Some of the largest US banks are considering suing their financial regulator, arguing that a new raft of licenses for crypto, payment and fintech could put American consumers and the wider financial system at risk.

The Bank Policy Institute (BPI), which represents 40 of the biggest US lenders including JP Morgan, Goldman Sachs and Citigroup, is understood to be weighing its legal options after the Office of the Comptroller of the Currency (OCC) failed to heed repeated warnings from influential banking groups and state regulators over its reinterpretation of federal licensing rules.

The OCC, which is led by Jonathan Gould, a Donald Trump appointee and former crypto executive, has effectively made it easier for crypto and fintech upstarts…