.

Background: An Independent Banker article and ICBA blog post break down the influx of applications from nonbank fintech firms for national bank trust charters and the risks they pose to the financial system.