OCC moves to formalize non-fiduciary activities for trust banks

Key insight: With a proposed rule, OCC is codifying non-fiduciary trust bank activities.

Supporting data: Trusts hold $2 trillion in custody assets already.

Forward look: The proposal reinforces the agency's statutory basis for allowing trusts to conduct non-fiduciary activities, which could help stave off legal battles over the practice.

The Office of the Comptroller of the Currency Thursday issued a proposed rulemaking amending its rules to assert that national trust companies may engage in non-fiduciary activities, converting agency interpretation of a "potentially unclear" regulatory language into defensible regulation after bank trade groups criticized the agency for what they say was expansion of the trust charter without formal rulemaking.

Existing regulations can be "mistakenly read" to prohibit or constrain activities trusts may conduct, the OCC proposal states. 

"The OCC is proposing to amend [regulation governing trust company activities] to replace the term 'fiduciary activities' with 'the operations of a trust company and activities related thereto,' as stated in [the National Bank Act provision defining trust company operations]," the proposal said "The OCC believes that these amendments will eliminate potential confusion… these revisions will reinforce the OCC's reliance on the statutory terms of its chartering authorities."

While Comptroller Jonathan Gould has argued that national trust banks have always been permitted to engage in non-fiduciary activities, bank trade groups have pushed back, criticizing the agency's reliance on interpretive guidance rather than binding regulation. That criticism has focused in part on Interpretive Letter 1176, which Gould wrote in 2021 while serving as the agency's general counsel. The letter said that trust banks could engage in non-fiduciary custody and related activities.

The Independent Community Bankers of America disagrees, suggesting the OCC's interpretive letter improperly expanded the charter without formal rulemaking.

"This significant policy change was made without any direction from Congress and without amendment to the National Bank Act," Mickey Marshall, ICBA's vice president and regulatory counsel argued in November. "There is nothing in the existing statute to indicate that Congress intended for national trust banks to offer non-fiduciary services."

According to ICBA, the multitude of applicants proposing to offer stablecoins on demand, including, as of Wednesday, the Trump-affiliated World Liberty Financial, likely do not satisfy the exemption in the Bank Holding Company Act that only allows trust and fiduciary firms an exemption from official "bank" status and commensurate regulatory requirements.

OCC

Gould says trust charters have long had nonfiduciary scope

December 8, 2025 4:27 PM

Regulation on the matter was updated formally in 2003. At the time, an OCC final rulemaking stated that certain special purpose national banks conducting non-fiduciary activities must either take deposits, pay checks, or make loans, meaning they would be treated as a full-service bank for regulatory purposes. Such a designation would trigger additional regulatory obligations that do not automatically apply to limited purpose charters.

The OCC says that provision was intended to apply to non-trust special purpose banks and was not intended to limit national trust bank activities to only fiduciary functions. OCC's interpretive letters and historic practice, OCC says, confirms that.

"Both before and after the 2003 final rule, the OCC has chartered national trust banks that engage in activities that are not fiduciary," the proposal stated. "For example, the OCC considers custody and safekeeping activities to be generally non-fiduciary and authorized for national banks as part of the business of banking…Trust banks also frequently conduct custody activities and currently hold nearly $2 trillion in assets in custody or safekeeping accounts."