The Fed, FDIC, and OCC jointly confirmed that tokenized securities receive identical capital treatment to their traditional counterparts. The agencies emphasized that bank capital rules are “technology neutral,” putting a security on a blockchain does not change its risk-weight. The capital rules apply the same way whether the security is recorded
The OCC released a 376-page proposed rule implementing the GENIUS Act, establishing licensing, prudential standards, and activity limits for payment stablecoin issuers. Significantly, the OCC adopts a rebuttable presumption that affiliate or third-party agreements designed to replicate yield violate the statutory ban on interest. The agency is clearly watching for
The OCC finalized rules effective April 1 allowing national trust banks to engage in non-fiduciary activities like digital asset custody. Over 10 fintechs have received conditional approvals. More are coming, allowing them to operate nationwide under a single federal regulator without full deposit insurance or CRA obligations. The real threat
Despite headlines about office sector stress, the broader commercial real estate (CRE) market is stabilizing through disciplined collaboration between lenders and borrowers. Loan modifications and sophisticated restructurings are preferred over foreclosures. Regulators are watchful but not sounding alarms. For community banks with CRE concentrations, the emphasis is on proactive engagement.
Federal banking agencies are fundamentally recalibrating their supervisory approach. There is a concerted move away from process-oriented examinations and subjective factors (like reputation risk) toward a targeted focus on identifying and remediating material financial risks. This includes updated examination ratings that prevent non-financial weaknesses from disproportionately driving downgrades. For banks, this
The regulatory stance on bank-fintech partnerships has become more permissive, particularly regarding digital assets. Agencies have rescinded prior approval requirements for crypto-related activities and narrowed the CFPB’s focus. However, fundamental guidance on third-party risk management remains in full force. For community banks, partnerships can offer innovation and reach but require
Key Senate committees have postponed markups of a comprehensive crypto market structure bill, citing the need for more bipartisan negotiation. The latest draft attempts to address contentious issues like decentralized finance (DeFi) and stablecoin yields, proposing a compromise that would allow transaction-based rewards but prohibit passive interest payments. Significant disagreements
Data confirms that 2025 was one of the most active years for bank mergers and acquisitions in recent history, driven by a significantly more favorable regulatory environment. Regulators have rescinded restrictive 2024 merger policy statements, approval timelines have shortened, and supervisory focus has shifted away from subjective factors like reputation
The FDIC has released its first major rule proposal under the Genius Act, outlining how FDIC-supervised banks can apply to issue payment stablecoins through a subsidiary. The proposal establishes a “tailored application process” requiring a detailed letter application, financial projections, redemption policies, and compliance plans. The FDIC aims to decide on
Banking trade groups are actively lobbying Congress to explicitly prohibit interest or “reward” payments on stablecoins. They argue that such yields could draw deposits away from traditional banks, threatening the local lending that fuels community economies. While last year’s Genius Act set a framework for stablecoins, a debate persists over whether its
