Rain Seeks US Trust Bank Charter Amid Crypto Banking Lawsuit

Rain Applies for OCC National Trust Bank Charter to Power Stablecoin Infrastructure

Financial technology and payments infrastructure provider Rain has formally submitted an application to the Office of the Comptroller of the Currency (OCC) to establish Rain National Trust Bank. The move aims to bring custody, reserve management, and stablecoin issuance under direct federal supervision, enabling institutional partners to operate within an established fiduciary framework.

According to the company, Rain National Trust Bank would focus on three primary business lines catering to institutional clients. The institution would provide fiduciary custody for approved digital assets and U.S. dollars, ensuring that client property is legally segregated from the bank’s own corporate balance sheet. Additionally, the bank would be structured to manage reserve assets for permitted stablecoin issuers and act as the issuer of record for U.S. dollar-backed stablecoins under the GENIUS Act.

Rain CEO and co-founder Farooq Malik emphasized that enterprise clients utilizing the company’s payments technology require the underlying assets supporting their systems to be held by a federally supervised fiduciary. Malik noted that the proposed bank would operate as a distinct entity subject to regular OCC examination. Currently, Rain provides the technical rails for stablecoin-linked cards, wallets, and money transfers, relying on a patchwork of state regulatory licenses, independent third-party custodians, and external stablecoin issuers. The federal charter would allow Rain to consolidate these vital operations internally.

To lead the proposed institution, Rain has named Brandon Soto as proposed president and CEO, subject to regulatory clearance. Soto previously served as the chief financial officer of Block’s Utah-chartered industrial bank, Square Financial Services, and subsequently served as the CFO of Coastal Financial Corporation. Rain prepared its charter application in coordination with legal counsel from Paul Hastings.

Structure as an Uninsured Trust Bank

Despite its banking designation, Rain clarified that Rain National Trust Bank would not function as a conventional commercial or consumer bank. The proposed entity will not accept consumer deposits, offer retail checking or savings products, or issue commercial loans. Operating as an uninsured national trust bank, it will not carry Federal Deposit Insurance Corporation (FDIC) insurance.

Under this trust arrangement, customer assets held in custody will remain designated strictly as client property rather than bank liabilities. Furthermore, Rain stated that reserves held to support any stablecoins issued by the entity would not be lent out, rehypothecated, pledged, or reused. This structure aligns with a broader pattern of crypto-native and digital asset firms pursuing OCC trust charters to secure federal oversight for settlement and asset custody without taking on traditional retail deposit-taking risks.

Rain is the latest in a series of firms navigating this specific regulatory pathway. In July, stablecoin issuer Circle secured final approval from the OCC for First National Digital Currency Bank, operating as Circle National Trust, to deliver fiduciary digital asset custody. Earlier, digital asset payments firm Agora received preliminary conditional approval in September following an April filing, while Zerohash submitted a revised national trust application in August after an initial filing was returned by the regulator.

Emerging Legal Pushback From Community Bankers

Rain’s regulatory bid enters the OCC pipeline during a pivotal legal confrontation over the agency’s chartering scope. On October 2, the Independent Community Bankers of America (ICBA) filed a lawsuit against the OCC and Comptroller Jonathan Gould in the U.S. District Court for the District of Columbia. The case, Independent Community Bankers of America v. Office of the Comptroller of the Currency (case number 1:2026cv03441), has been assigned to Judge Carl J. Nichols.

The litigation targets a March 2026 OCC rule, Interpretive Letter 1176, and the conditional trust charter granted to Protego Holdings. In its filing, the ICBA claims that the regulatory agency has far exceeded its statutory authority under federal banking law by authorizing national trust banks to execute non-fiduciary operations under limited-purpose charters. The trade group is asking the court to invalidate the March rule, declare Interpretive Letter 1176 unlawful, vacate Protego’s conditional approval, and prevent the OCC from applying the framework to future applicants.

The OCC has maintained that its actions remain well within longstanding legal parameters. When publishing its February bulletin ahead of the rule’s April 1 effective date, the regulator asserted that the measure simply clarified existing statutory authority permitting national trust banks to conduct non-fiduciary operations alongside standard fiduciary activities, neither expanding nor narrowing its authority. Comptroller Gould has previously stated that the agency assesses whether charter candidates demonstrate a reasonable likelihood of success rather than maintaining a zero-risk standard. An OCC spokesperson indicated that the agency does not comment on active litigation.

Why This Matters

The pursuit of federal trust charters represents a critical strategic shift for the digital asset payments sector. By obtaining an OCC charter, infrastructure providers like Rain can sidestep the fragmented state-by-state money transmitter licensing regime, streamline operational pipelines, and offer institutional counterparties bankruptcy-remote fiduciary protections directly monitored by the federal government.

However, the final outcome of the ICBA’s lawsuit could reshape the future of fintech regulation. If the federal court restricts the OCC’s ability to charter trust institutions that carry out non-fiduciary activities such as payments processing or stablecoin issuance, ongoing applications—including Rain’s multi-year initiative—could face structural delays or legal roadblocks. Rain stated that its existing card, wallet, and payment transfer services will continue operating normally throughout the public comment period and regulatory review process.

Frequently Asked Questions

What services will Rain National Trust Bank provide if approved?

The proposed national trust bank plans to operate three institutional service lines: providing fiduciary custody for approved digital assets and U.S. dollars, managing reserve assets for authorized stablecoin issuers, and issuing as well as redeeming U.S. dollar-backed stablecoins under the GENIUS Act.

Will Rain National Trust Bank offer FDIC-insured consumer bank accounts?

No. Rain National Trust Bank will operate as an uninsured national trust institution. It will not offer retail checking or savings accounts, accept consumer deposits, or issue commercial loans. Assets held in custody will remain designated solely as client property and will not be pledged, lent, or commingled.

Why are community banking groups suing the OCC over crypto trust charters?

The Independent Community Bankers of America (ICBA) filed a federal complaint alleging that the OCC exceeded its statutory powers by permitting limited-purpose national trust banks to conduct non-fiduciary business lines alongside traditional fiduciary services, seeking to overturn recent regulatory guidance and block future limited-purpose fintech charters.