Banking Groups Urge Stricter OCC Scrutiny of Nonbank Stablecoin Applicants

The OCC's proposed framework for approving payment stablecoin issuers would judge nonbank applicants under the same approval factors as bank subsidiaries, with no public comment on individual applications; four banking associations said that nonbank applicants should face additional scrutiny and that applications should be opened to public review.

Under the GENIUS Act, the OCC proposed a rule in March 2026 listing four factors for evaluating stablecoin issuer applications under proposed 12 CFR 15.30: (i) the applicant's financial condition and ability to meet reserve requirements; (ii) the absence of felony convictions among officers or directors for offenses such as money laundering or fraud; (iii) the competence, experience, and integrity of officers, directors, and principal shareholders; and (iv) the adequacy of the applicant's redemption policy under the rule's standards.

The American Bankers Association, Bank Policy Institute, Consumer Bankers Association, and Independent Community Bankers of America filed a joint comment letter on the OCC's July 2026 proposal for stablecoin issuer application and registration forms, saying that the OCC's proposed requirements are insufficient as applied to nonbanks and foreign issuers.

The associations argued that nonbank applicants, meaning those that are not subsidiaries of an insured depository institution, are not subject to the federal prudential framework governing banks and their affiliates. They said the OCC should use its statutory authority to require nonbank applicants to demonstrate adequate governance, risk management, operational resilience, cybersecurity practices, and recovery planning before approval.

They also urged the OCC to publish stablecoin issuer applications and accept public comment on them, noting that many bank applications already undergo similar review. Finally, they reiterated an earlier request that foreign payment stablecoin issuers be subject to home-country capital requirements comparable to those applied to U.S. issuers, arguing that the OCC has less visibility into and control over foreign issuers.