FinCEN’s April 7 proposed rule overhauling the Bank Secrecy Act and AML/CFT program requirements across all financial institutions — not just banks — continued to generate significant analysis through May. Comments closed June 9. The proposal is the most significant rewrite of AML program standards in years and introduces several
May 2026 brought the most consequential month yet for financial regulation under the current administration. A new Fed chair was confirmed under unusual circumstances. The Clarity Act cleared committee for the first time ever, even as the ethics impasse that could still sink it on the Senate floor remains unresolved.
As previewed in last month’s newsletter, legal challenges to the CFPB’s April fair lending rule eliminating disparate-impact liability under ECOA arrived quickly. The National Fair Housing Alliance, Rise Economy, and two fair lending compliance firms filed suit in D.C. federal court on May 27, challenging the rule as “arbitrary and
The Federal Reserve voted 6-1 on May 20 to advance a formal proposal creating a new category of “payment accounts” that would give fintech firms and other non-traditional institutions direct access to Fed payment rails, without the full scope of a master account. The proposal follows President Trump’s executive order
The OCC issued a consent order against Community Federal Savings Bank (CFSB), a small New York-based bank with under $1 billion in assets, citing serious AML deficiencies tied to its fast-growing payment-processing business. CFSB has roughly quadrupled in size since 2020 after launching a merchant-acquiring division and positioning itself as
The FDIC issued a proposed rule on May 22 codifying that stablecoin issuers under its supervision must comply with Bank Secrecy Act, AML, and OFAC sanctions requirements. It also establishes a 30-day advance notice requirement for the FDIC to consult with FinCEN before initiating enforcement action over AML or sanctions
The Senate confirmed Kevin Warsh as the next Federal Reserve Chair on May 13, on a 54-45 vote that fell almost entirely along party lines (only Sen. John Fetterman crossed over). Warsh — a former Fed governor, lawyer, and financier — took over from Jerome Powell when Powell’s term as
The Federal Financial Institutions Examination Council formally proposed revisions to the Uniform Financial Institutions Rating System (UFIRS) — the CAMELS framework — in late May, following months of public previews from Fed Vice Chair for Supervision Michelle Bowman. The proposal is the first major update to the CAMELS system in
On May 19, President Trump signed two executive orders with direct banking implications. The first directs Treasury Secretary Bessent and financial regulators to review legal and regulatory frameworks governing Fed payment account access for uninsured depository institutions and fintech companies — timing that landed one day before the Fed’s own
The 60-day comment period on the OCC’s 376-page Genius Act implementation proposal closed in early May. The OCC’s proposal covers stablecoin issuance, redemption, reserve management, custody standards, and yield restrictions for the issuers under its oversight, which includes national bank-owned issuers, federally licensed nonbanks, larger state-chartered issuers, and foreign issuers
