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Saturday, October 10 · Lead Trump's inquiry committee reopens removal fight over Federal Reserve Governor Cook's seat Trump's new inquiry committee reopens the removal fight over Federal Reserve Governor Lisa Cook's seat that, according to the Financial Times, the Supreme Court rebuffed in June. Formed October 9 to investigate allegations of mortgage impropriety against Cook, the White House committee is, in American Banker's description, an effort to remove her from office. Cook's seat carries two votes that matter to banks: one on the federal funds rate, where minutes show most policymakers expect they may need a second increase before year-end, and one on the Board's own rules. No removal order accompanies the announcement. | ▸ | The committee's mandate, as reported: Politico reported that the committee could lead to Cook's removal; The Hill called it a committee of inquiry. Reporting ties the inquiry to allegations about Cook's mortgage statements, with no timetable given for findings. Its members have not been named. |
| ▸ | Cook's response: Cook's lawyers say a hearing will show there is no mortgage fraud case, Reuters reported. No hearing date appears in the coverage. |
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REGULATORY DEVELOPMENTS Treasury and the Commodity Futures Trading Commission (CFTC) each acted on October 9, moving lines that banks screen or book against. Credit access diverged for lenders: the Federal Housing Administration (FHA) widened the scores lenders may use for single-family mortgages; Small Business Administration (SBA) lenders, by contrast, face a tighter underwriting box as the agency's fiscal year opens, so origination desks get opposite signals in the same month. | ▸ | Russian diesel license: Treasury's Office of Foreign Assets Control (OFAC) said on October 9 that, at President Trump's direction, it is "immediately issuing a temporary general license to allow the supply of Russian diesel to the global market." The license's terms and expiry date are not in today's materials, so banks financing or settling refined-product cargoes should read its scope before treating a Russian diesel trade as authorized. Ukraine's President Volodymyr Zelensky criticized the decision as unfair, Axios reported. The license is temporary. |
| ▸ | Event contracts, two CFTC actions: The CFTC on October 9 proposed to define "swap" expressly to include event contracts on sports, politics, culture or weather, describing them as instruments commonly known to the trade as swaps. In an interim final rule the same day, it codified its longstanding position that casino-style gambling, including sportsbook wagers and casino games, falls outside the definition. Banks that deal or clear swaps could see these contracts brought under clearing, trading or margin requirements if the proposal is finalized; Benjamin Schiffrin, director of securities policy at Better Markets, faulted the agency for treating sports or election contracts as derivatives. No comment deadline is set pending Federal Register publication. |
| ▸ | Mortgage scores, SBA underwriting: FHA published a mortgagee letter formalizing the use of VantageScore 4.0 and FICO Score 10T alongside Classic FICO for single-family mortgages, ABA Banking Journal reported. On the small-business side, American Banker reported that the administration implemented stricter SBA underwriting standards earlier this month; an earlier round of tightening in 2025 appears to have contributed to lower loan volumes. The FHA policy takes effect at the start of 2027. |
| ▸ | Fund cross trades: The Securities and Exchange Commission (SEC) proposed on October 9 to amend Rule 17a-7, restoring registered funds' ability to cross-trade most fixed-income securities with affiliates, which the 2020 fund valuation rule effectively restricted. The proposal would also modernize pricing conditions while requiring aggregated reporting of cross-trading activity; bank holding companies that sponsor registered funds would see lower trading friction if it is adopted. Comments run 60 days after Federal Register publication. |
| ▸ | Credit union stablecoin reporting: The National Credit Union Administration (NCUA) proposed 26 stablecoin account and reporting codes extending GENIUS Act reporting to credit unions, CUTimes and other outlets reported. The codes extend GENIUS Act reporting to credit unions' call reports, a benchmark for banks sizing their own coming reporting burden. |
| WEEKLY FINTECH POLICY BRIEF |
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AI policy moved on two fronts this week, at the White House and in Colorado, while the Fed's top bank regulator argued for revisiting rules that no longer fit the market. Here's what fintech should be watching.
Colorado Posts Revised AI Rules. The Colorado Department of Law released a revised draft of the rules that will implement SB 189, the Automated Decision-Making Technology Act. Signed in May, the law repealed and reenacted parts of the state's 2024 AI Act and directs the Attorney General to adopt implementing rules before it takes effect on Jan. 1, 2027.
Written comments are open through Oct. 26, the same day the Department will hold a public hearing to present the rules and discuss the feedback it has received. The law reaches automated tools that materially influence consequential decisions, including in lending and financial services. | ▸ | The White House Stands Up a "Super Intelligence Force." The "AI Force" the President previewed last month now has a name and a leader. On Sunday, President Trump announced the Super Intelligence Force (SIF), a task force chaired by Director of National Intelligence Jay Clayton, who is widely expected to act as the administration's AI czar. The group has 120 days to assess the risks and opportunities of AI and recommend steps the government could take.
Under its charter, the task force will review the authorities agencies already hold, consider protocols for reporting AI-related breaches, hacks, and jailbreaks, and examine how to respond to AI-enabled threats to critical infrastructure. Financial services is among the sectors named, alongside energy. | | ▸ | Bowman Makes the Case for Recalibration. Federal Reserve Vice Chair for Supervision Michelle Bowman spoke at the Atlantic Council on Oct. 1 about modernizing financial regulation. On innovation, Bowman described a principles-based approach to AI, stablecoins, and other new technology, one that lets banks participate while managing operational, third-party, and financial stability risks. That matters for fintech companies that partner with banks. |
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 | ▸ | Revolut's US push: Revolut Chief Executive Nik Storonsky said the company is targeting a US primary listing for any future initial public offering, Bloomberg reported, and that fintech is coming for American Express and JPMorgan in the US, The Business Times reported. Revolut's US bank holds a conditional OCC approval, and Storonsky has said he would cap its lending at 10 to 20 percent of deposits. For banks, a chartered Revolut competes for US deposits directly rather than through a partner bank. |
| ▸ | Household finances, 2022 to 2025: The Fed's triennial Survey of Consumer Finances, released October 9, found real median family income up 7 percent to $82,200 between 2022 and 2025 while real mean family income fell 6 percent to $145,200, according to the Board. Real median net worth rose 2 percent to $215,900. The share of families with any debt held at 77 percent, but the share whose debt payments exceed 40 percent of income rose from 6.5 to 8.6 percent; consumer lenders can set that measure beside their own payment-to-income cutoffs. Separately, the University of Michigan's preliminary October sentiment index fell 3.7 percent to 46.3, ABA Banking Journal reported. Homeownership held at 66 percent. |
| ▸ | Sponsor-bank disclosure suit: Investors sued Coastal Financial, alleging the bank holding company concealed credit losses at fintech partners that reportedly erased $470 million in market value, Crowdfund Insider reported. The claims are allegations in a private suit. No agency action has been reported. |
| ▸ | Agentic payments, the liability gap: Mastercard expanded Agent Pay, its agentic payments program, with trust and intelligence services that give issuers more context on AI-initiated transactions, Finextra reported. The open question sits with issuers: a financial services consultant writing in Payments Dive said no clear legal rule decides who bears the loss when an AI tool exceeds its mandate, a problem for issuers weighing whether to make card credentials available to AI agents. For banks this is the user side of AI, where dispute operations would absorb a mandate breach. Mastercard announced the Agent Pay expansion this week. |
POLITICAL & LEGISLATIVE | ▸ | Shelton joins Treasury: Treasury named Judy Shelton, an economist and former nominee to the Federal Reserve Board, as a counselor in Secretary Scott Bessent's office. She will advise on currency policy with a focus on evaluating financial conditions in China; her prior roles include the European Bank for Reconstruction and Development. Treasury announced the appointment October 9. |
WHAT'S COMING | ▸ | Earnings week, CPI: Big-bank third-quarter reports open next week alongside a fresh consumer price index (CPI) reading, Reuters' week-ahead column reported, with the Wall Street Journal previewing JPMorgan Chase and Goldman Sachs; the prints will show how much of the September rate increase banks have passed through to depositors versus borrowers. CPI arrives the same week. |
| ▸ | Federal Register, October 13: Fed notices on bank holding company formations and changes in bank control are scheduled to publish October 13, alongside an FDIC information-collection notice. An SEC notice on a CME Securities Clearing proposed rule change is set for the same day. All four are on public inspection now. |
WHAT IT MEANS | ▸ | The Cook inquiry reaches the Board's rulebook as well as its rate vote. Governors vote on Board regulations; two Board items are live into year-end: the GENIUS Act stablecoin proposals (91 FR 61580) plus the asset-threshold proposal Vice Chair for Supervision Michelle Bowman said on October 6 the Board would consider later this year. Banks filing on either are addressing a seven-member Board whose membership the White House is now moving to change. Board GENIUS comments close November 30. |
Dates That Matter OCT 13
3d | Comments close: Community Reinvestment Act Regulations [OCC] | OCT 13
3d | Watch: respondents' briefs in opposition due in *Custodia*, S. Ct. No. 26-62 [Watch] | OCT 14
4d | Comments close: Expanded Examination Cycle for Certain Small Insured Depository Institutions and U.S. [OCC] | OCT 14
4d | Watch: comments due on TabaPay's BHC application for Transact Bank, N.A. [Watch] | OCT 15
5d | Comments close: Petition for Rulemaking of Robert Michael Vanleeuwen [FTC] | OCT 16
6d | Effective: Whistleblower Award Determination [CFTC] | OCT 20
10d | Comments close: Request for Comment on the Listing of Compute Derivatives Contracts [CFTC] · Regulation Crypto Assets [SEC] |
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