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.
In a dramatic fashion, October began with a government shutdown as Congress was unable to pass a funding bill. Despite the shutdown, the U.S. banking agencies remained active during the month releasing multiple proposed rule makings, updates to policies, and guidance. Read about this—and more—in the following summary of activities in the U.S. banking regulatory ecosystem.
Navigating the Evolving U.S. Banking Regulatory Landscape: Key Highlights From October 2025
The U.S. banking regulatory environment saw a few developments in October 2025, spanning legislative, supervisory, and international fronts. Here are the quick hits:
- On Capitol Hill
- A Senate bill proposes raising currency transaction reporting (CTR) and suspicious activity reporting (SAR) thresholds under the Bank Secrecy Act (BSA), aiming to modernize reporting and ease compliance burdens.
- Joint Agency Statements
- Federal banking agencies rescind climate risk management principles, citing overlap with existing risk frameworks and potential distraction from broader risks.
- The Financial Crimes Enforcement Network (FinCEN) and regulators issue SAR FAQs, aiming to ease filing burdens and promote a risk-based approach to Anti-Money Laundering (AML)/Combating the Financing of Terrorism (CFT) compliance.
- The FDIC and the Office of the Comptroller of the Currency (OCC) propose a formal definition of “unsafe and unsound practices,” signaling a shift toward focusing on material financial risk.
- The FDIC and the OCC propose a new rule to eliminate reputation risk from supervision, aiming to reduce subjectivity and protect lawful banking relationships.
- The FDIC board outlines seven regulatory priorities, which spotlight resolution readiness, deposit insurance reform, and community bank support.
- Federal Reserve Updates
- The Federal Open Market Committee (FOMC) lowers the federal funds rate amid labor market concerns.
- The Board of Governors issues a proposal that would overhaul the annual stress test for large banks.
- OCC Initiatives
- The OCC issues five bulletins aimed at easing regulatory burden for community banks, including exam guidance updates and proposed rule changes.
- The OCC proposes rescinding recovery planning standards for large banks, aiming to reduce regulatory burden on institutions.
- CFPB Agenda
- The Consumer Financial Protection Bureau (CFPB) finalizes extended compliance dates for Section 1071 data collection, giving small business lenders more time to meet Equal Credit Opportunity Act (ECOA) reporting requirements.
- FASB Updates
- FASB launches a project to review the accounting and disclosure for certain digital assets and related transactions.
On Capitol Hill
Bill Advances in Senate to Streamline Currency Transaction Reporting
On October 21, 2025, the Streamlining Transaction Reporting and Ensuring Anti-Money Laundering Improvements for a New Era Act (STREAMLINE Act) was introduced in the Senate. The STREAMLINE Act proposes sweeping updates to CTR and SAR thresholds under the BSA. The bill aims to modernize reporting requirements for financial institutions by raising financial reporting thresholds and tying periodic updates to inflation.
Under the proposal, CTR thresholds would increase from $10,000 to $30,000 with mandated five-year inflation adjustments tied to the Consumer Price Index, rounded to the nearest $1,000. The bill also would require the Secretary of the Treasury to issue implementing regulations within 180 days of enactment. Similarly, the bill proposes updates to SAR thresholds to increase certain thresholds from $2,000 to $3,000 and from $5,000 to $10,000, respectively. The head of each federal agency that issues regulations with respect to reports on suspicious transactions under U.S. Code Title 31, §5318(g) is tasked with implementing the increases to SAR thresholds within 180 days of enactment.
Joint Agency Statements
Agencies Announce Withdrawal of Principles for Climate-Related Financial Risk Management
On October 16, 2025, the OCC , Federal Reserve, and FDIC formally rescinded the principles for climate-related financial risk management for large financial institutions. The decision to rescind the principles comes just two years after publication, reflecting the agencies’ view that all financial institutions are expected to consider and appropriately address current and emerging risks that are material to their operating environment. Furthermore, the agencies expressed concern that the principles for the management of climate-related financial risk could distract from the management of other potential risks identified and addressed by existing bank risk management processes.
Agencies Provide Relief on SAR
On October 9, 2025, the FinCEN jointly with the prudential banking regulators issued answers to frequently asked questions (FAQs) regarding SAR and other AML/CFT considerations for financial institutions covered by SAR rules. The FAQs aim to clarify the regulatory requirements related to SAR filings and reinforce a risk-based approach to focus resources on activities that produce the greatest value to law enforcement and other authorized users of BSA reporting. The guidance addresses four key topics, including:
- SAR Filings for Potential Structuring-Related Activity;
- Continuing Activity Reviews;
- Continuing Activity Reviews – Timeline; and
- No SAR Documentation.
The changes to certain elements of SAR filing requirements are designed to reduce unnecessary filings and encourage more targeted, effective reporting while maintaining examiner expectations for sound governance and documentation. For more information, see our FORsights™ article, “FinCEN Provides Relief on Suspicious Activity Reporting.”
Banking Agencies Propose to Define “Unsafe and Unsound”
On October 7, 2025, the FDIC and OCC jointly approved a notice of proposed rulemaking to formally define “unsafe and unsound practices” under §8 of the Federal Deposit Insurance Act. The proposed definition focuses on acts, omissions, or patterns of behavior that deviate from prudent standards and which have caused, or are likely to cause, material financial harm to an institution’s financial condition or the Deposit Insurance Fund (DIF). The proposal also raises the threshold for issuing Matters Requiring Attention (MRAs), reserving them for practices that, if continued, could materially harm an institution’s financial condition, present a material risk to the DIF, or violate banking laws or regulations. The public comments period extends for 60 days following publication in the Federal Register. For more information, see our article, “Banking Agencies Propose to Define “Unsafe and Unsound.””
Notice of Proposed Rulemaking for Removal of Reputational Risk From Their Supervisory Programs
On October 7, 2025, Bulletin 2025-30 was issued jointly by the OCC and the FDIC, proposing to codify the elimination of “reputation risk” in supervisory programs. The proposed rule would prohibit regulators from criticizing or taking adverse action against any bank, or its employees, based on perceived reputation risk, including actions tied to political, social, cultural, or religious views, constitutionally protected speech, or lawful but politically disfavored business activities. In addition, it would bar the agencies from instructing banks to modify or terminate relationships with third parties solely due to reputation concerns. The agencies argue that use of the concept of reputation risk as a basis for supervisory criticism increases subjectivity and could distract banks and regulators from dedicating resources to adequately manage core financial risks. Comments on the proposed rule are due within 60 days of its publication in the Federal Register.
FDIC Board Identifies Areas of Regulatory Focus
On October 7, 2025, the FDIC board of directors met to discuss several regulatory matters. During his remarks at the board meeting, the Comptroller of the Currency outlined seven key areas of regulatory focus with an emphasis on operational readiness, regulatory clarity, and transparency. The areas of focus include:
- Rebuilding Resolution Execution Capabilities
- Clarifying Deposit Insurance Fund Management
- Agency Culture Reform
- Reforming the Deposit Insurance Application Process
- Supporting State Bank Preemption Rights
- Modernizing Bank Funding Frameworks
- Community Bank Support
For more information, see our article, “FDIC Board Identifies Areas of Regulatory Focus.”
Federal Reserve Board
An Overview of the Federal Open Market Committee Meeting
On October 29, 2025, the FOMC released a statement announcing the second consecutive interest cut as it plans to lower the federal funds rate by 0.25% to a target range between 3.75% and 4%. The statement points to slow job gains and an uptick in unemployment as motivating factors for the rate cut. Economic metrics beyond August are uncertain due to lack of official reports during the government shutdown. However, available private data and state administrative records show moderate growth in economic activity, slight increases in unemployment, and elevated inflation.
In addition to the announced rate cut, the FOMC announced plans to end its quantitative tightening policy, a monetary policy focused on reducing its aggregate securities holdings, on December 1, 2025.
The Fed Proposes Changes to Its Annual Stress Test
On October 24, 2025, the Federal Reserve Board of Governors (Board) issued a sweeping proposal that would overhaul the annual stress test for large banks. The updates are intended to enhance the transparency and public accountability of the annual process. If finalized, the proposal would:
- Amend the Policy Statement on the Scenario Design Framework for Stress Testing, including guides for additional scenario variables, and the Stress Testing Policy Statement;
- Codify an enhanced disclosure process where the Board would publish documentation on the stress test models annually, invite public comment on any material changes the Board plans to make on the stress testing models, and annually publish the stress test scenarios for comment; and
- Make changes to the FR Y-14A/Q/M reporting forms to remove items that are no longer needed to conduct the supervisory stress test.
Under the proposal, the Board is inviting public comment on the models used to conduct the supervisory stress test and proposed model updates for the 2026 stress test, among other items. In addition, the proposal would shift the jump-off date of the supervisory stress tests from December 31, 2025 to September 30, 2026 to accommodate the annual scenario comment period. Public comments on the proposal are invited through January 22, 2026.
The board also announced a request for comment on its proposed scenarios for the 2026 supervisory stress tests. Specifically, the 2026 severely adverse scenario is a hypothetical severe global recession triggered by a decline in risk appetite, causing declines in the prices of risky assets and risk-free interest rates, and high market volatility. Additional stress events related to household demand, employment and business investments, and income and wealth, among other items, are incorporated. Comments are invited on all aspects of the scenario proposal and are due by December 1, 2025.
Office of the Comptroller of the Currency
Notice of Proposed Rulemaking to Rescind Recovery Planning Standards
On October 27, 2025, the OCC issued a notice of proposed rulemaking to rescind previously released guidelines establishing standards for recovery planning by certain large insured national banks, federal savings associations, and federal branches. The guidelines, last amended in October 2024, apply to banks with total consolidated assets of $100 billion or more. The requirements, originally adopted in 2016, mandated covered banks to maintain detailed recovery plans, including identifying indicators of severe stress, outlining a range of credible options to restore financial strength, and assessing the impact of those options. The guidelines also require addressing organizational structure, interconnections, escalation procedures, management reporting, communication protocols, and any additional OCC instructions. The proposal to rescind the guidelines contained in Appendix E of 12 CFR Part 30 arises from the agency’s efforts to identify and remove unnecessary regulatory burden. The public comment period will remain open for 30 days following publication in the Federal Register.
OCC Issues Bulletins to Reduce Regulatory Burden for Community Banks
On October 6, 2025, the OCC issued several bulletins collectively designed to provide regulatory relief to community banks. Included are three bulletins modifying examination guidance and two bulletins announcing notices of proposed rulemaking, which include:
- Bulletin 2025-24: Frequency and Scope for Community Banks;
- Bulletin 2025-25: Retail Nondeposit Investment Products: Exam Procedures for Community Banks;
- Bulletin 2025-26: Model Risk Management: Clarification for Community Banks;
- Bulletin 2025-27: Rescission of 12 CFR 27, ‘Fair Housing Home Loan Data System’: Notice of Proposed Rulemaking; and
- Bulletin 2025-28: Community Bank Licensing Amendments: Notice of Proposed Rulemaking.
For more information and an overview of each bulletin, see our article, “OCC Issues Bulletins to Reduce Regulatory Burden for Community Banks.”
Consumer Financial Protection Bureau
CFPB Finalizes Section 1071 Compliance Date Extension
On October 2, 2025, the CFPB finalized its 2025 interim final rule, dated June 18, 2025, amending the compliance dates for adherence to §1071 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. As previously reported, §1071 amends the ECOA to require covered financial institutions to compile, maintain, and submit certain protected demographic and credit application data for women-owned, minority-owned, and small businesses as an annual filing to the CFPB. The CFPB extended the timeline under which financial institutions will begin collecting data as follows:
| Covered financial institution compliance tier | Original compliance date in the 2023 final rule | Revised compliance date in the 2024 interim final rule | New compliance date | New first filing deadline |
|---|---|---|---|---|
| Tier 1 | October 1, 2024 | July 18, 2025 | July 1, 2026 | June 1, 2027 |
| Tier 2 | April 1, 2025 | January 16, 2026 | January 1, 2027 | June 1, 2028 |
| Tier 3 | January 1, 2026 | October 18, 2026 | October 1, 2027 | June 1, 2028 |
The definition of each compliance tier remains unchanged, although the final rule permits covered financial institutions to use originations spanning 2022 to 2023, 2023 to 2024, or 2024 to 2025, respectively, to determine which tier they fall into.
The final rule is effective December 1, 2025.
Financial Accounting Standards Board
FASB Launches Project to Review Accounting for Digital Assets
On October 29, 2025, FASB added a research project to its technical agenda to clarify the accounting treatment for certain digital assets. Specifically, the research project will explore whether certain payment digital assets are cash equivalents and the accounting for certain digital asset transfers, such as crypto lending.
While no new guidance is issued at this time, previous FASB stakeholder feedback and recommendations from the report issued by the President’s Working Group on Digital Asset Markets will be considered.
Additional Updates
| Agency | Date | Topic | Description |
|---|---|---|---|
| Joint Agency | 10/1/2025 | Agencies Issue Reminder to Institutions on Lending When the National Flood Insurance Program Is Unavailable | The federal banking agencies issued an interagency questions and answers to remind lenders that they may continue to make loans subject to the federal flood insurance regulations despite the unavailability of the National Flood Insurance Program. These loans may be made without flood insurance, assuming the lender continues performing flood determinations; providing timely, complete, and accurate notices to borrowers; and complying with all other applicable parts of the flood insurance requirements. |
| SEC | 10/2/2025 | Extension of Compliance Date for Disclosure of Order Execution Information | The SEC extends the compliance date for rule amendments related to the disclosure of order executions from December 14, 2025 to August 1, 2026. |
| Treasury | 10/9/2025 | Remarks by Secretary of the Treasury Scott Bessent Before the Fed Community Bank Conference | Bessent highlighted continued efforts to strengthen community bank supervision and regulation. |
| FinCEN | 10/9/2025 | FinCEN Renews Residential Real Estate Geographic Targeting Orders (GTOs) | FinCEN announced the renewal of its GTOs that require U.S. title insurance companies to identify the natural persons behind shell companies used in non-financed purchases of residential real estate in certain counties and major U.S. metropolitan areas. |
| FRB | 10/15/2025 | The Federal Reserve Released the Latest Version of Its Beige Book | The FRB issued its latest publication detailing the current economic conditions across the 12 Federal Reserve Districts. In general, the report indicates overall economic activity changed nominally, employment levels were stable, but demand for labor is trending downward. Increases in layoffs were reported in several districts while wage growth continued modestly. Prices increased further, driven by higher import and service costs. |
| OCC | 10/16/2025 | OCC Releases Fall 2025 Interest Rate Risk Statistics Report | The OCC published its Fall 2025 Interest Rate Risk Report, offering a comprehensive analysis of interest rate risk exposures across banks of all asset sizes. |
| CFPB | 10/28/2025 | CFPB Announces Interpretive Rule Clarifying Scope of FCRA Preemption | The CFPB announced an interpretive rule that clarifies the scope of the Fair Credit Reporting Act’s preemption of state laws that touch on broad areas of credit reporting. |
| CFPB | 10/29/2025 | CFPB Rescinds Its Nonbank Registry Rule (NBR Rule) | The CFPB issued a final rule to rescind its NBR Rule, which required nonbank financial companies that have broken consumer laws and are subject to government or court orders to report those orders to a bureau registry. |
| CFPB | 10/29/2025 | CFPB Withdraws Proposed Form Contract Registry Rule | The action rescinds the 2023 proposal, Notice of Proposed Rule: Registry of Supervised Nonbanks That Use Form Contracts To Impose Terms and Conditions That Seek To Waive or Limit Consumer Legal Protections, to require supervised nonbanks to register and report form contract clauses that waive or limit consumer legal rights. |
From Forvis Mazars
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