Forvis Mazars has summarized this month’s activity in the U.S. banking regulatory landscape to help you keep up to speed on this quickly evolving regulatory environment.
It was a relatively quiet month; nonetheless, several meaningful and noteworthy events took place that deserve attention. On Capitol Hill, President Donald Trump signed a series of executive orders ranging from targeting debanking to expanding the permissibility of 401(k) and retirement plans to offer investments in alternative assets. The banking agencies did not engage in rulemaking activity. However, the Federal Reserve Board’s novel activities supervision program was sunset, and the FDIC clarified Customer Identification Program (CIP) requirements. Read about this and more in the following summary of activities in the U.S. banking regulatory world.
Navigating the Evolving U.S. Banking Regulatory Landscape: Key Highlights From August 2025
The U.S. banking regulatory environment saw a few developments in August 2025, spanning legislative, supervisory, and international fronts. Here are the quick hits:
- On Capitol Hill
- Trump signed executive orders targeting “debanking” and clearing the way for alternative assets to be offered as permissible investments in employee retirement plans.
- Federal Reserve Updates
- The Federal Reserve Board announced it will sunset its novel activities supervision program.
- Office of the Comptroller of the Currency (OCC) Initiatives
- Issued its latest Bank Accounting Advisory Series outlining interpretations of accounting topics relevant to national banks and federal savings associations.
- Released results of national banks and federal savings associations examined for Community Reinvestment Act (CRA) compliance.
- FDIC Developments
- Issued the latest quarterly banking profile highlighting bright spots and pain points in the condition and performance of FDIC-insured banks and savings institutions.
- Proposed amendments to the official signs and advertising requirements.
- Clarified its stance on the use of pre-populated customer information to satisfy CIP requirements.
- Released results of FDIC-regulated banks evaluated for CRA compliance.
- Consumer Financial Protection Bureau (CFPB)
- Proposed a rule to define “risks to consumers” and limit its authority to designate non-bank firms for supervision.
- The agency is seeking public comment on potential revisions to its Personal Financial Data Rights rule of Section 1033 of the Dodd-Frank Act. In addition, it is seeking comment to review the definition of “larger participants” across the automobile financing, consumer reporting, consumer debt collection, and international money transfer markets.
- SEC Updates
- Provided guidance to help broker-dealers implement the customer protection rule under Rule 15c3-3a.
- Clarified its position on liquid staking.
- FASB Updates
- Refined guidance for accounting for environmental credit programs.
- U.S. Small Business Administration (SBA) Notes
- Sent a letter to its network of lenders instructing them to end “debanking” in alignment with Trump’s executive order.
On Capitol Hill
On August 7, 2025, Trump signed a series of executive orders that impact financial institutions.
First, Trump signed Executive Order 14331 prohibiting financial institutions from denying or restricting services based on political beliefs, religious beliefs, or lawful business activities. The move is in response to recent calls for protections against debanking, when a bank refuses to provide financial services because of the political or religious beliefs held by the customer or business that is denied service. The order issues several directives targeted at the federal banking agencies, SBA, and the U.S. Department of the Treasury. For more information, see our FORsights™ article, “Presidential Action Signed Targeting Debanking.”
Next, the president signed Executive Order 14330, clearing the way for 401(k) and related employee retirement plans to include investments in alternative assets such as private equity, real estate, and digital assets, among others. The move aims to broaden diversification and boost risk-adjusted returns for participants. The order directs the U.S. Department of Labor, in consultation with the Secretary of the Treasury and the SEC, to re-examine its guidance regarding a fiduciary’s duties under the Employee Retirement Income Security Act of 1974 (ERISA) to clear the path for participation in asset allocation funds that include investments in alternative assets.
Federal Reserve Board
Federal Reserve Board Sunsets Its Novel Activities Supervision Program
On August 15, 2025, the Federal Reserve Board (Board) announced it will sunset its novel activities supervision program. Originally established through Supervision and Regulation Letter 23-7 (SR 23-7), the program aimed to enhance supervision of activities within banks, specifically, novel activities related to crypto assets, distributed ledger technology (DLT), and complex, technology-driven partnerships with non-banks to deliver financial services to customers. Under this notice, the Board is rescinding SR 23-7 and will return to monitoring banks’ novel activities through the normal supervisory process moving forward.
Office of the Comptroller of the Currency
The OCC Updates Its Bank Accounting Advisory Series
On August 15, 2025, the OCC issued its annual update to the Bank Accounting Advisory Series (BAAS). The BAAS outlines the Office of the Chief Accountant’s interpretations of GAAP and regulatory guidance for accounting topics relevant to national banks and federal savings associations.
The OCC Issues List of Banks Examined for CRA Compliance
On August 1, 2025, the OCC released its list of results of the national banks and federal savings associations evaluated for CRA compliance. In total, 15 institutions were assessed during the period. For a complete list of banks examined for CRA compliance, visit the OCC’s website.
Federal Deposit Insurance Corporation
The FDIC Releases Its Quarterly Banking Profile
On August 26, 2025, the FDIC released its Quarterly Banking Profile (QBP), highlighting the condition and performance of insured depository institutions (IDIs) for the second quarter of 2025. Despite some weakness in the CRE and credit card portfolios and a continuation of unrealized losses on securities, the industry outlook appears favorable as capital and liquidity levels remain strong to support lending and shield against potential losses, and overall asset quality is satisfactory.
Domestic deposits increased for the fourth consecutive quarter. Loan growth accelerated across several portfolios, e.g., 1-4 Family, CRE, etc., with the largest increases in loans to non-depository financial institutions and loans to purchase or carry securities.
Aggregate net income declined approximately 1% compared to the first quarter of 2025 as provision expenses were pushed higher. However, this aggregate decline was primarily attributed to a single large bank acquisition, which required the acquiring institution to recognize a provision as a buffer for certain acquired assets under accounting standards. Absent this provision expense, aggregate net income would have increased for the period driven by net interest and non-interest income.
The number of problem banks fell from 63 to 59, while the total number of FDIC-insured institutions declined by 41 to 4,421, primarily driven by merger activity.
FDIC Proposes Amendments to Official Signs & Advertising Requirements
On August 19, 2025, the FDIC board of directors approved a proposed rule to amend signage requirements under 12 CFR 328.4 and 328.5. The action pivots away from the 2023 Final Rule requirements and aims to minimize potential operational challenges faced by institutions implementing the 2023 Final Rule. The proposed rule looks to reduce burden and address potential consumer confusion with respect to signage requirements for digital deposit-taking channels, automated teller machines (ATMs), and similar devices. Updates are proposed within the following areas:
- FDIC Official Digital Sign: Provides institutions with additional flexibility with respect to the color, font, and size that may be used when displaying the official FDIC digital sign.
- Digital Deposit-Taking Channels: Streamlines requirements by:
- Eliminating the requirement to display the digital sign on landing pages and pages where a customer can transact with deposits;
- Requiring display of the digital sign on the page where a customer initiates a deposit account opening;
- Narrowing the display of the non-deposit signage to pages primarily dedicated to non-deposit products; and
- Permitting the one-time notification for bank customers related to third-party, non-deposit products to automatically disappear after a minimum amount of time.
- ATMs & Similar Devices: Narrows the display of the digital sign and non-deposit signage to the initial screen and initial non-deposit transaction screen, respectively. In addition, the proposal permits a wider range of ATMs and similar devices to display the physical FDIC official sign rather than the FDIC digital sign.
If adopted, the compliance date would be January 1, 2027. Institutions can provide comments on the proposed changes through October 20, 2025.
FDIC Clarifies Its Approach Regarding CIP Requirements
On August 5, 2025, the FDIC issued Financial Institution Letter (FIL) 39-2025 to clarify its stance on the use of pre-populated customer information at account opening to satisfy the requirements under the CIP. The FIL notes that financial institutions may use pre-populated customer information from current or prior accounts or relationships involving the bank or its affiliates and agents, e.g., third-party vendors, to pre-fill information that is reviewed and submitted by the customer. With respect to this interpretation, the examiners will consider the following in their review:
- The customer has the opportunity to review, correct, update, and confirm the accuracy of their information; and
- The institution’s processes for opening an account that involves pre-populated information allow the institution to form a reasonable belief as to the identity of its customer and are based on the institution’s assessment of the relevant risks, including the risk of fraudulent account opening or takeover.
The FDIC Issues List of Banks Examined for CRA Compliance
On August 5, 2025, the FDIC released its periodic statement presenting the results of the FDIC-regulated banks recently evaluated for CRA compliance. In total, 69 institutions were assessed during the period. For a complete list of banks examined for CRA compliance, visit the FDIC’s website.
Consumer Financial Protection Bureau
CFPB Proposes Rule to Define “Risks to Consumer”
On August 26, 2025, the CFPB issued a proposal to adopt a standard definition of “risks to consumers with regard to the offering or provision of consumer financial products or services” to determine when a non-bank covered person should be subject to the agency’s supervision. Section 1024 of the Consumer Financial Protection Act of 2010 (CFPA) authorizes the CFPB to supervise a non-bank covered person that poses “risks to consumers”; however, a formal definition for “risks to consumers” does not currently exist. Historically, the agency has considered this issue on a case-by-case basis, which has prompted industry concerns that the ad hoc nature of individual orders opens the door for inconsistent application of the definition and the lack of clarity in how the definition would be applied as previous precedents may not align with new contexts or conform to individual cases in the context of the regulation.
The proposed rule seeks to clearly define the phrase “risks to consumers” as conduct that:
- Presents a high likelihood of significant harm to consumers; and
- Is directly connected to the offering or provision of a consumer financial product or service as defined in section 1002 of the CFPA.
If adopted, the rule could limit the CFPB’s reach from broad application that arguably could include speculative or minor harm to a more narrowly focused application focusing on the risk of serious harm. Fewer firms may find themselves in the agency’s supervisory line of sight under the proposed rule, which could increase confidence to expand into new partnerships, products, or services without provoking CFPB oversight.
The comment period for the notice ends on September 25, 2025.
CFPB Revisits “Open Banking” Rule
On August 22, 2025, the CFPB issued an advance notice of proposed rulemaking (ANPRM) seeking public comment on potential revisions to its Personal Financial Data Rights (PFDR) rule under Section 1033 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (§1033). The PFDR rule, finalized in October 2024, requires data providers to make covered data regarding covered financial products and services available to consumers and authorized third parties, subject to a number of requirements, and sets the criteria a third party must meet to be considered an authorized third party. However, the rule was swiftly contended and has been tied up in litigation since its issuance.
The action signals a pivot for the agency. With the issuance of the ANPRM, the CFPB is exploring the following four key issues as it gathers data for potential revisions to the PFDR rule:
- Defining who can serve as a “representative” making a request on behalf of the consumer;
- The optimal approach to the assessment of fees to defray the costs incurred by a “covered person” in responding to a customer-driven request;
- Data security associated with §1033 compliance; and
- Consumer data privacy associated with §1033 compliance.
At present, no new guidance is proposed or issued. The comment period for the notice ends on October 21, 2025.
CFPB Issues Four Advance Notices of Proposed Rulemaking
On August 8, 2025, the CFPB issued four ANPRMs inviting public comment for defining “larger participants” across the automobile financing, consumer reporting, consumer debt collection, and international money transfer markets. The definition criteria are being re-examined to ensure they are right sized for current industry conditions and do not impose excessive compliance burdens, especially on smaller entities. A summary of each proposal is outlined below:
| ANPRM Title | Current Definition | CFPB Proposal Consideration |
|---|---|---|
| Defining Larger Participants of the Automobile Financing Market | Under the 2015 Automobile Financing Larger Participant Rule, a non-bank covered person qualifies as a “larger participant” if they have at least 10,000 aggregate annual originations. | The number of “larger participants” in the automobile financing market subject to supervision may be too broad. By raising the threshold, the CFPB could focus its supervisory oversight on the most active market participants with the highest consumer interaction. |
| Defining Larger Participants of the Consumer Reporting Market | Under the 2012 Consumer Reporting Larger Participant Rule, a non-bank covered person is a “larger participant” if they have more than $7 million in annual receipts resulting from relevant consumer reporting activities. | CFPB examinations have largely focused on entities with annual receipts that significantly exceed the $7 million threshold. Furthermore, a majority of the consumer reporting companies examined have had annual receipts exceeding $50 million. Based on these results, increasing the annual receipts threshold to match the SBA annual revenue threshold, i.e., $41 million, could yield a more accurate picture of “larger participant” as six entities would qualify in this market. |
| Defining Larger Participants of the Consumer Debt Collection Market | Under the 2012 Consumer Debt Collection Larger Participant Rule, a non-bank covered person is a larger participant in the consumer debt collection market if they have more than $10 million in annual receipts resulting from consumer debt collection activities. | The CFPB is concerned that its standard may be outdated, especially given the SBA threshold for collections agencies, i.e., $19.5 million. Increasing the annual receipts threshold to $25 million would result in approximately 125 “larger participants” that control up to 70% of the total revenues reported for the covered debt collection industry. |
| Defining Larger Participants of the International Money Transfer Market | Under the 2014 International Money Transfer Larger Participant Rule, a non-bank covered person qualifies as a “larger participant” if they have at least 1 million aggregate annual international money transfers. | The CFPB is concerned that smaller international money transfer providers that are considered “larger participants” are being disproportionately impacted by the current threshold. By raising the threshold, the CFPB could focus its supervisory oversight on the market participants that send the greatest number of transfers and that likely interact with the largest numbers of consumers. |
Currently, no new guidance is proposed or issued. The comment period for all four notices ends on September 22, 2025.
Securities & Exchange Commission
SEC Issues FAQs to Help Broker-Dealers Implement Requirements Under U.S. Treasury Clearing
On August 6, 2025, the SEC’s Division of Trading and Markets released responses to Frequently Asked Questions (FAQs) that broker-dealers have posed regarding rule amendments to the customer protection rule under Rule 15c3-3a. Organizations are reminded that the responses within the FAQs serve as interpretive guidance from the division.
SEC Issues Staff Statement on Certain Liquid Staking Activities
On August 5, 2025, the SEC’s Division of Corporation Finance issued a staff statement clarifying its position on liquid staking, where owners deposit covered crypto assets with a third-party protocol staking provider and receive one-for-one tokens, i.e., staking receipt tokens, evidencing the depositors’ ownership. Under the statement, liquid staking activities do not constitute offers or sales of securities under the Securities Act of 1933 or the Securities Exchange Act of 1934. As such, banks and financial institutions engaging with liquid staking tokens as collateral or in secondary-market transactions are exempt from SEC registration requirements with respect to these activities. Entities considering more complex dealings that involve entrepreneurial or managerial functions beyond token mining and distribution may be subject to registration requirements and are advised to seek interpretive guidance from the agency, where applicable.
U.S. Small Business Administration
SBA Orders Lenders to End Practice of Debanking
On August 26, 2025, the SBA sent a letter to its network of lenders directing them to end unlawful or politically motivated “debanking.” The move is in response to Executive Order 14331. The letter requires its lenders to perform a lookback by December 5, 2025 to:
- Identify policies and practices that required or encouraged politicized or unlawful debanking;
- Identify and reinstate any previous clients, and their subsidiaries, that were denied access to services or payment processing as a result of politicized or unlawful debanking; and
- Issue a reinstatement notice for all impacted parties.
Institutions must submit a report to the SBA by January 5, 2026 evidencing their compliance with the directives noted. Lenders that fail to comply with the order or miss the reporting deadline may risk losing access to SBA programs and other punitive measures. For more information, see our article, “SBA Orders Lookbacks to Fight Debanking.”
Financial Accounting Standards Board
A Summary of FASB’s Board Meeting: Clarity on Accounting for Environmental Credit Programs
At its August 13, 2025 meeting, FASB focused on refining guidance for accounting for environmental credit programs, confirming that environmental credits are enforceable rights acquired, internally generated, granted by a regulatory agency or its designee(s), or received in a non-reciprocal transfer that meets each of the criteria set forth. Furthermore, FASB clarified that these credits should be accounted for under Topic 818, Environmental Credits and Environmental Credit Obligations, rather than under the accounting standards for goodwill, commodities, nonprofits, or derivatives. FASB affirmed amendments related to recognition, initial and subsequent measurement, and derecognition, among other items. The standard requires full retrospective application to opening equity, classifying credits at initial application, and measuring obligations under the new guidance. Early adoption is permitted, with public companies applying the standard for fiscal years beginning after December 15, 2027 and other entities for years after December 15, 2028. For more information, see our article, “FASB Quarterly Update Q2 2025.”
Separately, FASB added a research project on digital assets. The project aims to provide clarity on issues such as cash-equivalent classification for payment tokens and accounting for crypto lending. As of this writing, no new guidance has been issued.
How Forvis Mazars Can Help
In the heavily regulated banking industry, leaders face more challenges than ever, from managing shareholder and regulatory expectations to pursuing digital innovation. Forvis Mazars can help your financial institution tackle issues inherent to the industry, including market growth, internal control threats, industry consolidation, and compliance. We have the skills and experience in financial services that you can trust. Combine our focus on delivering an Unmatched Client Experience® with the resources of a global firm, and you will find that Forvis Mazars is the trusted adviser your institution needs. Serving you is our passion and privilege.
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