The Independent Community Bankers of America has sued the Office of the Comptroller of the Currency, arguing that the federal regulator has exceeded its legal authority by granting national trust-bank charters to crypto companies.

The ICBA filed the case in federal court on Friday, claiming the OCC is using the National Bank Act to create broader powers for national trust banks than Congress authorized. The group also argues that crypto firms are gaining access to the U.S. banking system without facing the same regulatory requirements imposed on community banks.

ICBA says the disparity could leave smaller banks at a competitive disadvantage. According to the group, companies operating with national trust charters do not face the same obligations involving capital, liquidity, regulatory supervision and Federal Deposit Insurance Corp. insurance.

The organization is one of the largest advocates for community banks in the United States. It also opposed the Digital Asset Market Clarity Act, which failed to advance in the Senate last month, citing concerns over its stablecoin provisions and the potential impact on traditional deposit accounts.

The current lawsuit targets the trust-charter route increasingly being pursued by crypto companies seeking access to the U.S. banking and payments system.

ICBA President and CEO Rebeca Romero Rainey said Congress did not establish the national trust charter as a means for crypto companies to obtain federal banking credibility without taking on comparable banking obligations. She specifically cited differences in capital, liquidity, supervision and FDIC insurance requirements.

The OCC declined to comment when contacted by CoinDesk, saying it does not discuss litigation.

The agency has continued approving national trust charters for crypto businesses, although such firms generally do not provide the same services as conventional community banks. They typically do not accept traditional cash deposits, which are the type of accounts covered by FDIC insurance requirements.

The Bank Policy Institute said it supports innovation within the regulated banking sector as long as companies conducting comparable activities face comparable rules and responsibilities. BPI executive Paige Pidano Paridon said trust-chartered firms should restrict their operations to trust activities and seek full-service banking charters if they want to conduct traditional banking business.

The increased demand for national trust charters has coincided with a revival in new banking entrants after years of limited activity. Crypto-focused firms such as Protego and Erebor have pursued the structure, while established companies including Coinbase, Circle and Crypto.com have also entered the trust-charter space.

World Liberty Financial, partly owned by President Donald Trump and his family, is another recent example. Its charter approval has drawn criticism from Democratic Senator Elizabeth Warren, who argued that it could create another avenue for Trump and his family to benefit financially.

Separately, the OCC granted a full national bank charter last month to OpenReserve Bank, a blockchain-focused bank backed by crypto investors including Andreessen Horowitz, Jump Capital and Coinbase Ventures.

The ICBA case will now put the OCC’s approach to crypto trust charters before a federal court, potentially testing the scope of the regulator’s authority over digital-asset banking institutions.