OCC Proposes Rule on BSA and Sanctions Compliance for PPSIs
The Office of the Comptroller of the Currency (OCC) has issued Bulletin 2026–28, “GENIUS Act: Anti-Money Laundering/Countering the Financing of Terrorism and Sanctions Compliance,” to announce a proposed rulemaking to implement Bank Secrecy Act (BSA) and sanctions compliance standards applicable to OCC-supervised permitted payment stablecoin issuers (PPSIs), as required by the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act).
Comments on the proposed rule, which would apply to federal qualified payment stablecoin issuers and to state qualified payment stablecoin issuers for which the OCC has regulatory or enforcement authority under the GENIUS Act, will be accepted for 30 days after publication in the Federal Register.
The proposal would:
- Require OCC-supervised PPSIs to comply with the BSA, sections 4(a)(5) and 4(a)(6)(B) of the GENIUS Act, and applicable regulations issued by FinCEN and OFAC, including any anti-money laundering and countering the financing of terrorism (AML/CFT) program, sanctions program, and reporting requirements.
- Create a supervision and enforcement framework for OCC-supervised PPSIs’ AML/CFT programs.
- Establish a framework for consultation between the OCC and Financial Crimes Enforcement Network (FinCEN) when the OCC intends to initiate an AML/CFT enforcement action or a significant AML/CFT supervisory action.
- Permit PPSIs to share with the FinCEN Director certain nonpublic OCC information relating to an existing or potential AML/CFT enforcement action or significant AML/CFT supervisory action.
FinCEN and Agencies Propose GENIUS Act CIP Rule
The Department of the Treasury’s FinCEN has joined the OCC, the Federal Reserve Board, the Federal Deposit Insurance Corporation (FDIC), and the National Credit Union Administration (NCUA) in issuing a joint proposed rule to implement provisions of the GENIUS Act.
The GENIUS Act directs that permitted payment stablecoin issuers be treated as financial institutions under the Bank Secrecy Act and be required to maintain effective customer identification programs. The proposal seeks to provide an appropriately tailored regime that mitigates potential illicit finance risks while protecting the U.S. financial system and national security interests.
EEOC Pulls Affirmative Action Regulations
The Equal Employment Opportunity Commission (EEOC) has published [91 FR 40879] in the Federal Register a final interpretive rule to rescind its regulations regarding Affirmative Action Appropriate Under Title VII of the Civil Rights Act of 1964 (“Guidelines”), and removing it from the Code of Federal Regulations. The Commission is rescinding the Guidelines and removing them from the Code of Federal Regulations because the Guidelines are inconsistent with the statutory language and were not supported by Supreme Court precedent when issued; they are obsolete; they only apply to affirmative action to benefit women or minorities; and they do not take into account multiple relevant Supreme Court cases and numerous developments in the lower courts, over the past four decades since their issuance in 1979.
This final interpretive rule, which removes and reserves 29 CFR part 1608, became effective on publication and applicable as of June 29, 2026.
Agencies Finalize Changes to Community Bank Leverage Ratio
The OCC, FDIC, and Federal Reserve Board have jointly announced a finalized rule to modify the community bank leverage ratio consistent with existing statutory authority. This change will provide community banks with greater flexibility to use a simpler measure of capital adequacy and reduce regulatory burden. The final rule takes into account the unique business models and risk profiles of community banks.
The final rule is being adopted without change from the proposal issued in November 2025. The rule will lower the community bank leverage ratio from 9 percent to 8 percent, which will provide more flexibility for community banks to opt into the framework. The final rule also extends the grace period from two quarters to four quarters for a community bank that temporarily falls out of compliance. The framework continues to simplify regulatory capital requirements for community banks by allowing them to adopt a relatively simple leverage ratio to measure capital adequacy, rather than calculating and reporting risk-based capital ratios.
Community banks that opt into the framework will be subject to a capital requirement that continues to promote safety and soundness. Under the framework, banks must maintain a leverage ratio that is significantly higher than the leverage ratio standard otherwise applicable to community banks.
CFPB Issues Final Rule Amending Reg B
The Consumer Financial Protection Bureau (CFPB) has submitted to the Federal Register a final rule that will amend provisions related to disparate impact, discouragement of applicants or prospective applicants, and special purpose credit programs under Regulation B, the regulation implementing the Equal Credit Opportunity Act (ECOA or Act). The amendments facilitate compliance with ECOA by clarifying the obligations imposed by the statute. The rule became effective July 21, 2026.
NCUA Publishes 11 Final Regulatory Changes
The National Credit Union Administration has published in the Federal Register 11 rules resulting from its Deregulation Project, all of which became effective as of September 8, 2026.
- Rescission of Interpretive Ruling and Policy Statement (IRPS) 06-1, because its topic, the requirements for adding underserved areas, is also covered in the NCUA Chartering Manual
- Rescission of IRPS 08-2, also redundant and for the same reason
- Rescission of IRPS 10-1 on chartering requirements for federal credit unions, also redundant because the requirements are also found in the Chartering Manual
- Rescission of IRPS 11-02, which addresses chartering corporate credit unions, because it is redundant to the Federal Corporate Credit Union Chartering Manual
- Revisions of its regulations governing the organization and operation of federal credit unions (FCUs) by eliminating a provision related to credit union service contracts. Affects 12 CFR Parts 701 and 721
- Removal from 12 CFR Part 701 of the regulations related to approval and policies on making loans to other credit unions
- Amending 12 CFR Part 741, the regulation that establishes the requirements for obtaining and maintaining federal share insurance with the National Credit Union Share Insurance Fund, by amending the provision on the timing of prior notice provided to members of the termination of excess non-federal insurance coverage.
- Amending 12 CFR Parts 701 and 746 to streamline the NCUA Board’s regulations governing the purchase, sale, and pledge of eligible obligations. Specifically, the final rule removes the prescriptive lists of items that must be addressed in the written policies adopted by a federal credit union (FCU).
- Amending 12 CFR Part 741 that establishes the requirements for obtaining and maintaining federal share insurance with the National Credit Union Share Insurance Fund, top eliminate unnecessary and redundant requirements related to disclosing when nonmember accounts are not covered by federal share insurance.
- Amending 12 CFR Part 701 to eliminate prescriptive segregated deposit and collateral requirements for suretyship and guaranty agreements.
- Amending 12 CFR Parts 701, 741, and 746 to remove NCUA’s unnecessarily prescriptive regulation regarding third-party servicing of indirect vehicle loans.
OFAC Rule to Update and Correct its Regulations
Office of Foreign Assets Control (OFAC) has published [91 FR 46836] a final rule to update website and contact information in several parts of the Code of Federal Regulations; to amend 31 CFR Part 546 to update general licenses authorizing payments for legal services from funds originating outside the United States to replace the reporting requirement in the general license with a recordkeeping requirement; to correct an erroneous cross-reference in Part 526; and to amend Parts 553 and 598 to correct typographical errors. Effective as of July 27, 2026.
FinCEN Ends BOI Rule for U.S. Businesses and Persons
On March 25, 2025, FinCEN issued an interim final rule that narrowed beneficial ownership reporting under the Corporate Transparency Act, exempting U.S. companies from reporting the beneficial ownership information (BOI) of U.S. person beneficial owners. On August 11, 2026, FinCEN issued a final rule that was effective on August 14, 2026, in the Federal Register that exempts domestic reporting companies from any BOI reporting requirements; it also exempts foreign reporting companies from having to report the BOI of any U.S. person who is a beneficial owner or company applicant of the foreign reporting company, and to exempt U.S. persons from having to provide such information to a reporting company for which the U.S. person is a beneficial owner or company applicant. In addition, the final rule exempts all U.S. persons from the requirement to update information already provided to FinCEN in connection with obtaining a FinCEN identifier (FinCEN ID).
FDIC Announces Approval of Two Rules
The FDIC Board has announced its approval of two rules.
- Unsafe or Unsound Practices, Matters Requiring Attention—A final rule to define the term “unsafe or unsound practice” for purposes of section 8 of the Federal Deposit Insurance Act and to revise the supervisory framework for the issuance of matters requiring attention and other supervisory communications. This rule will amend FDIC regulations at 12 CFR Part 305. This rule, which is being jointly issued with the OCC. Effective date of November 2, 2026.
- Road to Housing Act: Reciprocal Deposits—An interim final rule and request for comment amending its brokered deposit regulations at 12 CFR Part 337 to conform with recent changes to section 29 of the Federal Deposit Insurance Act made by section 902 of the 21st Century ROAD to Housing Act related to reciprocal deposits, which took effect on July 11, 2026. The FDIC is also providing certain clarifications regarding the reciprocal deposit framework to facilitate and simplify compliance. Effective date of this interim final rule is September 1, 2026.
OCC Act to Improve Transparency and Consistency of Standards
The OCC has announced additional actions to focus supervisory attention on the most significant risks and violations and to provide banks with greater clarity, consistency and certainty in how Matters Requiring Attention (MRA) and enforcement actions are issued.
In connection with the final rule regarding unsafe or unsound practices and MRAs issued jointly with the FDIC, the OCC has substantially revised its policies and procedures manuals (PPMs) regarding enforcement actions and MRAs.
Revisions to PPM 5310-3, “Bank Enforcement Action and Related Matters,” emphasize material financial risks, and highlight OCC’s three guiding principles when considering bank enforcement actions—escalation, tailoring, and focusing corrective actions on those essential to address specific deficiencies.
In addition to focusing banks’ and examiners’ attention on issues that materially affect safety, soundness, and compliance with laws and regulations, these revisions also ensure enforcement tools are used proportionately and predictably. Under the revision, the OCC may escalate to an enforcement action against a large or complex bank based on practices that would not trigger a similar response against a community bank – reflecting the increased regulatory and supervisory expectations for large or complex banks in the revised enforcement approach.
OCC Act to Improve Transparency and Consistency of Standards (Continued)
Additionally, the OCC is releasing PPM 5400-11, “Matters Requiring Attention,” publicly for the first time to provide greater clarity and transparency regarding its supervisory standards.
Revisions to this PPM reflect the supervisory framework in the joint final rule and clarify the OCC will only issue an MRA for practices, acts, or failures to act that meet the listed standard. The PPM also directs that MRAs must be tailored based on financial risk-related factors.
Along with the revised PPMs, the OCC released for public comment a notice of proposed rulemaking to codify its supervisory framework for the issuance of MRAs in response to violations of laws or regulations.
FDIC Updates Compliance Exam Manual
The FDIC has updated the following sections of its Consumer Compliance Examination Manual (CEM) to make it consistent with its final Part 305 rule on Unsafe or Unsound Practices, Matters Requiring Attention:
- Documenting the Examination (II-7)
- Investigations and Visitations (II-8)
- Appeals (II-11)
- Home Mortgage Disclosure Act (V-9)
- Small-Dollar Lending (V-17)
The Bank of Anytown (III-2) Examination Template was removed from the website.
Federal Reserve Improvements to Borrower in Custody program
The Federal Reserve System has announced updates to its Borrower in Custody (BIC) program as part of an ongoing effort to modernize discount window operations. Through the BIC program, eligible institutions may pledge a wide variety of loan types to maximize liquidity while maintaining possession of the collateral. Effective September 8, 2026, the following changes were made:
- Faster enrollment – Most institutions will no longer be required to have pre-enrollment inspections.
- Automated pledged loan lists – Collateral schedules can be uploaded online via Discount Window Direct
- Modified maintenance – Simplified instructions, fewer reports from borrowing institutions
- Focused inspections – Restructured to focus on 1) validation of data quality, 2) satisfaction of acceptance criteria for pledged loans, and 3) confirmation of internal controls to ensure pledged loans are identified as pledged.
- Centralized resources on the discount window website
FinCEN reissues GTO for MSBs along SW border
FinCEN has announced it has reissued a Geographic Targeting Order (GTO) to help law enforcement combat illicit activity and associated money laundering by Mexico-based cartels and other criminal actors along the southwest border of the United States. The GTO subjects certain money services businesses (MSBs)—which provide financial services outside of a formal bank—to enhanced reporting requirements with FinCEN.
The reissued GTO requires MSBs to file Currency Transaction Reports with FinCEN for cash transactions between $1,000 and $10,000 occurring in specific ZIP codes in Bernalillo, Dona Ana, and San Juan counties in New Mexico, and Cameron, El Paso, Hidalgo, Maverick, and Webb counties in Texas. The terms of this GTO are effective for 180 days after publication in the Federal Register, according to FinCEN’s press release. The order, however, indicates it is effective September 3, 2026, but the compliance date for persons that were not Covered Businesses under the Geographic Targeting Order published by FinCEN on March 10, 2026 (91 FR 11456) is October 3, 2026 (the reissued GTO adds more ZIP Code areas to its definition of “Covered Businesses”).
Regulation O Modernization Proposal (Federal Reserve)
The Federal Reserve Board issued a proposed rule for public comment that would comprehensively update Regulation O for the first time since 1979. The proposal is intended to modernize insider lending requirements, reduce unnecessary regulatory burden, codify existing statutory requirements and long-standing interpretations, and improve the overall usability of the regulation.
Key proposed changes include:
- Updating and indexing several outdated dollar-based thresholds, including increasing:
- The amount of certain credit card debt that is exempt from the definition of “extension of credit,” from $15,000 to $60,000.
- The amount of indebtedness arising from certain interest-bearing overdrafts associated with preauthorized credit plans that are exempt from the definition of “extension of credit,” from $5,000 to $20,000.
- The exception from the prohibition against paying an overdraft to an executive officer or director for certain inadvertent overdrafts, from $1,000 to $4,000.
- The “other purpose” exception for unsecured lending to executive officers, from $100,000 to $400,000.
- The size of an extension of credit that requires prior approval by a bank’s board of directors, from $500,000 to $2 million.
- The threshold for public disclosure of loans to executive officers and principal shareholders, from $500,000 to $2 million.
- Modifying the regulation’s treatment of certain investment fund portfolio companies. Under the proposal, qualifying portfolio companies of fund groups that are principal shareholders of a bank would generally no longer be considered insiders for Regulation O purposes, reducing compliance burdens associated with tracking and applying insider lending restrictions.
- Incorporating Dodd-Frank Act provisions related to derivatives, securities financing transactions, and certain asset purchases and sales involving insiders into Regulation O.
- Clarifying definitions, exemptions, and regulatory interpretations to enhance transparency and streamline compliance.
The proposal remains subject to the notice-and-comment rulemaking process and is not yet effective.
Joint Statement on Suspicious Activity Report Confidentiality Considerations Regarding Communications with Customers
The Board of Governors of the Federal Reserve System, the FDIC, the NCUA, and the OCC (collectively, the Agencies), and the FinCEN are issuing this statement to clarify confidentiality requirements related to Suspicious Activity Reports (SARs). This joint statement is particularly relevant when banks communicate with their customers regarding potentially fraudulent transactions, other suspicious activity (e.g., payment fraud, including check fraud), or account closures.
Statement of Applicability: The contents of, and material referenced in, this Financial Institution Letter apply to all FDIC-insured financial institutions.
Highlights:
- The Bank Secrecy Act (BSA) prohibits the disclosure of a SAR or information that would reveal the existence of a SAR, including to a customer or other person who is the subject of the SAR. However, the joint statement clarifies that the BSA and its implementing regulations do not prohibit banks from communicating with a customer or other person who is the subject of a SAR or with other third parties, including other banks, about potentially fraudulent or other suspicious transactions involving the customer’s account or notifying the customer of the bank’s intention to close the account for potentially fraudulent or other suspicious activity, so long as that communication does not reveal the existence of a SAR.
- In general, banks should consider customer communication on a case-by-case basis and take precautions when discussing information that could reveal the existence of a SAR.
Agencies Seek Comment on Proposed Third-Party Risk Management Guidance and Issue Statement on Community Bank Engagement with Core Service Providers
In September 2026, the FDIC, the Federal Reserve Board, the NCUA, and the OCC (collectively, the agencies) requested comment on proposed guidance to assist financial institutions with managing risks associated with third-party relationships.
The proposed guidance reflects the agencies’ supervisory experience and lessons learned from examining financial institutions’ third-party risk management practices. It is intended to assist banks and credit unions to better align and tailor their third-party risk management practices to the risks of individual third-party relationships. The proposed guidance focuses on a principles-based approach and, as with all supervisory guidance, is non-binding.
When finalized, the federal bank regulatory agencies plan to rescind existing third-party risk management guidance and replace it with the finalized guidance to promote consistency and prudent innovation in the banking industry.
Comments on the proposed guidance are due 60 days after publication in the Federal Register.
Separately, the federal bank regulatory agencies are issuing a statement on community banks’ engagement with core service providers. The statement discusses certain factors the agencies will consider in making supervisory and enforcement decisions related to these core providers.
Also in September 2026, the Federal Reserve Board separately requested comment on a proposed third-party risk management guide specifically for Federal Reserve-supervised community banks, which is intended to serve as a companion document to the proposed guidance.
