To keep you informed of recent activities, below are several of the most significant federal events that have influenced the Consumer Financial Services industry over the past week.
Federal Activities:
On February 18, the U.S. Department of the Treasury announced the conclusion of a major public‑private initiative, launched under President Donald Trump’s AI Action Plan, to strengthen cybersecurity and risk management for artificial intelligence (AI) in the financial services sector, including the staged release throughout February of six resources developed with industry and federal and state regulators to support secure and resilient AI adoption across the U.S. financial system. Through the Artificial Intelligence Executive Oversight Group (AIEOG) — a partnership of the Financial and Banking Information Infrastructure Committee and the Financial Services Sector Coordinating Council — senior leaders from financial institutions and regulators collaborated to identify gaps in AI use and produce practical tools addressing AI-specific cybersecurity risks, governance, data practices, transparency, fraud, and digital identity, with a particular focus on helping small and mid-sized institutions. Treasury emphasized that the resources are designed to enable confident, secure AI deployment without imposing prescriptive requirements, thereby enhancing resilience and cyber defenses while fostering innovation, and advancing the administration’s goals of securing AI data, infrastructure, and models, promoting best practices, and supporting global adoption of U.S. AI systems. For more information, click here.
On February 17, the Office of the Comptroller of the Currency (OCC) issued OCC Bulletin 2026-2 announcing a notice of proposed rulemaking that would amend 12 CFR 4 to establish revised procedures and policies for OCC‑supervised entities, including all community banks, to appeal material supervisory determinations, replacing the OCC’s existing bank appeals guidance. The proposal would create an independent “appeals board” to decide appeals, clarify that appeals are subject to a de novo standard of review, set standards for when stays of material supervisory determinations may be granted pending appeal, and strengthen the OCC ombudsman function. It would also establish standards for expedited appeals and expressly prohibit retaliation against a bank for filing an appeal. The OCC states that these changes are intended to enhance the independence and efficiency of the appeals function. Comments to the proposed rulemaking must be submitted to the agency within 60 days after publication in the Federal Register. For more information, click here.
On February 17, the Commodity Futures Trading Commission (CFTC) announced that it filed an amicus brief in the U.S. Court of Appeals for the Ninth Circuit in North American Derivatives Exchange, Inc. v. The State of Nevada ex rel. Nevada Gaming Control Board, reaffirming its exclusive jurisdiction over U.S. commodity derivatives markets, including event contract “prediction” markets. The CFTC argued that CFTC‑registered exchanges have been targeted by lawsuits seeking to restrict access to event contracts and encroach on the agency’s sole regulatory authority, characterizing these efforts as an unlawful “power grab” that ignores the Commodity Exchange Act and decades of precedent. The brief traces the legal history of the CFTC’s exclusive jurisdiction — highlighting the agency’s 1992 recognition of event contracts in the Iowa Electronic Markets and Congress’s post‑2008 grant of comprehensive authority over contracts based on broadly defined “commodities” — and emphasizes that states and other federal entities lack authority to further regulate markets within that jurisdiction, warning that such attempts would have destabilizing economic effects while event contracts themselves serve important hedging, risk‑management, and information functions. For more information, click here.
On February 17, the Treasury Office of Inspector General (OIG) issued Audit Report OIG-26-015, Anti-Money Laundering/Terrorist Financing: Audit of FinCEN’s Management of BSA Data — User Access and System of Records Notice, finding that the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) did not fully manage access to Bank Secrecy Act (BSA) data in accordance with applicable laws, regulations, guidance, and internal standard operating procedures, particularly with respect to granting and overseeing bulk data access, updating and complying with its BSA System of Records Notice (SORN), and executing, updating, tracking, and maintaining memoranda of understanding (MOUs) with external agencies that use BSA data. The audit identified eight key deficiencies, including the failure to document the decision to offer bulk data, to reevaluate agencies’ continuing need for such access, to reflect bulk access in the BSA SORN or republish it as required, and to ensure all relevant agencies had current, properly executed MOUs. OIG made 14 recommendations aimed at strengthening FinCEN’s controls over BSA data access — such as conducting and documenting risk assessments and reevaluations for bulk access, revising the SORN, tightening Standard Operating Procedure (SOP) requirements around MOUs, and improving recordkeeping and tracking — and FinCEN concurred, reporting that it has begun reassessing bulk access arrangements, revising SOPs and the SORN, terminating its platform program, and refreshing its inventory of BSA data MOUs, with most corrective actions expected to be completed in 2026. For more information, click here.
On February 17, Federal Reserve Governor Michael S. Barr, speaking before the New York Association for Business Economics, described a labor market that has slowed and is in a “delicate” balance with near‑zero job and labor force growth, and inflation stuck around 3% amid tariff‑driven goods price pressures, concluding that it will likely be appropriate to hold policy rates steady for some time until there is clear evidence of sustainably easing goods inflation and stable labor conditions. He then argued that generative AI is likely to become a general‑purpose technology and potentially an “invention in the method of invention,” with long‑run benefits for productivity and living standards but potentially significant short‑term labor market disruptions. Barr outlined scenarios ranging from gradual, manageable AI diffusion with retraining and higher real wages, to a rapid “jobless boom” with widespread displacement and severe distributional challenges, to a stall in AI capabilities that shifts risks toward overinvestment and financial stress, emphasizing that emerging evidence so far aligns most closely with gradual adoption and firm‑level reallocation rather than mass job loss. He highlighted research showing early productivity gains from AI tools, nascent but uneven labor‑market effects (especially for some younger workers), and ambiguous implications for inequality, and stressed that policy responses outside monetary policy — education, training, and social insurance — will be critical to managing the transition. For monetary policy, Barr noted that a sustained AI‑driven productivity boom could raise the neutral rate (r*), support faster non‑inflationary growth, and increase capital demand, while near‑term AI‑related investment and energy constraints could be inflationary, reinforcing his view that AI is unlikely to justify lower policy rates and instead will require the Fed to closely monitor structural changes in the economy and labor markets. For more information, click here.
On February 13, FinCEN announced that it has launched a dedicated webpage to confidentially receive whistleblower tips regarding fraud, money laundering, sanctions violations, and related misconduct implicating the BSA, U.S. sanctions programs, and other laws designed to protect the U.S. financial system and national security. Through FinCEN’s Office of the Whistleblower, individuals can submit detailed, well-documented information about violations or conspiracies, and may be eligible for monetary awards if their tips lead to successful enforcement actions. For more information, click here.
On February 13, FinCEN issued an order granting exceptive relief from the longstanding requirement that covered financial institutions (CFIs) identify and verify the beneficial owners of legal entity customers every time a new account is opened. CFIs now need to collect and verify beneficial ownership information once per customer and then update it only when risk or new information warrants. While CFIs must still comply with all other BSA and anti-money laundering and counter-financing terrorism (AML/CFT) obligations, the new order represents an easing of the requirements established by FinCEN’s Customer Due Diligence regulation (the 2016 CDD rule) regarding the diligence CFIs must perform on legal entity customers as part of AML/CFT programs. Companies should consider whether it makes sense to maintain stricter past compliance practices or revise current policies to fit the new rules based on an individualized risk assessment. For more information, click here.
On February 12, Senator Bernie Moreno (R‑Ohio) and Representative Warren Davidson (R‑Ohio) introduced the American Lending Fairness Act of 2026, a bill aimed at preventing states from using Depository Institutions Deregulation and Monetary Control Act of 1980 (DIDMCA) opt‑outs to impose their own interest rate caps on loans made by out‑of‑state state‑chartered banks and credit unions. The legislation would restore federal interest rate preemption for state‑chartered institutions in interstate lending, preserve state authority over in‑state charters, and reestablish competitive parity with national banks by protecting interest rate exportation across state lines. Framed as a direct response to the Tenth Circuit’s 2025 decision in National Association of Industrial Bankers v. Weiser, which allowed states like Colorado to apply their caps to out‑of‑state lenders, the bill has drawn strong support from a broad coalition of banking, credit union, fintech, and consumer finance trade groups, all emphasizing that a clear, uniform national standard is essential to maintaining the dual banking system, ensuring access to regulated credit, and avoiding a fragmented patchwork of state‑by‑state rules.For more information, click here.
On February 11, the U.S. House Financial Services Subcommittee on Housing and Insurance held a hearing titled “Homeownership and the Role of the Secondary Mortgage Market” to examine how the secondary market, especially Fannie Mae and Freddie Mac, affect housing affordability and the structure of U.S. mortgage finance. Chairman French Hill highlighted both the critical role that Government-Sponsored Enterprises (GSEs) play in providing liquidity and supporting lower mortgage rates, and the risks of poor oversight and mission creep for taxpayers and the broader economy, while Subcommittee Chairman Mike Flood emphasized the unique benefits of the 30‑year fixed-rate mortgage and the global capital that flows into the U.S. system to support homeownership. Witnesses described the secondary mortgage market as a complex ecosystem extending well beyond the GSEs, and offered differing reform visions, such as reviving the private-label securities market or shifting away from the GSE model by moving Fannie and Freddie from conservatorship into receivership and ultimately liquidating them through limited‑life regulated entities. For more information, click here.
On February 11, Freddie Mac issued Bulletin 2026-2 (Servicing), announcing immediate and future servicing updates, including May 1, 2026, changes to loss mitigation that require forbearance plans (including disaster-related forbearance) to be applied in one- to three-month increments, updates to disaster forbearance extensions via Resolve, revised Flex Modification eligibility for disaster-impacted borrowers, and enhanced foreclosure protections for properties damaged by fire, flood, or other disasters. The Bulletin refines the evaluation hierarchy in Section 9201.2 to better align with Fannie Mae, requiring servicers to distinguish between temporary and permanent hardships and permitting short sale consideration without first evaluating for home retention in certain cases. It also announces Resolve enhancements allowing repayment plans and forbearance agreements to be submitted via API or UI beginning April 27, 2026, with mandatory Resolve reporting and adoption of the Retention v3 API schema by October 1, 2026, and eliminates separate EDR reporting for those transactions. Additional changes expand servicers’ quality control obligations to include periodic portfolio reconciliation reviews, update contact information and terminology, revise interest calculation guidance, enhance fraud reporting and information security requirements (including defining “Freddie Mac Critical Data” effective January 1, 2027), and make various guide refactoring and administrative updates. For more information, click here.
State Activities:
On February 17, the California Department of Financial Protection and Innovation (DFPI) announced that it ordered Coinme, a major crypto kiosk operator, to refund an additional $175,000 to California consumers after finding that the company violated the California Digital Financial Assets Law by charging fees and markups above statutory maximums and omitting key information — such as customer names and exchange sources — on more than 4,050 receipts. This action, which follows a June 25, 2025, DFPI order requiring Coinme to pay $51,700 in restitution to California residents as part of a $300,000 penalty for earlier transaction‑limit and disclosure violations, reinforces DFPI’s focus on ensuring that crypto kiosk operators in venues like grocery and convenience stores comply with DFAL and do not exploit the largely instantaneous, nonrefundable nature of these transactions. DFPI Commissioner KC Mohseni emphasized that the agency will act to secure refunds when consumers are overcharged and warned digital asset companies that they are expected to follow state law, while also encouraging consumers using crypto kiosks to remain vigilant about fees and potential scams involving cryptocurrency payments.For more information, click here.
On February 9, the Washington Department of Financial Institutions’ Division of Consumer Services issued a Consent Order against CoinZoom, Inc., requiring the company to cease and desist from violating the Uniform Money Services Act, surrender its Washington money transmitter license within 90 days and pay any outstanding assessments, refrain from holding itself out as a licensed money transmitter for Washington residents unless and until properly licensed, and notify all Washington customers within 10 days of the order with clear instructions on how to withdraw funds and close their accounts, allowing at least 60 days for penalty‑free withdrawals and remitting any unclaimed funds to the Washington Department of Revenue’s Unclaimed Property Program within 90 days. The order further prohibits CoinZoom from participating in the Washington money transmitter industry in any capacity until February 9, 2029, requires payment of a $150,000 civil fine (with $50,000 stayed through February 9, 2029, contingent on full compliance) and a $4,170 investigation fee, and resolves prior Statement of Charges alleging multiple violations related to net worth, reporting, and recordkeeping, without any admission of wrongdoing by CoinZoom. For more information, click here.