Yesterday, President Trump signed an Executive Order titled “Integrating Financial Technology Innovation into Regulatory Frameworks.” The Order directs federal financial regulators to review and streamline regulations, guidance, supervisory practices, and application processes that may impede financial technology (fintech) innovation and competition, and it asks the Federal Reserve to evaluate potential direct access to Reserve Bank accounts and services for uninsured depository institutions and certain non‑bank financial firms, including digital asset companies. The Order is the latest in a series of administration actions aimed at positioning the U.S. as a global leader in digital assets and financial technology.

Policy Focus: Lowering Barriers and Reducing “Incumbent Protection”

The Order declares that fintech firms “provide innovative services and solutions that enhance access to financial products and services and create economic opportunity for all Americans,” but that outdated and fragmented regulation can favor incumbent institutions over new entrants. It sets a national policy to:

• Streamline regulatory processes;
• Reduce unnecessary barriers to entry; and
• Encourage collaboration between fintech firms, federally regulated financial institutions, and federal financial regulators.

The definition of a “fintech firm” is broad. It covers non‑bank companies that use or develop technology to offer or support financial products or services, including payments, lending, deposit‑like products, trading, custodial and fiduciary services, digital asset‑related services, and blockchain‑based services, as well as the full range of financial activities listed in § 4(k)(4) of the Bank Holding Company Act. The Order also defines “financial products and services” to track activities permissible for banks and credit unions and those listed in Appendix A to 12 C.F.R. Part 242.

“Federal financial regulators” are defined to include the Consumer Financial Protection Bureau, the Securities and Exchange Commission, the National Credit Union Administration, the Commodity Futures Trading Commission, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency. While the Order does not mention the Federal Reserve System (the Fed) in this definition, it separately addresses the Fed in § 4.

Directions to Federal Financial Regulators: 90‑ and 180‑Day Timelines

Section 3 of the Order directs each federal financial regulator to conduct a top‑to‑bottom review of its existing regulatory and supervisory framework through the lens of fintech and competition:

• Within 90 days, each regulator must review its regulations, guidance, supervisory practices, and application processes “to identify those that could be updated to facilitate innovation, and competition” in financial products and services, particularly for small and emerging fintech firms.
• That review must specifically identify:
  • Regulations, guidance, orders, no‑action letters, and other items that unduly impede fintech firms from entering into partnerships with federally regulated institutions (banks, credit unions, broker‑dealers, investment advisers, futures commission merchants, etc.); and
  • Regulations and other materials that could be amended to streamline application processes for fintech firms seeking bank charters, credit union charters, deposit or share insurance, and other federal licenses, registrations, and authorizations.

The Order explicitly calls for balancing innovation and competition against safety and soundness, consumer and investor protection, market integrity, financial stability, and oversight. In other words, the directive is not simply to deregulate, but to reassess whether existing tools and processes are fit for a digital, technology‑driven financial sector.

• Within 180 days, each regulator, “in consultation with the Assistant to the President for Economic Policy,” must take steps to encourage innovation based on its review. The Order does not prescribe particular outcomes, but it sets a clear expectation that agencies not only study but act.

Federal Reserve Access: Revisiting Master Accounts and Instant Payments

Section 4 focuses specifically on the Federal Reserve and access to Reserve Bank payment accounts and services:

• The Board of Governors is “requested” (not directed) to conduct the same type of regulatory review described in § 3.
• In addition, the Board is requested to conduct a comprehensive evaluation of the legal, regulatory, and policy framework governing access to Reserve Bank accounts and services by:
  • Uninsured depository institutions and non‑bank financial companies, including firms engaged in digital asset and other novel financial activities; and
  • Firms functioning as direct participants in real‑time (instant) payment networks.

Within 120 days, the Board is requested to submit a report to the President, through the Assistant to the President for Economic Policy, addressing:

1. The Fed’s legal authority under the Federal Reserve Act and other federal law to extend direct access to “covered firms”;
2. Options for expanding access, to the extent permitted by law, subject to appropriate risk‑management requirements;
3. Legal impediments that currently preclude direct access, and legislative or regulatory options that would enable such access while mitigating payment‑system, financial‑stability, and macroeconomic risks; and
4. The extent to which individual Reserve Banks have legal authority to act independently in granting or denying access, and what Board‑level regulations or policies exist or are needed to ensure consistent evaluation of applications across all 12 Reserve Banks.

If the Board determines that existing law permits direct access for some covered firms, the Order requests that it establish transparent application procedures and decide complete applications within 90 days of filing.

Our Take:

The Executive Order is best understood as a high‑level policy and process directive rather than an immediate change to substantive law. The administration is clearly prioritizing financial innovation, removing regulatory burdens, and promoting fintech competition to facilitate integration of digital assets and other novel fintech into traditional financial services and payment systems, and views existing regulatory frameworks as favoring incumbents in ways that may no longer be justified. However, the Order does not change existing law but rather must be implemented “consistent with applicable law,” and expressly states that it creates no enforceable rights.