CBW Bank applies to OCC for bank charter conversion

• Key insight: A Kansas community bank that has partnered with fintechs and crypto companies is applying for a bank charter conversion.
• What's at stake: CBW Bank is one of many banks and financial technology companies looking to get involved with digital assets and decentralized finance.
• Expert quote: "The OCC [has] taken many steps to reduce regulatory burden and support innovation and digital asset activities in national banks." —Klaros Group's Michele Alt

CBW Bank has applied to the Office of the Comptroller of the Currency to convert its state banking charter to a national one.

The Kansas-based bank, which currently holds $66 million in assets according to its latest call report, is listed on the agency's digital asset licensing applications webpage under pending applications as of Wednesday, with the application date listed as June 26.

CBW Bank is the latest financial institution to request regulatory approval from the OCC to operate in the digital assets space under the framework outlined by the GENIUS Act. It is not the first state-chartered firm to ask for a conversion to do so — Bastion Platforms also applied to convert its New York State trust bank charter to a national trust charter earlier this year.

A public version of the application was not released, as "applications to convert to a national bank are not included [published] as these applications are not subject to public comment," according to the OCC. The OCC's site does not specify whether the application is for a de novo charter or a trust charter, and the agency did not respond to a request for comment on what type of national charter CBW Bank applied for by time of publication.

Klaros Group partner Michele Alt confirmed that the charter application is a conversion application from a Kansas state bank charter to an OCC-granted national charter.

"Post-financial crisis, the conversion trend was toward state bank charters and away from national bank charters," she said. "At that time, the OCC was seen as a more burdensome and restrictive regulator than its state counterparts."

Alt said that over the past year or so under the current administration, that trend has now reversed. 

"The OCC [has] taken many steps to reduce regulatory burden and support innovation and digital asset activities in national banks," she said. "Given CBW's focus on digital assets, this conversion makes sense."

CBW Bank was one of the first banks to offer banking as a service to fintechs back in 2012 and is one of the founding partners of Mastercard's global Crypto Partner Program launched in March of this year. CBW was also one of the first U.S. banks to connect to cryptocurrency payments company Ripple Technologies for cross-border payments.

The bank was hit with a $20 million fine from the Federal Deposit Insurance Corporation, CBW's primary federal regulator, in late 2024 for lapses in AML compliance for its international banking operations. The bank contested the charges in a separate court filing at the time. 

In January of this year CBW Bank and the FDIC reached a settlement agreement, putting the case before a federal appeals court on hold. Details of the settlement were not disclosed, but the settlement agreement requires "certain actions by the parties that are expected to take several months to carry out" according to the text of the most recent court filing.