U.S. Banks Expect Victory in Capital Requirements as Trump Regulators Revamp Rules

U.S. Banks Expect Victory in Capital Requirements as Trump Regulators Revamp Rules

As President Donald Trump’s regulators revamp bank rules, big lenders expect their capital requirements could fall, in a stunning victory for the industry which faced a big hike under former President Joe Biden, according to senior industry executives.

Aiming to cut red tape that Trump’s agency picks say is hurting the U.S. economy, they are working on the most sweeping overhaul of U.S. capital rules since the global financial crisis of 2008.

In addition to narrowing the “Basel Endgame” capital hikes which sparked unprecedented pushback from Wall Street banks, the Fed plans to reduce a capital surcharge levied on risky global banks, shrink a key leverage constraint, and overhaul annual tests that gauge whether lenders can withstand an economic shock.

The country’s largest lenders, which have lobbied hard for the long-sought review, are optimistic that the changes combined will result in their capital levels remaining flat or falling, said six industry and regulatory sources, including three top bankers.

That expected outcome, reported here for the first time, marks a dramatic turnaround for the industry which faced a 19% hike in 2023 under the draft Basel capital rules which proposed changes to how big banks gauge lending and trading risks.

While the Fed last September said that hike would be halved, the plan was never finalized and died with Trump’s election.

Big banks have long complained that capital rules are excessive and poorly calibrated, and that some of that cash could better serve the economy through lending. They also argue that they weathered the COVID-19 economic shock just fine.

Critics say efforts to chip away at the capital regime are dangerous, and could leave the industry vulnerable at a time when the outlook for the U.S. economy is growing cloudy.

Read more from By Lananh Nguyen, Nupur Anand, Pete Schroeder and Tatiana Bautzer at Reuters

Majority of Americans feel retiring “on-time” isn’t achievable

A new survey from TIAA has found that most Americans believe the dream of retiring between 65 and 70 is an unattainable goal.

The survey of 1,000 U.S. adults between the ages 18-65 found that nearly two-thirds of Americans plan on working until they are no longer physically able to do so. Only 37 percent of U.S. adults said they believe retiring on time is realistic for them. Part of TIAA’s 2025 American Retirement Confidence Survey, the report found that nearly a third of Americans (30 percent) are not confident they will be able to cover day-to-day expenses for the remainder of their lives.

“Americans clearly want peace of mind in retirement, but the reality is that too many people either aren’t saving enough or aren’t confident in their ability to plan,” Kourtney Gibson, CEO of Retirement Solutions at TIAA said. “We’re seeing the consequences of a system that has left millions without proper guidance. TIAA’s findings reaffirm the importance of products that offer actual guarantees, personalized financial advice, and workplace retirement plans in helping people achieve the retirement security they deserve.”

Click here to read more from Liz Carey at Financial Regulation News

NCUA Posts 2026–2027 Proposed Budget
Agency Accepting Comments

ALEXANDRIA, VA (September 25, 2025) – The National Credit Union Administration’s staff draft budget for 2026–2027 is now available on the agency’s website for review and comment. The NCUA has also submitted the proposed budget for publication in the Federal Register, and the comment period remains open until October 24.

The proposed combined 2026 budget is $313.8 million, a 20.6 percent decrease from the 2025 budget. Three main drivers contribute to the reduction in proposed 2026 budget levels: a 23.0 percent reduction to NCUA staffing levels, a 34.1 percent reduction to contracted services budgets, and a 13.4 percent reduction in budgets for employee travel.

The NCUA’s 2026–2027 staff draft budget justification includes three separate budgets. The proposed operating budget is $292.4 million. The proposed 2026 capital budget is $18.1 million, which includes $10.0 million for implementation of the NCUA’s reorganization plan for 2026 along with investment in systems to increase efficiency and meet other administration priorities. The proposed Share Insurance Fund administrative budget is $3.3 million. The proposed budget summary and detailed budget justifications can be found on the Budget and Supplementary Materials page(Opens new window) on NCUA’s website.

To comment on the proposed budget:

The agency will issue a notice about the public hearing on the budget on a future date.

American Bankers Association Relaunches Consumer Protection Campaigns

By Melina Druga, Financial Regulation News

The American Bankers Association (ABA), an organization representing the United States banking industry, relaunched two consumer protection campaigns on Wednesday that aim to help consumers and small businesses recognize and avoid fraud and scams. The relaunch corresponds with National Cybersecurity Awareness Month.

Banks nationwide will help ABA with coordinated outreach efforts to promote the consumer protection tips included in the two campaigns.

The #BanksNeverAskThat campaign is in its sixth year. It educates consumers on common ways scammers try to impersonate banks. This year’s theme encourages people to trust their instincts and recognize when something feels off.

The #PracticeSafeChecks campaign is in its second year. It encourages small businesses to adopt digital payment options and offers practical tips for safer check usage.

“Banks remain committed to winning the fight against fraud and the best way to do that is to help bank customers spot scams before they can do any damage,” Rob Nichols, ABA president and CEO, said. “The #BanksNeverAskThat and #PracticeSafeChecks campaigns have helped millions of consumers protect themselves from bad actors, and with the help of banks across the country, we’re confident this year’s campaigns will be even more successful.”

More than 2,500 banks have participated in one or both of the campaigns.

FICO Scores are the credit card standard, throughout the account lifecycle.

Top issuers use them at the acquisition point, they become the foundation for assessing credit quality on regulatory reports like Current Expected Credit Loss, automated credit line increases consider them, collection groups use them to triage resources, and when it comes time to securitize portfolios in capital markets, the FICO Score is a universal risk comparison tool.

FICO Announces the Average U.S. Credit Score Dropped
The FICO® Score Credit Insights Fall 2025 report announced a modest drop in the aggregate U.S. score:

  • National Average FICO® Score at 715: The average score dipped two points from 2024 (although remained stable since FICO’s last update), driven by rising credit card utilization and a spike in missed payments, in part due to resumed student loan delinquency reporting.

A two-point drop is not the sign of a major crisis, but it does suggest that lenders need to keep their eyes peeled for hot pockets in delinquency. The return of student loan collections is a flag, which affects several age cohorts. In this segment, keep an eye on ability to repay issues. According to this source, the average student loan payment is $536 per month, enough to trigger financial disruption in many households.

And with increased line utilization, a FICO Score element that has been around for decades, keep an eye out on ascending revolving debt. This is a natural extension of people’s budgets under pressure. Remember, there is $1.2 trillion in revolving debt, and a whopping $4 trillion in open to buy on consumer credit cards, so issuers should keep an eye on decreasing lines, just as much as they talk about increasing lines. For more information on credit line decrease programs see Reducing Operational Risk Through Careful Credit Line Decreases.

Click here to read more from Brian Riley in Payments Journal

The Federal Deposit Insurance Corporation (FDIC) has proposed significant revisions to its application procedures for banks seeking to establish a branch or relocate a main office or branch, marking a major shift in regulatory expectations for routine transactions.

In its recent proposed rule, the FDIC aims to simplify requirements under 12 CFR Part 303, particularly Subpart C, by eliminating certain public notice and comment requirements, streamlining application content, and revising processing timeframes.

The proposed rule would apply to state-chartered non-member banks, including industrial loan companies, state savings associations, and insured branches of foreign banks. Comments are due September 16, 2025.

Key Takeaways

  • The proposal’s streamlined procedures would generally support more branches and deals. The proposal would remove newspaper publication and various public comment requirements, and introduce short, predictable timelines, including applications being deemed approved for eligible institutions after a certain amount of time without any further action by the FDIC. The proposal would lower the risk of approvals stalling for branch openings, relocations, and consolidations, and should make transaction timelines more reliable.
  • The proposal would likely reduce compliance burdens and better reflect modern banking and customer preferences. Clarifying that remote service units (RSUs) (e.g., ATMs that include other functions) are not “branches” would avoid unnecessary filings, and the removal of non-statutory newspaper publication requirements would streamline routine applications.
  • The changes would harmonize certain aspects of the FDIC’s branch regulations with OCC regulations, especially concerning RSUs, reflecting modern banking practices as well as continued coordination among the federal banking agencies. If states and the FDIC take the same approach that the OCC has taken with regard to RSUs, the proposal could open the door to more creative solutions for fintech-bank partnerships.

Read more by Max Bonici, Stephen T. Gannon, and Paige Knight at Davis Wright Tremaine, LLP

The Consumer Financial Protection Bureau is pulling back further from the role it has played in recent years, proposing a rule that would limit its ability to supervise nonbanks.

Entities ranging from buy now, pay later services to digital wallets would continue to be exempt from the CFPB’s oversight. “It is essential that the Bureau focus only on the specific categories of products and services that Congress charged the Bureau with overseeing,” the CFPB’s proposal reads. The CFPB was established by the Consumer Financial Protection Act of 2010, before Venmo, Zelle, and Affirm even existed.

The rule specifically limits the types of businesses the CFPB can regulate. As a result, it expects to designate fewer entities for supervision. The public is invited to submit comments on the proposal by September 25.

Rolling Back the Agency
This move aligns with the Trump administration’s efforts to roll back the CFPB’s powers. Earlier this month, a federal appeal court allowed the administration to proceed with plans to cut more than 80% of the agency’s workforce and cancel the lease on its headquarters.

The CFPB currently has the legal authority to supervise any nonbank deemed to engage in conduct that poses risks to consumers through financial products or services. The Biden administration sought to expand that authority by issuing a rule that would have covered products and services such as digital wallets and payment apps. In the past, the CFPB has argued that entities such as payment apps, which offer services similar to traditional banks, should be subject to the same consumer protections.

Click here to read more from Tom Nawrocki at PaymentsJournal

Fraudsters are borrowing from growth marketers’ playbooks. They’re segmenting, personalizing, and timing their outreach to lure more victims in less time.

A new PYMNTS Intelligence study, “How Scammers Tailor Financial Scams to Individual Consumer Vulnerabilities,” argues that mass personalization has become the defining feature of modern fraud. Based on a survey of 10,103 U.S. consumers fielded July 26–Aug. 19, 2024, the report finds 3 in 10 adults, roughly 77 million people, lost money to scams in the past five years, with many suffering losses above $500.

Rather than hunting victims at random, criminals align messages with a target’s age, income, and habits, then pick the first-contact channel most likely to feel “normal” to that person. The result isn’t just financial damage; it’s erosion of trust in banks, payments, and digital commerce.

By the numbers: real‑time perception vs. reality

  • Channel realism beats consumer intuition. For Gen Z, 21% of successful scams began on social media, a channel younger consumers use daily and may view as routine. Among baby boomers and seniors, email (23%) and phone calls (21%) were the most common first touchpoints, mirroring channels they consider familiar and legitimate.
  • The first touch matches the scheme. Online platforms accounted for 42% of initial contacts in fake eCommerce scams, while phone calls dominated debt‑collection schemes at 39%, choices that mirror how legitimate sellers and collectors typically engage.
  • The tactics change as objectives change. In job‑listing scams, 86% of victims said fraudsters posed as trusted employers; in debt‑collection scams, 83% reported trusted‑entity impersonation. Threats and coercion featured in 22% of identity‑theft cases and 42% of government‑benefit scams, a reminder that fear, not just opportunity, drives compliance.

Click here to read more, courtesy of PYMNTS.com

Once considered adversaries vying for the future of consumer banking, credit unions (CUs) and FinTechs are transforming their relationships.

The PYMNTS Intelligence report “From Rivals to Partners: The Rise of Credit Union-FinTech Collaboration,” a Velera collaboration, found that this pivot is largely fueled by escalating member expectations for robust mobile banking and seamless digital payment solutions, which in turn offer CUs growth opportunities at scale.

The shift from competition to collaboration is seeing CUs become FinTech clients. In November 2023, 16% of FinTechs that engaged with CUs viewed them as rivals. By November 2024, that figure plummeted to 1.9%.

Over the same period, the share of FinTechs identifying as vendors to CUs soared to 98%. FinTechs’ growing recognition of CUs’ desirable attributes as customers includes the fact that these banks have decades of history as member-first models and a stable, loyalty-driven consumer base.

For their part, CUs perceive FinTechs as essential technology providers, not market disruptors. Only 12% of CUs named FinTechs as top competitive threats, a contrast to the 35% who cited other CUs or community banks.

Click here to read more, courtesy of PYMNTS.com

CUbroadcast previews a series of the upcoming 60th NASCUS State System Summit, giving a great look at what’s ahead, September 17–19, 2025, in San Antonio.

Both previews highlight why the NASCUS Summit is the place for regulators, credit unions, and industry partners to come together for meaningful dialogue and forward-looking solutions.

Former DOJ prosecutor and now crypto leader Amanda Wick, Principal at Incite Consulting LLC, offered her perspective on the need to modernize outdated laws, understand the risks and opportunities in digital finance, and embrace blockchain’s potential.

Amy Hunter, Director of Credit Unions at the Washington State Department of Financial Institutions and NASCUS Regulator Board Vice Chair, shared why she’s looking forward to conversations on risk management, green lending, and the impact of cryptocurrency—while also stressing the importance of strong collaboration between regulators and credit unions.

Want to hear more? Join us at the 60th Annual NASCUS State System Summit

NASCUS Summary on the House Financial Services Committee Request for Feedback on Current Federal Consumer Financial Data Privacy Law and Potential Legislative Proposals
July 31, 2025

The House Committee on Financial Services issued a request for feedback from the public on current federal consumer financial data privacy law and potential legislative proposals to account for changes in the consumer financial services sector.

Comments and answers to the questions below must be received by August 29, 2025.

Questions Posed

The committee is requesting feedback to the following questions as well as any additional comments members of the public wish to share.

  • Should we amend the Gramm-Leach-Bliley Act (GLBA) or consider a broader approach?
  • Should we consider a preemptive federal GLBA standard or maintain the current GLBA federal floor approach?
  • If GLBA is made preemptive federal standard, how should it address state laws that only provide for a data-level exemption from their general consumer data privacy laws?
  • How should GLBA relate to other federal consumer data privacy laws, both a potential general data privacy law and current sector-specific laws?
  • Should GLBA “financial institutions” be subject to entity level or data level exemptions from these laws?
  • How should we define “non-public personal information” within the context of privacy regulations?
  • Does the term “personally identifiable financial information” in GLBA require modification?
  • Do the definitions of “consumer” and “customer relationship” in GLBA require modification?
  • Does the current definition of “financial institution” sufficiently cover entities that should be subject to GLBA Title V requirements, such as data aggregators?
  • Are there states that have developed effective privacy frameworks?
    • Which specific elements from these state-level frameworks could potentially be adapted for federal implementation?
  • Should we consider requiring consent to be obtained before collecting certain types of data, such as PIN Numbers and IP addresses?
  • Should we consider mandating the deletion of data for accounts that have been inactive for over a year, provided the customer is notified and no response is received?
  • Should we consider requiring customers be provided with a list of entities receiving their data?
  • Should we consider changing the structure by which a financial institution is held liable if data it collects or holds is shared with a third-party, and that third-party is breached?
  • Should we consider changes to require or encourage financial institutions, third parties, and other holders of consumer financial data to minimize data collection to only collection that is needed to effectuate a consumer transaction and place limits on the time-period for data retention?

 

 

 

A broad coalition of state, consumer, and bank groups have joined the Conference of State Bank Supervisors (CSBS) in asking Congress to strike a provision in the recently passed stablecoin legislation that risks harming consumers, creates an unlevel playing field for certain uninsured banks, and significantly erodes state authority to supervise these institutions.

Courtesy of the Conference of State Bank Supervisors (CSBS)

Section 16(d) of the GENIUS Act grants an uninsured state-chartered bank with a payment stablecoin subsidiary broad authority to engage in nationwide money transmission and custody activities “through” that subsidiary, bypassing host state licensing and oversight.

“This unprecedented preemption of state law and supervision weakens vital consumer protections, creates opportunities for regulatory arbitrage, and undermines state sovereignty,” says the letter, signed by CSBS, the American Bankers Association, Americans for Financial Reform, Independent Community Bankers of America, Money Transmitter Regulators Association, National Conference of State Legislatures, and the National Consumer Law Center.

The letter asks Congress to strike the GENIUS Act provision in market structure legislation now under consideration in the Senate and to reject any proposals that would extend preemption to the activities of other uninsured banks.