FinCEN issued guidance clarifying that banks may share real-time fraud alerts and broader data with one another under Section 314(b) of the Patriot Act, with liability safe harbor protection. The guidance expands the scope of shareable information to include transaction alerts, suspicious activity indicators, mobile device identifiers, and internal paperwork.
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
State regulators expressed “significant concerns” with Treasury’s plan to use OCC rules as the baseline for assessing state stablecoin regimes. New York’s DFS argued the approach “undermines” the state pathway Congress preserved, while the Conference of State Bank Supervisors said it “would swing stablecoin regulation toward a one-size-fits-all federal framework.”
The OCC issued an interpretive letter confirming that Fidelity’s crypto-focused trust bank can operate nationwide without state money transmitter licenses. The OCC held that state licensing laws are preempted by the National Bank Act because they would “prevent or significantly interfere” with federally authorized activities. This is a major preemption
The Fed, FDIC, and OCC reissued 15 longstanding guidance documents removing all references to reputation risk. The agencies said the concept can be “misused by supervisors to encourage or pressure a bank to restrict individuals’ and legal businesses’ access to financial services.” This follows earlier rulemakings codifying prohibitions against reputation
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
