Welcome to the fifth issue of Monthly Deposits: MoFo’s Bank Regulatory Newsletter, which provides an overview of recent developments in U.S. bank regulation, including proposed rules, reforms, and other significant updates. Here we cover some of the key developments from the past month that our team is keeping an eye on.
On July 1, 2026, the Federal Reserve Board (FRB) issued the initial findings from its 2025 triennial payments study (the “study”), providing insight into the payment choices of consumers and businesses. The study, a collaboration between the FRB and the Federal Reserve Bank of Atlanta, develops top-line estimates for core noncash payment methods used by consumers and businesses from data collected through surveys of depository institutions, card networks, and payment processors.
The study found that core noncash payments, including general-purpose and private-label cards, ACH payments, checks, and ATM cash withdrawals, grew substantially over the study period, to an approximate total of 237 billion payments in 2024. This represents an increase of approximately 32 billion payments from 2021, the largest three-year increase observed in the study’s history. Card payments primarily drove this growth, representing approximately 80 percent of all noncash payments. Debit card payments, while still accounting for the majority of card payments, decreased slightly while credit card payments increased by a total of approximately 16 billion payments. Check payments and ATM cash withdrawals both continued a steady decline in numbers, with a corresponding shift to higher average value payments and withdrawals.
On July 7, 2026, the FRB requested public comment on a proposed rule to amend its requirements for banks to maintain anti-money laundering and countering the financing of terrorism (AML/CFT) programs under the Bank Secrecy Act (BSA). The proposed rule would align the FRB’s requirements with recent revisions made by other federal banking agencies and would require banks to incorporate the Financial Crimes Enforcement Network’s AML priorities into their risk assessment processes.
In addition, the proposed rule would require banks to allocate additional resources based on risk, and to focus their AML/CFT programs and attention on higher-risk customers and activities. In turn, the FRB’s AML/CFT supervision and enforcement efforts would focus on significant failures rather than “isolated, technical, or immaterial” deficiencies. Instead, a “significant or systemic” failure would be required to trigger an enforcement action or matter requiring attention. FRB Governor Michael Barr was the lone “no” vote on the proposed rule, and he issued a statement explaining his opposition, citing the potential “unknown effects” of this standard on the FRB’s supervisory activities. Comments on the proposed rule are due by September 8, 2026.
On July 13, 2026, the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC), and the National Credit Union Administration (collectively, the “agencies”) issued guidance advising banks and credit unions to consider the credit risks associated with borrowers who are not authorized to work in the U.S. The guidance reminds supervised financial institutions of existing supervisory expectations regarding credit risk management and lending to individuals who are not legally authorized to work in the U.S. The guidance builds on prior administration actions aimed at addressing risks to the financial system and immigration status, including the Consumer Financial Protection Bureau’s June Statement on Ability to Repay and Immigration Status and the White House’s May Executive Order on Restoring Integrity to America’s Financial System.
As it relates to the July guidance, the guidance outlines how lending to such individuals may present elevated credit risk and advises financial institutions to mitigate such risks through safe and sound underwriting practices that assess a borrower’s willingness and capacity to repay according to the terms of the credit obligation. Such underwriting may include assessing the borrower’s overall financial condition and resources, as well as whether uncertainties relating to employment authorization may affect the stability and sustainability of the borrower’s income and repayment capacity. Specifically, the guidance provides that “changes in immigration enforcement [and] employment verification practices” may present elevated risk for financial institutions with significant lending exposure to borrowers in certain geographic markets or industries.
On July 16, 2026, the FRB, the FDIC, and the OCC (collectively, the “banking agencies”) issued a joint statement establishing enhanced security procedures and protocols for handling sensitive bank data and documents during supervisory examinations. The statement outlines a coordinated approach by the banking agencies to reduce cybersecurity risks to regulated banks while ensuring regulators have sufficient access to information during examinations.
Notably, the banking agencies announced a commitment to notify affected banks of potential or confirmed material data breaches involving confidential supervisory information “as soon as practicable, and no later than 72 hours after discovery,” subject to legal considerations and restrictions. The statement also outlines certain categories of bank exam data considered to be “highly sensitive information” at heightened risk from disclosure. These categories include: (i) technology or network diagrams and schematics; (ii) penetration test results; (iii) cybersecurity vulnerability test results; and (iv) succession planning. Under the new unified approach across the banking agencies, bank management will identify documents and data that should be considered highly sensitive information, which will be eligible for enhanced collection and storage procedures, including on-site review, redactions, and sensitive transmission measures.
On July 21, 2026, the U.S. House of Representatives passed a package of financial services-related legislation focused on tailoring requirements and easing regulations for smaller banks. The Main Street Capital Access Act (H.R. 6955) would raise the thresholds for small banks to qualify for less stringent oversight frameworks, ease the de novo bank formation process, and create exceptions to certain failed bank resolution frameworks. The legislative package also includes provisions for indexing certain bank regulatory thresholds to inflation and providing for their periodic adjustment. Another bill in the package would revise the management component of the CAMELS rating, making the criteria reviewable.
On the supervision and regulation front, the package of bills would mandate that federal banking agencies complete examinations of regulated institutions within 270 days and revise certain supervisory rating systems to concentrate on objective criteria. The package of bills faces an uncertain path to passage in the Senate this year, but those parts of the legislative package that enjoyed bipartisan support could be added as riders on other legislative packages.
Previously, on July 15, 2026, the House of Representatives passed a trio of financial services bills that would, among other things, require the evaluation of competitive bids during regulatory review of a proposed bank acquisition, and prohibit payment card networks from assigning or requiring merchant category codes for firearms retailers.