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Saturday, October 24 · Lead Fed to hold rates Wednesday as Treasury yields climb Federal Reserve policymakers announce their next rate decision on Wednesday, October 28, after a month in which the bond market moved toward them. The 10-year Treasury yield, which reached 5.34 percent on October 8, its highest since April 2002, stood at 4.98 percent on Friday morning. Minutes of the September meeting, which raised the federal funds target to 3.75 to 4 percent, show most officials believe they may need a second increase before year-end. Nearly all economists in an October 21 Reuters poll expect the Fed to skip October. They expect a December increase. | ▸ | What forecasters are pricing: TD Securities said an October hold raises the odds of a December hike. JPMorgan's Yoder told CNBC that the market is doing a lot of the work for the Fed. Janus Henderson's Contopoulos said that if the Fed holds, the 10-year yield could creep higher, so the October decline in long yields depends partly on what the statement says about December. The Fed's next scheduled decision after this one is December 9. |
| ▸ | Consumers and housing into the meeting: Final University of Michigan results put consumer sentiment at 48 in October, down 0.2 percent from September and 10.4 percent from a year earlier. Home purchase cancellations rose to 14.5 percent of pending sales in September. Outside the early months of the pandemic, that is the highest rate on record, according to ABA DataBank. Both readings came out on October 23. |
| ▸ | Flagstar's longer runway: Flagstar now expects to reach its strategic objectives in 2028, a year later than it previously planned, as higher interest rates weigh on profits, American Banker reported. |
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REGULATORY DEVELOPMENTS | ▸ | SEC's 2027 exam list: The SEC's Division of Examinations announced its fiscal 2027 priorities, covering more than 34,000 registrants. The list matters to banks through their broker-dealer and adviser affiliates. It covers adviser conflicts, private funds and private credit. For broker-dealers, it covers financial responsibility, trading practices and AML compliance. It also covers operational resiliency, artificial intelligence, Treasury clearing reforms and tokenization. "The markets we oversee continue to evolve rapidly, and the examination program must evolve with them," the SEC said. Examiners may shift focus during the year. |
| ▸ | States fight dismissal of escrow suit: Oregon and nine other states have opposed the OCC's motion to dismiss their lawsuit over its interest-on-escrow regulations. They argue that the agency unlawfully preempted state escrow-interest laws and that Oregon is a proper venue. The OCC's escrow determination took effect June 18, 2026, for national banks and federal savings associations. The court expects to rule on the OCC's motions by November 20. |
| WEEKLY FINTECH POLICY BRIEF |
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Chopra Outlines California Priorities. Rohit Chopra leads California's new Business and Consumer Services Agency, which includes the Department of Financial Protection and Innovation. In a 100-day update, he said the agency will act as a stopgap where federal oversight has pulled back. His priorities for the months ahead include:
Applying existing laws to AI-enabled fraud.
Shifting licensing and enforcement toward areas federal regulators once led, with penalties aimed at deterrence.
Investigating cross-cutting issues such as algorithmic pricing. | ▸ | OCC Finalizes GENIUS Act Rule. On October 21, the OCC issued the first final federal rule implementing the GENIUS Act. It takes effect January 18, 2027. Compared with the February proposal, the final rule takes a more flexible, principles-based approach to reserve diversification. It also drops presumptions that certain affiliate and third-party arrangements violate the ban on paying interest. However, it gives existing rewards programs no safe harbor, so each will be reviewed on its facts. BSA/AML and sanctions requirements will follow in a separate rulemaking with Treasury. | | ▸ | FDIC Chairman Hill at Money20/20. In a keynote conversation with FTA President and CEO Penny Lee, FDIC Chairman Travis Hill described a voluntary, industry-led standard-setting body. Under that model, independent assessors would vet fintech partners against common standards, and community banks could rely on those reviews instead of each repeating the same diligence. On fraud, Hill said AI is making identity verification harder. He noted that the FDIC is working with Treasury on a longer-term approach and has discussed funds-availability rules with the Fed, so banks could hold funds in cases of obvious fraud. |
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 | ▸ | Hormuz attacks and Gulf exports: Ship attacks in the Strait of Hormuz hit a record high in October, Reuters reported. Treasury Secretary Scott Bessent said on X that "oil exports from the Persian Gulf are roaring back and have surpassed pre-conflict levels." He also said Treasury's Operation Economic Outcast has depleted Iran's shadow tanker fleet; the US says it can sustain its blockade of Iran for the foreseeable future, Iran International reported. No new sanctions designations accompanied the statements. |
| ▸ | Who answers for agents: Large institutions set out how they will govern AI acting on customers' behalf. American Express, in its October 23 third-quarter earnings presentation, set rules governing how outside agents reach customers' accounts and benefits. At Citi, Naveed Anwar, global head of AI, digital and data platforms in the services business, said at Money20/20: "There are places in which we want to go faster. This is not one of those places." Goldman Sachs Chief Executive David Solomon wrote in the Financial Times on October 22 that individual decision makers should be held accountable for what their AI systems produce. |
| ▸ | Anthropic's prospectus still private: Anthropic had not made its IPO filing public by Friday, and Renaissance Capital's week-ahead note said investors are holding their breath as it nears. Revenue reached $16.3 billion in the first half of 2026, up from $1.1 billion a year earlier, the Motley Fool reported, citing the Wall Street Journal's account of a draft prospectus. The same report said the company has committed to more than $600 billion in spending over the next decade. A listing could come as early as mid-November. |
WHAT'S COMING | ▸ | Outbound investment comment clock: Treasury's October 22 proposal on outbound investment security is scheduled to publish in the Federal Register on October 26. Comments are due December 7. U.S. persons and their controlled foreign entities would have to notify Treasury of certain deals in the covered technologies, which brings banks with foreign subsidiaries into scope. Their objections on scope and notification mechanics have until that date. |
ALSO NOTED | ▸ | HSBC launched RedCoin, a Hong Kong dollar stablecoin regulated by the Hong Kong Monetary Authority, on its PayMe wallet on October 23, PYMNTS said. | | ▸ | SVB Financial Trust will appeal the Federal Deposit Insurance Corporation's (FDIC) win over a $1.7 billion claim, Bloomberg Law said. | | ▸ | Rhode Island Attorney General Peter Neronha sued Meta on October 22, alleging it profits from financial scam ads, PYMNTS said. | | ▸ | American Express will cut roughly 3,500 employees, about 4.5 percent of its workforce, CEO Stephen Squeri said, according to Banking Dive. | | ▸ | The Senate's top Democratic investigator is looking into Tether payments to Bo Hines' firm, CoinDesk said. |
WHAT IT MEANS | ▸ | Wednesday's Fed decision lands on securities books that October has already partly repriced. Unrealized losses on fixed-rate securities widened as the 10-year reached 5.34 percent on October 8. They have narrowed with the yield at 4.98 percent on Friday morning. If a hold pushes long yields back up, as Contopoulos expects, that recovery reverses before the fourth-quarter marks are set. The OCC's new minus 300 and minus 400 scenarios give asset-liability committees a peer reference for the opposite move. That down-rate case had dropped out of most planning when the Fed began raising in September. |
Dates That Matter OCT 26
2d | Watch: Colorado AG rulemaking hearing; comment period closes [Watch] | NOV 2
9d | Comments close: Exemption of Debt Obligations Issued by the European Union [SEC] | NOV 2
9d | Effective: Unsafe or Unsound Practices, Matters Requiring Attention [OCC] · Enhanced Transparency and Public Accountability of the Supervisory Stress Test Models [FRB] | NOV 3
10d | Comments close: Transfer Agent Rules [SEC] | NOV 4
11d | Comments close: Loans to Executive Officers, Directors, and Principal Shareholders of Member Banks [FRB] · Proposal of Special Measure Prohibiting the Transmittal of Funds Regarding Transactions [FinCEN] · Extensions of Credit to Insiders [FDIC] |
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30-Day Document Volume
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Today's inputs
| 26 docs | 20 high priority | 36 social | 291 news |
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Monitoring 100+ sources across federal agencies, state regulators, expert newsletters, social media, and news wires · Methodology |
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Lex
LexRegPulse Analyst
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