Banking and Finance Law Daily Wrap Up, BANKING OPERATIONS—ICBA urges OCC to deny Lorum National Trust Bank charter application, (May 4, 2026)

By Jeff Williams

ICBA said that giving LNTB approval to conduct the activities outlined in its application would give it a competitive advantage over other National Trust Banks.

The Independent Community Bankers of America (ICBA) has submitted a comment letter to the Office of the Comptroller of the Currency registering its objection to the application Lorum Group Holdings Inc., filed seeking a de novo national trust bank charter for Lorum National Trust Bank, N.A. (LNTB).

The ICBA called the application “statutorily defective” and said it would "create unjustified competitive inequity for community banks operating under the full weight of the federal banking regulatory framework.” The group noted it has opposed the OCC’s “efforts to permit national trust banks to engage in activities beyond the fiduciary powers authorized under the National Bank Act,” adding: “LNTB’s application raises the same fundamental legal deficiencies, compounded by the application’s near-total opacity and the novel and untested nature of LNTB’s proposed activities.”

Application. In the application filed March 31, 2026, Lorum Group said that LNTB would be headquartered in New York and "operate as a specialized institution focused on providing financial infrastructure to global financial institutions.” LNTB’s “core business model will be centered on providing direct, transparent, and compliant U.S. Dollar (USD) access through named account custody,” a model that “establishes a direct informational link to ultimate account holders, intended to reduce nesting risk and enhance compliance transparency within the correspondent banking ecosystem,” Lorum Group said.

LNTB’s activities will “complement and enhance existing business lines managed by Lorum Group,” Lorum Group said. Those activities would include institutional clearing, “Facilitating settlement for USD and tokenized assets, including stablecoins and tokenized money market funds,” as well as both “non-fiduciary (named and client money designated accounts) and fiduciary (escrow) custody” services and "Treasury and liquidity management by providing non-fiduciary services such as foreign exchange and fixed income management, including tokenized assets,” the Lorum Group said. The application also stated that LNTB would not be engaged in lending activities, “ensuring a focus on the safety of client funds and the integrity of the payments infrastructure.”

Objections. The LNTB application “fails to satisfy the statutory requirements of the National Bank Act, proposes activities that plainly exceed the permissible scope of a national trust bank, and would provide tremendous benefits without assuming the obligations that accompany those benefits,” ICBA summarized in its letter.

Among its objections, ICBA said that National Trust Banks are “authorized solely to exercise fiduciary power” under the National Bank Act and that they “may not engage in the ‘business of banking’ that is reserved for full-service national banks." The LNTB application, ICBA noted, “expressly acknowledges that its proposed activities include non-fiduciary services” and discloses that it would provide institutional clearing services, including settlement for USD and tokenized assets.

“These proposed activities are not fiduciary services and are not ancillary to any recognized fiduciary capacity,” ICBA said. “They are independently offered commercial financial services. The application reinforces this conclusion by invoking “activities within the business of banking” as legal authority for LNTB’s proposed operations.”

Granting the application would also create unfair competition for community banks, which are subject to capital requirements, FDIC insurance assessments and examination, and the provisions of the Community Reinvestment Act (CRA), the group said. “LNTB’s application acknowledges that it will not be subject to CRA, will not be an insured depository institution, and will not be organized within a bank holding company subject to consolidated Federal Reserve supervision,” ICBA said.

In addition, ICBA said that OCC’s resolution framework is “inadequate” for National Trust Banks with the complexity of operations suggested for LNTB. “LNTB proposes to serve global financial institutions as a USD correspondent, tokenized asset settlement provider, and custody institution,” ICBA said. “If LNTB becomes a significant node in global USD clearing infrastructure, its failure could disrupt correspondent relationships across multiple jurisdictions and create dislocations in tokenized asset and stablecoin markets simultaneously."

Companies: Independent Community Bankers of America; Lorum National Trust Bank

RegulatoryActivity: BankingOperations CommunityDevelopment DepositInsurance FinancialIntermediaries NewYorkNews