Federal Reserve Regulatory Updates

Key dates

2026-10-28

FOMC statement released; target federal funds range maintained at 3.75% to 4.00% and ample-reserves policy continued.

Suggested considerations

• Compliance and risk teams may wish to record the October 28, 2026 target range of 3.75% to 4.00% and the 10-2 vote in regulatory change-management and market-risk records.
• Firms should consider reviewing interest-rate, basis, liquidity and funding-risk limits against scenarios involving a further 25-basis-point increase, including a possible December 2026 hike suggested by independent market commentary.
• Banks and other lenders may wish to assess the effect of persistently elevated rates on borrower affordability, refinancing risk, delinquency assumptions, fair-lending monitoring and customer communications.
• Treasury and finance teams should consider validating the treatment of the unchanged policy rate in transfer-pricing, liquidity-stress, valuation, hedge-accounting and capital-planning models.
• Broker-dealers, asset managers and leveraged funds may wish to reassess margin, collateral, redemption-liquidity and counterparty exposures under higher-for-longer rate scenarios.
• Compliance teams should consider monitoring the forthcoming FOMC implementation note and subsequent Federal Reserve communications for any operational details affecting reserve management or money-market conditions.
• Firms should consider documenting the distinction between this policy decision and a new regulatory rule: the statement contains no new prudential ratio, disclosure, reporting or customer-protection requirement.

What changed

The FOMC made no change to the federal funds target range, which remains 3.75% to 4.00%, and did not announce a change to its policy of maintaining ample reserves in the banking system. The statement upgraded its description of economic activity to expanding at a strong pace and characterized productivity growth and capital investment as strong or robust, while stating that inflation remains elevated. The Committee emphasized that it will assess additional information in determining the policy stance needed to return inflation to its 2% goal. Lisa D. Cook and Beth M.

Key dates

2026-10-08

Federal Reserve and OCC announced coordinated enforcement actions; the OCC imposed a $350 million civil money penalty on American Express National Bank and issued a cease-and-desist order. The Federal Reserve action applied to American Express Company and American Express Travel Related Services Company, Inc.

2027-01-06 Deadline

Approximate deadline for American Express National Bank to submit the OCC-required written Action Plan within 90 days of the October 8, 2026 order, subject to the order's day-counting conventions.

Suggested considerations

• Compliance teams may wish to reassess whether the institution's BSA/AML risk assessment adequately covers its largest and most economically significant products, customer segments, transaction channels, and trade-related activity.
• Firms should consider testing whether customer identification, customer due diligence, beneficial-ownership information, and transaction-monitoring scenarios are appropriately calibrated to credit-card, charge-card, merchant, cross-border, and trade-based money-laundering risks.
• Management may wish to inventory staffing, subject-matter expertise, escalation capacity, data quality, model and rules governance, internal controls, independent testing, and BSA/AML training for employees and directors against the deficiencies identified in the coordinated orders.
• Compliance teams may wish to conduct a lookback of previously generated alerts and transactions to assess whether suspicious activity was timely investigated, escalated, documented, and reported through SARs, including whether systemic monitoring gaps affected historical activity.
• Boards and senior management should consider obtaining documented evidence that enterprise AML oversight is operating effectively at subsidiaries and that parent-level governance does not rely solely on narrow subsidiary or product risk assessments.
• Affected American Express entities should track the 90-day Action Plan submission requirement and prepare supporting remediation evidence, governance reporting, milestone tracking, and supervisory communications.
• Other regulated firms should consider treating the action as a supervisory signal that risk assessments, transaction monitoring, and SAR controls must be aligned to actual business volume and risk rather than to the products that are easiest to administer.

What changed

This is an enforcement action rather than a generally applicable new rule, but it establishes concrete remediation expectations for a large, complex card issuer. The coordinated OCC order requires American Express National Bank to submit, within 90 days of the October 8, 2026 order, an acceptable written Action Plan addressing all BSA/AML deficiencies and incorporating the order's substantive requirements; the OCC must provide prior written supervisory non-objection.

Key dates

2026-10-06

Vice Chair Bowman delivered the speech announcing the Federal Reserve's planned five-region supervisory realignment and outlining proposed modernization initiatives.

2026-07-01

The revised Community Bank Leverage Ratio framework took effect, lowering the ratio from 9 percent to 8 percent.

2025-12-01

The FFIEC issued a request for information on streamlining the Call Report.

Suggested considerations

• Compliance teams may wish to monitor Federal Reserve, FDIC, OCC, and FFIEC proposals arising from the speech, particularly any proposal to index fixed-dollar thresholds, revise community-bank classifications, modify large-bank tailoring, or amend Regulation O.
• Community banks should consider assessing how a future increase in the Community Bank Leverage Ratio eligibility threshold or broader community-bank treatment could affect capital planning, reporting, examination scope, and supervisory expectations; the speech does not yet establish eligibility changes beyond the 8 percent ratio already effective July 1, 2026.
• Banks preparing mergers may wish to document the competitive effects of credit unions, nonbank lenders, Farm Credit institutions, branchless banks, and other local competitors in anticipation of possible changes to Federal Reserve merger analysis.
• Prospective de novo applicants should consider reviewing business plans, initial and ongoing capital assumptions, governance arrangements, and expected approval timelines against existing federal and state requirements while awaiting any clarification of standards or conditional-approval practices.
• Call Report filers may wish to review the December 2025 FFIEC request for information and preserve data on duplicative, low-value, or operationally burdensome reporting items for future comment opportunities.
• Banks may wish to map current supervisory issues and examination findings to material financial risks, recognizing that the Statement of Supervisory Operating Principles emphasizes prompt escalation and proportionate action rather than checklist-driven process findings.
• Community banks should consider comparing their third-party risk-management programs with the Federal Reserve's community-bank third-party risk-management guide and documenting due diligence, contract oversight, ongoing monitoring, and escalation practices.
• Boards and senior management may wish to track forthcoming CAMELS revisions and assess potential effects on management-rating governance, examination preparation, remediation prioritization, and communications with directors.

What changed

The Federal Reserve announced that it is beginning to realign its supervisory function into five geographic regions led by regional leaders accountable for all supervisory activity in each region, while retaining existing Reserve Bank staff and footprints. The speech states that the Board will later in 2026 consider increasing fixed-dollar asset thresholds in its regulations and establishing a five-year adjustment mechanism tied to inflation and economic growth.

Key dates

2026-08-04

Federal Reserve published the proposed rule in the Federal Register at 91 FR 49526.

2026-10-05 Deadline

Public comments on the proposed rule are due.

Suggested considerations

• Compliance teams may wish to map the proposal’s threshold changes against existing Regulation O controls, including board-approval triggers, disclosure triggers, and internal lending limit checks.
• Firms may wish to identify any lending relationships that rely on current presumptions of control, especially where portfolio companies of investment fund complexes could be affected.
• Banks may wish to review insider-lending policies, forms, recordkeeping, and disclosure workflows for provisions that the proposal would codify, clarify, or remove.
• Stakeholders may wish to submit comments by 2026-10-05 if they want to influence the final treatment of thresholds, fund-complex ownership, valuation rules, or correspondent-lending provisions.
• Legal and compliance teams may wish to compare the proposed text against existing Regulation O, Regulation Y, and internal interpretive guidance to spot implementation impacts if the rule is finalized largely as proposed.

What changed

The proposal would amend 12 CFR part 215 (Regulation O) and conform related provisions in Regulation Y and other Board regulations. It would make a one-time adjustment to several dollar-based thresholds, then index those thresholds going forward based on nominal GDP. It would clarify how certain limits apply on an aggregate basis and streamline limits on loans to executive officers, including prior board-approval requirements for certain large loans.

Key dates

2026-08-04

Publication of the Federal Reserve Board notice of proposed rulemaking ‘Regulatory Modernization and Relief for Mutual Holding Companies’ in the Federal Register (91 FR 49490; FR Doc. 2026-15774) amending Regulations Q (12 CFR part 217) and MM (12 CFR part 239).

2026-10-05 Deadline

Comment deadline for submitting responses to the Federal Reserve Board on the proposed amendments to Regulations Q and MM (Docket No. R-1895; RIN 7100-AH26).

Suggested considerations

• Compliance teams at mutual holding companies and savings and loan holding companies may wish to review the proposed amendments to Regulation MM (12 CFR part 239), particularly the sections on dividend waivers, mutual-to-stock conversion processes, post-conversion restrictions, chartering requirements for subsidiary holding companies, and updated model charters and bylaws, to assess operational and governance impacts.
• Firms planning or contemplating mutual-to-stock conversions should consider comparing their current conversion documentation, use of FR MM-PS, FR MM-OC and FR MM-OF forms, and liquidation account methodologies with the proposed streamlined forms, corrected liquidation account calculations, and revised rules on stock pricing, repurchases, offers and sales, employee stock ownership plan financing and benefit plans.
• Institutions that issue, or are considering issuing, mutual capital certificates should review the proposed Appendices B and C to Regulation Q (12 CFR part 217) to evaluate whether their existing or planned instrument terms align with the model key terms for qualification as Common Equity Tier 1 or Additional Tier 1 capital, including permanence, loss-absorption, distributions and redemption features.
• Subsidiary holding companies of thrift mutual holding companies may wish to analyze the proposed elimination of the federal charter requirement and related changes to Subpart C of Regulation MM to determine chartering options, corporate structure implications, and any needed updates to organizational documents and regulatory commitments.
• Governance and legal teams at MHCs could review the proposed revisions to membership rights, proxy processes, postal mail requirements, voluntary dissolution, and the model charter and bylaws in Appendices A, C and D to Regulation MM, with a view to aligning internal policies and corporate governance frameworks with the modernized regime once finalized.
• Risk and capital management functions at bank holding companies, savings and loan holding companies and state member banks should consider evaluating capital planning assumptions and buffers in light of the clarified eligibility of mutual capital instruments as regulatory capital under Regulation Q, and identify any systems or reporting changes that may be required if the proposal is adopted.
• All affected firms may wish to prepare internal impact assessments and, where appropriate, draft comment letters addressing specific elements of Regulations Q and MM (Docket No. R-1895; RIN 7100-AH26), including any perceived risks around conflicts of interest, reduced accountability, or adjustment costs noted in the economic analysis.
• Compliance monitoring teams should plan to track the rulemaking through the comment close date and subsequent Federal Reserve actions so that, if the proposal is finalized, implementation plans can be developed for policy updates, staff training and revisions to regulatory reporting and capital instrument documentation.

What changed

The NPR proposes targeted amendments to Regulation MM (12 CFR part 239) governing mutual holding companies (MHCs), including eliminating certain dividend waiver requirements that currently apply to MHCs and their subsidiary holding companies, and revising post-conversion restrictions to reduce burdens following mutual-to-stock conversions.

Key dates

2026-07-31

Federal Reserve Board requested comment on the proposed Regulation O modernization

2026-10-05 Deadline

Expected comment deadline stated in the Federal Register notice

Suggested considerations

• Compliance teams may wish to map current insider-credit controls, approval thresholds, and disclosure workflows against the proposed higher dollar limits.
• Banks may wish to identify products and systems affected by Regulation O exceptions, including credit cards, overdraft lines, and other-purpose loans.
• Institutions may wish to review whether any existing insider or related-interest procedures depend on legacy interpretations that the proposal would codify or reorganize.
• Firms with investment fund ownership structures may wish to assess whether the proposed relief for passive interests would change current principal-shareholder or control analyses.
• Interested parties may wish to prepare comments for the Federal Register comment period once publication occurs, as the proposal states comments are due 60 days after publication.

What changed

The proposal would increase several outdated dollar-based thresholds in Regulation O, including the amounts tied to certain credit card exceptions, overdraft exceptions, executive officer loans for other purposes, and the level at which prior board approval is required. It would also establish an indexing methodology so the thresholds are automatically adjusted over time based on cumulative nominal GDP growth, reducing the need for repeated rulemaking. The Federal Reserve also says the proposal would address unnecessary applications of the rule to passive interests in companies held by...

Key dates

2026-07-31

Federal Reserve Board issued the request for comment on the proposal.

2026-08-04

Federal Register publication date referenced in the available materials.

2026-10-05 Deadline

Comment period closes 60 days after Federal Register publication, according to secondary reporting and the referenced publication timeline.

Suggested considerations

• Compliance teams may wish to review whether the institution falls within the mutual banking organization or mutual holding company framework and assess whether the proposal would affect capital planning.
• Firms may wish to evaluate existing and planned capital instruments to determine whether they could qualify as regulatory capital under the proposed clarification.
• Institutions may wish to review dividend-waiver, conversion, and other mutual-structure processes for possible operational or governance changes under the proposal.
• Affected firms may wish to prepare comment letters on capital treatment, loss-absorption, conflicts of interest, accountability, and competition effects, consistent with the issues highlighted by the Board statement.

What changed

The proposal would modernize the Board’s rules applicable to mutual banking organizations, including mutual holding companies, for the first time in about 30 years. It would clarify which instruments may count as regulatory capital, expand flexibility for certain mutual banks to raise capital, and reduce procedural burdens. The Board’s memo says the proposal would amend Regulation MM and the capital rule to address limited access to equity and costly, unclear requirements.

Key dates

2026-07-16

Federal Reserve Board announced the enforcement action and published the prohibition order against James Burns

2016-01-01

Approximate period referenced in the order when Burns caused the bank to approve loans supported by altered appraisals

Suggested considerations

• Compliance teams may wish to review appraisal-validation procedures for real property loans, including documented verification of appraiser licensing and credentials.
• Banks may wish to test controls that detect altered or inconsistent appraisals before loan approval.
• Firms may wish to reinforce escalation protocols when appraisal values change after submission or when appraisal irregularities appear.
• Institutions may wish to assess whether lending officers have clear responsibility for appraisal due diligence and whether those responsibilities are reflected in policies, training, and monitoring.
• Boards and senior management may wish to review how prior enforcement actions against individuals could inform conduct-risk and credit-risk oversight.

What changed

The publication announces a final enforcement action, not a new rule or general policy change. The Board executed a prohibition order upon consent against Burns under section 8(e) of the Federal Deposit Insurance Act, which prohibits him from participating in any manner in the affairs of insured depository institutions and related institutions unless the Board grants prior written approval.

Key dates

2026-07-13

Federal Reserve speech delivered in London on modernization of financial regulation

2026-07-22 Deadline

FSB public comment deadline for the consultation report on sound practices for responsible adoption of AI

2026-07-13

Speech states the FSB modernization consultation report will be published in the fall and then delivered to the G20

Suggested considerations

• Compliance teams may wish to map the speech to ongoing capital-rule workstreams, especially Basel III, stress testing, and G-SIB surcharge calibration.
• Large-bank firms may wish to assess whether current capital planning assumes overlapping stress-test and risk-based requirements that could be reduced or realigned.
• Community and regional banks may wish to review whether fixed-dollar regulatory thresholds continue to overstate burden as assets grow with inflation and nominal GDP.
• Supervised firms may wish to align internal issue-management processes with the Federal Reserve’s stated shift toward findings tied to material financial risk and more differentiated treatment of lesser issues.
• AI governance teams may wish to compare current model-risk, vendor-risk, and use-case controls against the FSB’s consultation themes on responsible adoption and use of AI.
• Boards and senior management may wish to review whether supervisory documentation, escalation, and risk reporting are sufficiently focused on material safety-and-soundness issues.

What changed

This speech does not itself impose binding requirements, but it signals several concrete regulatory and supervisory changes already underway. Bowman said the Federal Reserve is advancing a 2026 Basel III proposal and related capital framework reforms, including a single stack of risk-based capital requirements for large banks, recalibration of the G-SIB surcharge, reduced overlap between stress testing and risk-based capital requirements, and indexing the G-SIB surcharge to nominal economic growth going forward.

Key dates

2026-07-06

Federal Reserve and the firms executed the written agreement

2026-07-09

Federal Reserve publicly announced the enforcement action

2026-08-05 Deadline

Cash flow forecasts due 30 days after the agreement date, as described in the agreement reporting

2026-09-04 Deadline

Capital plan due 60 days after the agreement date, as described in the agreement reporting

Suggested considerations

• Compliance teams may wish to review the written agreement and map each requirement to responsible owners, due dates, and reporting lines.
• Firms in similar structures may wish to confirm whether capital distribution limits, new debt restrictions, or prior-approval conditions apply under their own supervisory agreements.
• Boards may wish to assess whether consolidated capital planning, liquidity forecasting, and subsidiary support expectations are sufficiently documented and tested.
• Supervisory response plans may wish to be updated to reflect escalation triggers for capital shortfalls, liquidity stress, and required regulator communications.

What changed

The Fed executed a written agreement with TS Banking Group, Inc. and TS Contrarian Bancshares, Inc. on July 6, 2026, and publicly disclosed it on July 9, 2026. The public press release identifies only the parties and the action type, while the attached agreement indicates the Board can enforce the agreement under section 8 of the Federal Deposit Insurance Act and section 50 of the FDI Act.

Key dates

2026-07-07

Federal Reserve Board issued the request for comment on the proposed AML program amendments

2026-09-05 Deadline

Indicative comment deadline if the proposal is published in the Federal Register on July 7, 2026; the Federal Reserve states comments are due 60 days after Federal Register publication

Suggested considerations

• Compliance teams may wish to review current AML/CFT program governance against the proposed minimum program components, including risk-based controls, independent testing, training, and designated accountable oversight.
• Firms may wish to map their current risk assessment methodology to the FinCEN AML priorities referenced in the proposal and identify any gaps in documentation or calibration.
• Banks may wish to assess whether resources are demonstrably weighted toward higher-risk customers, products, services, and activities, since the proposal emphasizes risk-based allocation.
• Compliance functions may wish to track the Federal Register publication date closely so the 60-day comment clock can be calculated once the notice is published.
• Commenting stakeholders may wish to compare the Federal Reserve proposal with the parallel proposals from the other agencies to identify alignment issues or operational inconsistencies.

What changed

The proposal would amend the Federal Reserve's requirements for banks to maintain anti-money laundering programs to align with parallel proposals from four other agencies. It would require banks to allocate AML resources based on risk, with greater attention to higher-risk customers and activities. It would also require banks to incorporate the Financial Crimes Enforcement Network's AML priorities into their risk assessment processes.

Key dates

2026-06-18

Federal Reserve determined Small Business Bank was significantly undercapitalized

2026-06-25

Termination effective date for the BNP Paribas-related cease-and-desist order and the Community Bankshares cease-and-desist order

2026-06-29

Prompt Corrective Action Directive issued for Small Business Bank

2026-07-29 Deadline

Approximate latest date to increase equity if measured as 30 days from the June 29, 2026 directive date; the exact deadline depends on the directive's effective date and any permitted extension

Suggested considerations

• Compliance teams at banks facing PCA should review whether capital ratios trigger section 38 of the FDI Act and Regulation H thresholds.
• Affected institutions may wish to map the directive's capital restoration timeline to board oversight, funding sources, and shareholder approval processes.
• Firms with open Federal Reserve enforcement matters may wish to monitor the Board's enforcement database for termination notices and effective dates.
• Boards and management teams may wish to ensure the documentation supporting capital adequacy, if relevant, is current and ready for supervisory review.

What changed

For Small Business Bank, the Board executed a Prompt Corrective Action Directive dated June 29, 2026 under section 38 of the Federal Deposit Insurance Act and Regulation H. The directive states the bank was significantly undercapitalized as defined in 12 C.F.R. 208.43(b)(4) and requires the bank to raise equity within 30 days of the effective date so it becomes adequately capitalized under 12 C.F.R. 208.43(b)(2).

Key dates

2026-06-25

Federal Reserve Board announced the consent cease-and-desist order against Jason Burns

Suggested considerations

• Compliance teams may wish to review lending approval, exception, and escalation controls for any patterns that could be characterized as unsafe lending.
• Firms may wish to assess whether board and senior management oversight of credit extensions is documented clearly enough to withstand supervisory scrutiny.
• Institutions may wish to confirm that conflicts of interest, insider influence, and related-party lending safeguards are operating effectively.
• Banks may wish to ensure that examination issues identified in credit administration are remediated before they become individual enforcement matters.

What changed

The publication records a new formal enforcement action: a consent cease-and-desist order against Jason Burns. The stated basis is unsafe lending practices, but the press release does not describe the underlying factual findings, operational requirements, monetary penalties, or remediation deadlines. The action is an individual supervisory response connected to an Oklahoma bank and its holding company, indicating the Fed viewed the conduct as serious enough to warrant public enforcement.