Two fintech firms, Modern Treasury and Rain, applied for national trust charters from the Office of the Comptroller of the Currency on Monday. This move comes amid growing interest from fintech companies seeking federal regulation, with both firms joining a burgeoning list of applicants days after a trade group sued the OCC over trust charters.
If approved, the charters would allow both companies to offer asset custody and related services, though they would not permit accepting deposits or making loans. This aligns with the OCC’s recent trend of approving such charters, which has spurred dozens of applications from fintechs, crypto firms, and payments companies.
What the Charters Mean for Each Company
Modern Treasury, a San Francisco-based payments infrastructure firm, aims to provide customers with a unified custody solution for both fiat and digital assets, integrating this with their existing payments and settlement capabilities. Notably, the proposed bank will not issue its own stablecoins, as founder and CEO Matt Marcus emphasized their foundational role in global money movement without direct issuance.
Rain, a New York City-based stablecoin infrastructure platform, plans to issue stablecoins in compliance with the Genius Act and manage reserves for other stablecoin issuers permitted under the same act. CEO and co-founder Farooq Malik stated that Rain’s customers seek a fiduciary answering to a federal regulator, positioning the trust bank as a direct response to this demand.
Industry Context and Recent Developments
The applications follow a lawsuit filed by the Independent Community Bankers of America against the OCC, challenging the approval of national trust bank charters, particularly for cryptocurrency firms. The lawsuit argues that these charters allow companies to bypass state laws and federal requirements for traditional banks, placing community banks at a disadvantage. Despite this, the OCC has approved or conditionally approved 21 national trust bank charters since President Trump’s second term began, encouraging a wave of applications from fintechs and related firms.
Leadership and Vision
Brandon Soto, Rain’s proposed CEO, brings extensive experience from Coastal Financial Corp., Square Financial Services, and Green Dot Bank, where he served in roles including CFO and administrative chief. Soto played a key role in Square Financial’s 2020 acquisition of an industrial loan charter, well before the recent charter rush. He emphasizes the core function of a trust bank: knowing what assets are held, for whom, and ensuring their safety.
