Fintech-Backed Trust Bank Plan Threatens Customers, States Warn

A US regulator’s proposal to expand eligible activities under trust bank charters coveted by the crypto industry would leave consumers exposed to nontraditional financial companies without deposit insurance and other basic safeguards, state banking cops said.

The formal comments from the Conference of State Bank Supervisors, which previously sued over a proposed “fintech charter” during the Obama administration, present the latest wrinkle for the Office of the Comptroller of the Currency as it considers giving digital asset companies a foothold in the traditional banking system.

The OCC’s plan would allow banks operating under a national trust charter from the agency ...