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Saturday, October 3 · Lead Independent Community Bankers of America sues OCC over national trust charters for crypto companies The Independent Community Bankers of America (ICBA) sued the OCC on October 2, arguing that the agency exceeded its statutory authority in granting national trust charters to crypto companies, American Banker reported. In its announcement, the trade group alleges the OCC let crypto firms into the banking system without the scrutiny community banks face. The suit asks a court whether a national trust charter can house a crypto firm's custody or stablecoin business, the model behind the OCC's approvals since December 2025. Bloomberg Law and Law360 also reported the filing. ICBA announced the suit Friday. | ▸ | The approvals in view: The filing lands two weeks after the OCC's September 18 decisions, which conditionally approved Bastion Platforms Trust Company's conversion from a New York trust company to an uninsured national trust bank while granting preliminary conditional approval to two de novo charters, Catena Trust Bank and Agora National Trust Bank. Coverage does not say which approvals the complaint names, which court hears it or what relief ICBA seeks. The Conference of State Bank Supervisors (CSBS) had earlier objected that the OCC gave itself broad discretion over these charters; the trust banks take no deposits, make no loans and carry no FDIC insurance. Preliminary approvals are revocable before opening. |
| ▸ | Charter versus issuer approval: A conditional trust charter is not approval to issue a payment stablecoin; no issuer holds that approval, and the OCC's part 15 rule that would set the standard is still a proposal. The GENIUS Act takes effect January 18, 2027 unless a final rule moves it. For banks that hold reserve deposits or provide custody for these trust banks, the suit adds litigation over the counterparty's charter to the risk already posed by the pending rule. The Comptroller has targeted November to finalize it. |
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REGULATORY DEVELOPMENTS Two of the Fed's Friday releases concerned bank holding companies: one cleared a new parent in Louisiana, the other bound a Wisconsin parent to support its troubled bank. Crypto ran through the illicit-finance news as well; OFAC named a Hamas network that moved money through sham charities plus cryptocurrency. | ▸ | Regulation O, one more month: The Federal Reserve Board extended the comment period on its August 4 proposal to modernize Regulation O, which governs loans by member banks to their executive officers, directors and principal shareholders, from October 5 to November 4 after commenters asked for more time (91 FR 49526). The proposal would index outdated dollar thresholds. It would also address member banks that lend to companies presumed controlled by large asset managers through passive funds. The FDIC's companion proposal on extensions of credit to insiders shows no extension and still closes October 5, two days out. The Fed's new deadline is November 4. |
| ▸ | A source-of-strength agreement in Wisconsin: The Fed on October 2 published a Written Agreement, dated September 24, between Ontario Bancorporation of Ontario, Wisconsin, and the Federal Reserve Bank of Chicago, under section 38A of the Federal Deposit Insurance Act plus Regulation Y. It follows an August 6 consent order that the FDIC and Wisconsin's Department of Financial Institutions entered with the subsidiary Bank of Ontario over asset quality, capital, earnings and liquidity. The holding company owes a capital plan within 60 days and cash-flow projections within 30; it may not pay dividends, buy back shares or pay interest on subordinated debentures without prior approval. Distribution requests require 30 days' notice. |
| ▸ | A Louisiana holding company, second pass: The Board approved Fleur Capital Corporation's application to become a bank holding company by acquiring Simmesport State Bank, a $198.5 million state nonmember bank (FRB Order No. 2026-25, October 2). The Atlanta Reserve Bank had approved an earlier version under delegated authority on January 21; the parties then substantively amended the deal, which brought the new application before the Board. The Justice Department raised no competitive bar. The Board received three adverse comments. |
| ▸ | Hamas financing via charities and crypto: OFAC designated five persons under Executive Order 13224 on October 2: Saleem Abdallah Saleem al-Zaq, a battalion deputy in Hamas's military wing; Faouzi Barika and Amel Oualid, both based in France; and their sham charities, Association Baraka and Ensemble C Mieux. Treasury says the network moved more than $2 million to Hamas between 2020 and 2026, including $1.5 million after October 7, 2023. Banks with French charity relationships or crypto on-ramp exposure carry the direct risk. Blocking applies from the moment of designation. |
| WEEKLY FINTECH POLICY BRIEF |
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Federal regulators have been focusing on three questions that matter to fintech: who is responsible when scams spread via fake ads on social media platforms, how AI agents will pay for things, and who gets to invest in private markets. Here's what to watch.
| ▸ | The FTC Asks Whether Platforms Should Answer for Scam Ads. On Oct. 1, the agency published an advance notice of proposed rulemaking asking whether to update its existing impersonation rule to address online platforms' role in facilitating scams. The notice centers on the ad tools that search engines, social media companies, and other digital marketplaces sell to advertisers: products that write ad copy, generate images, and target the consumers most likely to respond. The FTC wants to know whether those tools help spread impersonation scams and whether platforms should be liable. In the agency's words, platforms "internalize the revenue but externalize the risk." | | ▸ | Waller: Payments Is Building the Rails for AI Agents. Fed Governor Christopher Waller used his Sept. 29 speech at Sibos to describe payments as the part of finance that has moved fastest on AI. The industry has long used machine learning against fraud, adopted large language models early for tasks like reconciliation, and is now building the infrastructure that lets AI agents make purchases on their own. Waller said agentic commerce is at an early stage but could "reshape commerce and payments if adoption scales." He named three problems: proving an agent has authority to pay, deciding who is liable when it buys the wrong thing, and recalibrating fraud systems built around human behavior. Existing liability frameworks could be adapted, he said, and new technical standards could record what a buyer intended and what the agent did. | | ▸ | SEC Seeks Comment on Five New Paths to Accredited Investor Status. On Sept. 30, the SEC issued five notices seeking comment on additional non-financial ways for individuals to qualify as accredited investors. The designations under consideration are U.S. CPAs, CFA charterholders, CFP professionals, holders of FINRA Series 79 and Series 86/87 licenses, and individuals who pass a new accredited investor exam to be developed by FINRA. The exam would be open to anyone 18 or older and is expected to include about 75 multiple-choice questions covering securities, investment risks, disclosures, financial statements, conflicts of interest, and corporate governance. |
Weekly Fintech Policy Brief is written by the Financial Technology Association and appears every Saturday. The views are FTA’s. Lex’s analysis elsewhere in this brief is independent. |
INDUSTRY AND AI SIGNALS | ▸ | September payrolls, October odds: The economy added 29,000 jobs in September, far below economists' expectations, according to the Labor Department report released Friday, October 2; Politico put the unemployment rate at 4.2 percent. Reuters reported the Fed is now seen skipping an October rate increase, and CNBC said traders see little chance of one. Fed officials diverged on Friday: Goolsbee said a hike or a pause are both on the table, Reuters reported, while Hammack told PBS there is still time to weigh the next move. ABA Banking Journal said a continued weakening in labor conditions could soften credit performance in the months ahead. Healthcare led September's job gains. |
| ▸ | Tokenized-deposit plumbing, state cooperation: The Clearing House, the bank-owned payments company, is building an interoperable network that would let banks clear and settle tokenized deposit transactions; it targets an early 2027 launch, American Banker reported. BNY is discussing a partnership with Payward, Kraken's parent, that could span crypto products, custody, wealth management, trading, payments and infrastructure, CoinDesk reported October 2. On October 1, New York's Department of Financial Services agreed with the Wyoming Division of Banking to coordinate examinations, enforcement, licensing and supervision of virtual currency firms. A tokenized deposit remains a deposit, so a bank-run network needs no GENIUS issuer approval. CoinDesk cited unnamed sources. |
| ▸ | Anthropic's risk factors, Broadcom's debt: Anthropic's IPO prospectus warns that government attitudes may hurt its customer relationships, Reuters reported in an exclusive; Yahoo Finance carried the same disclosure. Quartz reported that Broadcom is starting to raise $60 billion in debt to finance AI chips for Anthropic, after Reuters reported Broadcom would lend the lab up to $42 billion to lease those chips. For banks running Claude in operations or customer channels, a provider naming government relations as a business risk is vendor-risk information; for capital-markets desks, a raise that size is underwriting business tied to the AI build-out. Formal marketing could start November 9, Bloomberg reported. |
| ▸ | Nubank on Monzo, no deal: Nubank said it is not pursuing a transaction with Monzo, the UK digital bank, after reports of takeover talks valuing Monzo at about $10 billion, Finextra reported October 1; American Banker said Nubank made the statement in an SEC filing to stop the spread of misinformation. Nubank recently launched a U.S. business. |
POLITICAL & LEGISLATIVE The Justice Department declined to pursue the case the President had called for against Jerome Powell; a new Russia law, meanwhile, hands the executive tariff authority that sanctions teams will watch. | ▸ | Powell, no new probe: Days after President Trump said on September 30 that he had instructed the attorney general to investigate Powell, the former chair who remains a governor, the Justice Department said it will not reopen its criminal probe, Axios and the Financial Times reported. Attorney General Todd Blanche said a lack of oversight over the Fed's renovation, which the FT put at $2.5 billion, is not necessarily a crime. Governors keep for-cause protection after Trump v. Cook, so any removal case would have needed findings of the kind the department has now declined to pursue; the same removal theory still reaches FDIC and NCUA board members. Powell remains a Fed governor. |
| ▸ | Russia sanctions, now statute: A Russia sanctions law enacted as of October 2 gives the executive "secondary tariff" authority over the countries most involved in Russian oil and gas trade, along with Russia itself; it also codifies existing sanctions while expanding them incrementally. Its reach into trade-finance and correspondent books depends on how agencies apply it. Implementation rests with the executive branch. |
| ▸ | OppFi's bank deal under pressure: Senators Elizabeth Warren and Chris Van Hollen urged nonbank lender OppFi to abandon its bank dealmaking, Banking Dive reported, weeks after Enova scrapped its $369 million bid for Grasshopper Bank. The senators hold no vote on the application; their letter adds political scrutiny to a review regulators will run. Enova withdrew on September 16. |
WHAT'S COMING | ▸ | A7 comment clock, Monday: FinCEN's proposed special measure barring U.S. financial institutions from transmitting funds involving the A7 Network's sub-agents is scheduled to publish in the Federal Register on Monday, October 5, starting its 30-day comment period. Banks whose correspondent or remittance flows could touch sub-agents that payment messages may not name should put identification problems on the record. The ban binds only after a final rule. |
| ▸ | Preemption at the Court: The Supreme Court's order list from its September 28 conference, which covers petitions in Cantero (No. 25-1313), Flagstar v. Kivett (No. 25-1350) and Citizens Bank v. Conti (No. 25-1004), is due Monday. The petitions bear on how far state law reaches banks; the FDIC's state bank parity proposal, whose comments close November 23, asks a parallel question. |
WHAT IT MEANS | ▸ | ICBA's suit gives trust-bank counterparties a third event to contract for. Agreements with the new trust banks have been drafted around the OCC's final charter and its stablecoin rule; the suit adds a court order vacating a charter, so termination and repapering clauses should name a judicial ruling as a trigger alongside OCC action. The SEC's October 1 proposal to let advisers hold crypto with state trust companies gives custody clients a route that does not depend on the contested federal charter. |
Dates That Matter OCT 5
2d | Comments close: OCC Rules Regarding the Availability of OCC Information [OCC] · Regulatory Modernization and Relief for Mutual Holding Companies [FRB] · Extensions of Credit to Insiders [FDIC] · Conflicts and Affiliations [CFTC] · Commodity Pool Operators and Commodity Trading Advisors [CFTC] · Disclosure of Information; Extension of Comment Period [FDIC] | OCT 5
2d | Watch: Supreme Court order list for the Sept 28 long conference: Nos. 25-1313, 25-1350, 25-1004 [Watch] |
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