|
|
| MARKETS — as of Sep 30, 6:25 AM ET |
|
|
|
|
|
Wednesday, September 30 · Lead Fed and FDIC find no shortcomings in 15 large-bank living wills The Fed and FDIC found no shortcomings or deficiencies in any of the 15 resolution plans filed in October 2025 by banking organizations with more than $250 billion in assets, according to feedback letters the agencies published on September 29. They also said BNP Paribas has satisfactorily fixed the shortcoming identified in its 2021 plan, so none of the 15 carries a formal finding into its next plan. The same day, the Fed, OCC and FDIC briefed the Financial Stability Oversight Council on their rules simplifying supervision.
|
Sentiment Index
-1
Neutral
→
|
|
|
30-day trend
Sep 30, 6:00 AM ET
|
| ▸ | What the letters cover: Five firm-specific letters are public: American Express, Barclays, BNP Paribas, Deutsche Bank and UBS. The other ten, Bank of Montreal, Mizuho, MUFG, Northern Trust, PNC, Royal Bank of Canada, Sumitomo Mitsui, TD, Truist and U.S. Bancorp, received a common template letter that credits meaningful improvements over their prior plans and notes Royal Bank of Canada's switch from a single to a multiple point of entry U.S. strategy. |
| ▸ | The American Express caveat: No shortcoming, but the agencies found significant uncertainty in American Express's preferred strategy: one buyer purchasing its bank, its operating company and its parent across an FDIC receivership and a Chapter 11 case at the same time. The FDIC generally will not accept contingent bids or share bidder information, and it must pick the least costly option, so the agencies told the company to review that strategy for its 2028 plan. |
REGULATORY DEVELOPMENTS Treasury added the first piece of machinery for state stablecoin regimes. Fed officials spent Tuesday on cyber and AI; neither speech set a rule. | ▸ | Treasury's state-certification rule: Treasury's Stablecoin Certification Review Committee filed a final rule on the forms and procedures it will use to review state certifications, and the rule is scheduled to publish in the Federal Register today; VitalLaw describes it as an interim final rule. Under the GENIUS Act, a state-qualified issuer with $10 billion or less outstanding may choose a state regulator only after the committee certifies that state's regime as substantially similar to the federal one. Treasury is not one of the primary federal payment stablecoin regulators, so this rule does not start the 120-day clock that could pull the Act's January 18, 2027 effective date forward. The Fed's two GENIUS proposals now carry a firm deadline, and the substantive one holds two provisions that deserve a closer read: issuer capital requirements indexed to nominal GDP growth, and a tying prohibition that reaches every permitted payment stablecoin issuer rather than only the ones the Board supervises. Comments on both Fed proposals close November 30. |
| ▸ | Bowman and Waller on AI risk: Vice Chair for Supervision Michelle Bowman told a Community Bank Cyber Workshop on September 29 that community banks have absorbed serious cyber events over the past year. She listed ransomware, business email compromise, vendor data breaches and attackers using AI to find vulnerabilities faster. Her defensive list covers current asset inventories, phishing-resistant multifactor authentication, patch management and incident-response testing. She also committed to tailoring IT exams to smaller banks' risk profiles. Governor Christopher Waller, speaking at Sibos the same day, separated agent-assisted commerce, where the buyer keeps control, from agent-delegated commerce, where an agent acts within guardrails. He said large language models could improve sanctions screening and anti-money-laundering systems. Bowman cited the FSB's June 10 AI report. |
| ▸ | FSOC's September readout: Treasury Secretary Scott Bessent convened the Financial Stability Oversight Council in executive session on September 29. Staff concluded that the financial system remains resilient, and the Household Resilience Working Group described household finances as broadly healthy. The same group called fraud a persistent and growing concern. The Fed, OCC and FDIC briefed members on their rules simplifying supervision. The Council approved a $9,337,069 budget for fiscal 2027. |
| ▸ | Two OFAC actions: OFAC designated 46 Sinaloa Cartel targets on September 29, 21 individuals and 25 entities under Executive Orders 14059 and 13224, including cartel leader Ismael Zambada Sicairos, Tijuana cell leaders, money launderers and corrupt Mexican officials; banks with border-region retail or Mexican correspondent business carry the direct exposure. Separately, under Operation Economic Outcast, it designated 10 individuals and entities in several jurisdictions that procured weapons components for Iran's Ministry of Defense and Armed Forces Logistics, an exposure for trade-finance and correspondent books that touch third-country intermediaries. |
INDUSTRY AND AI SIGNALS | ▸ | Anthropic's prospectus, OpenAI's private round: Anthropic's draft IPO prospectus, first reported Monday by Reuters, puts the lab's 2025 net loss at $42 billion on revenue of $4.6 billion, set against $518 billion in computing and infrastructure commitments, according to coverage of the leaked draft; the draft also warns that its own models could pose catastrophic or existential risks. OpenAI is seeking at least $30 billion at about a $1.4 trillion valuation, Bloomberg reported, and Sam Altman has delayed its IPO. For banks that build on these models, the draft is vendor-risk information on a provider's losses and commitments, and the $518 billion is demand for data-center and compute financing. |
| ▸ | Rate path, two Fed voices: New York Fed President John Williams said there is no urgency to raise rates again, Reuters reported, which cooled expectations for an October move. Governor Michael Barr told the Detroit Economic Club on September 29 that only two of the past 20 months of data were consistent with 2 percent core personal consumption expenditures (PCE) inflation; Reuters reported he sees further increases as likely needed. Before the open, the 10-year Treasury yield rose about 2 basis points to about 5.25 percent, and the high-yield spread, the premium risky borrowers pay over Treasuries, widened about 9 basis points to about 3 percentage points. The third quarter closes today. |
| ▸ | Big banks build in-house: Morgan Stanley has set up a digital asset lab to test stablecoins, tokenization and decentralized finance applications, Bloomberg reported. At Sibos, Citi CEO Jane Fraser said the bank has been working to free clients' trapped liquidity, as American Banker reported; Citi then extended its always-on Citi Token Services for liquidity, payments and collateral into two more markets. Citi now offers the service in the UAE and Japan. |
| ▸ | Credit unions keep buying banks: Gulf Winds Credit Union agreed to buy Alabama's Peoples Exchange Bank, Banking Dive reported, a month after agreeing to buy Madison County Community Bank; the Florida credit union rebrands next year. Separately, Peoples Bancshares of TN applied to buy First Peoples Bancorp. Capitolis agreed to buy eSecLending for $200 million in cash. The FDIC's merger proposal would count credit unions as competitors. |
POLITICAL & LEGISLATIVE Congress cleared one bill that changes branch operations and moved another toward conference; neither touches capital or supervision. | ▸ | Common Cents Act, to the President: The Senate passed by unanimous consent a bill to end penny production and to set rules for cash rounding when exact change cannot be given. The bill now heads to President Trump. Once enacted, it would let merchants, banks and credit unions round cash transactions to the nearest nickel, a change that would reach teller procedures, cash-handling controls and whatever customer disclosures the rounding requires, with nothing binding until the President signs. Banks supported the bill, American Banker reported. |
| ▸ | Terrorism insurance reauthorization: The Senate passed a reauthorization of the Terrorism Risk Insurance Act, and ABA Banking Journal reports the bill will likely go to a conference committee. Commercial real estate lenders that require terrorism coverage on large properties have a stake in the final text. The House passed a separate version. |
WHAT'S COMING | ▸ | Three dockets close tomorrow: Tomorrow's deadlines fall to three different teams, one of them in financial crime. The OCC's proposal on how examiners write up violations, the FDIC's reciprocal-deposit proposal and FinCEN's proposed special measure against Banque Misr UAE all close October 1. The FinCEN measure would revoke that bank's correspondent access to U.S. institutions; banks with a relationship have one day left to file operational objections. All three windows close tomorrow. |
| ▸ | Fed final rules on file: The Fed filed final rules amending Regulation D, which sets reserve requirements, and Regulation A, which governs Reserve Bank lending, for publication today. Change-in-bank-control notices publish at the same time. The filings do not yet show the substance, so treasury and discount-window teams should read both texts when they post. Both documents are final rules. |
| ▸ | Insider lending, two agencies: The FDIC's proposal on extensions of credit to insiders and the Fed's companion proposal on loans to executive officers, directors and principal shareholders close together. Banks with director and officer loan books should file against both texts, because the two agencies supervise different charters. Both windows close October 5, five days out. |
WHAT IT MEANS | ▸ | A clean living-will cycle removes formal findings, not the agencies' questions. All 15 plans came back without a shortcoming or deficiency, and BNP Paribas closed its 2021 item. The American Express letter still asks the company to rethink its single-buyer sale strategy for 2028, because the FDIC's own sale rules cut against it. Resolution teams should read their letter for that kind of feedback, which can reshape a plan without a formal finding. |
Dates That Matter Deadlines OCT 1
1d | Comments close: Special measure: Banque Misr UAE [FinCEN] · Reciprocal Deposits: Implementing the 21st Century ROAD to Housing Act [FDIC] · Privacy Act Regulations [CFTC] · Violations of Laws or Regulations [OCC] | OCT 1
1d | Effective: Telemarketing Sales Rule Fees [FTC] · Financial Data Transparency Act Joint Data Standards [OCC] | OCT 5
5d | Comments close: Commodity Pool Operators and Commodity Trading Advisors [CFTC] · Disclosure of Information; Extension of Comment Period [FDIC] |
| | Hearings & Events OCT 1
1d | Hearing: Hearings to examine the nominations of Jeremy Wiggins, of the District of Columbia, to be an Assistant Secreta [Congress] |
|
|
|
|
|
|
|
30-Day Document Volume
|
|
|
|
|
|
Today's inputs
| 103 docs | 20 high priority | 37 social | 446 news |
|
Monitoring 95+ sources across federal agencies, state regulators, expert newsletters, social media, and news wires · Methodology |
|
|
Signed
Lex
LexRegPulse Analyst
Primary-source research · AI-drafted · human‑reviewed
Methodology →
|
|
From LexRegPulse
One more thing. The intelligence behind this brief is available for your institution — pointed at your charter, your regulator, and your policies, so the morning read becomes a working compliance program. LexRegulator.com, or reply here.
|
|
Sentiment Score
The FSI Banking Environment Favorability Score tracks regulatory climate across three signals — administrative posture, regulatory tone, and market sentiment. Updated every morning.
|
|
How we calculate it →
|
|
|
Latest from Lex
FDIC State Bank Parity Rule: Riegle-Neal § 24(j)
The FDIC's State Bank Parity proposal (91 FR 60018) ties out-of-state banks to national bank preempt…
|
|
Read →
|
|
|