Lending compliance
Flood loans reminder during NFIP lapse
On Oct. 1, 2025, various agencies issued a joint release to remind financial institutions that they may continue making loans subject to federal flood insurance requirements even when the National Flood Insurance Program (NFIP) is unavailable, such as during a lapse. Institutions must still determine flood zone status, provide accurate borrower notices, and comply with all flood insurance regulations. The agencies emphasized prudent risk management for safety, soundness, and compliance, and noted that private flood insurance remains a viable alternative during NFIP lapses.
OCC Fair Housing Act poster updated
On Oct. 15, 2025, the Office of the Comptroller of the Currency (OCC) updated the Equal Housing Lender poster template in accordance with Executive Order 14224, “Designating English as the Official Language of the United States.” Banks are required to post and maintain fair housing posters at all of their places of business that participate in activities subject to the Fair Housing Act.
FFIEC publishes 2024 lending data to boost small business and community development oversight
The Federal Deposit Insurance Corporation (FDIC), Federal Reserve Board (FRB), and OCC, as members of the Federal Financial Institutions Examination Council (FFIEC), released 2024 data on small business, small farm, and community development lending on Nov. 13, 2025. The Community Reinvestment Act requires the agencies to disclose this data annually. This also includes detailed aggregate reports for every U.S. county and metropolitan statistical area, highlighting lending trends and supporting transparency in access to credit for underserved markets.
Fed and CFPB set 2026 dollar thresholds for consumer credit and lease protections
The FRB and Consumer Financial Protection Bureau (CFPB) announced updated Regulation Z (truth in lending) and Regulation M (consumer leasing) thresholds for 2026 on Dec. 15, 2025. Based on a 2.1% CPI-W increase, these rules apply to consumer credit transactions and leases of $73,400 or less. Transactions at or below this amount remain subject to key consumer protections, while private education loans and real estate-secured loans, such as mortgages, are covered regardless of size. The annual adjustment ensures compliance standards to keep pace with inflation and maintain transparency for borrowers.
2026 appraisal threshold for higher-priced mortgage loans updated
The CFPB, FRB, and OCC announced on Dec. 15, 2025, that the threshold for higher-priced mortgage loans (HPMLs) subject to special appraisal requirements will increase from $33,500 to $34,200, effective Jan. 1, 2026. This adjustment, based on a 2.1% CPI-W increase, requires certain HPMLs to obtain a written appraisal with an interior property inspection under the Truth in Lending Act provisions added by the Dodd-Frank Act. Loans at or below the threshold remain exempt, ensuring compliance standards reflect inflation while maintaining consumer protections for higher-risk mortgage transactions.
Other compliance
OCC details actions aimed at enhancing flexibility for community banks
On Oct. 6, 2025, the OCC provided additional guidance to banks as well as two notices of proposed rulemakings to reduce regulatory burden for community banks.
- The agency announced that it’s eliminating fixed examination requirements for community banks through a new bulletin and will instead tailor both the scope and frequency of examinations to align with a risk-based supervisory approach.
- The agency noted that it’s providing updated guidance to help community banks align their model risk management efforts with the scale and nature of their operations, ensuring those practices reflect each institution’s specific risks, activities, and reliance on models.
- The agency introduced a proposal to eliminate the regulation known as 12 CFR 27, which governs the Fair Housing Home Loan Data System. As part of its broader effort to align supervisory expectations with the actual risk profiles of institutions, the OCC concluded that removing this rule would lift an unnecessary reporting burden from national banks. At the same time, the agency determined that doing so wouldn’t compromise the data it relies on to support its fair housing oversight activities.
- The agency also issued a proposed rulemaking to expand which community banks qualify for expedited or simplified licensing processes, aiming to reduce administrative burden and better align requirements with each institution’s size and risk profile. The OCC indicated that this change is intended to provide greater flexibility and encourage more corporate activity across the community banking sector.
New supervisory principles target material risk in bank oversight
On Nov. 18, 2025, the Federal Reserve released a set of enhanced supervisory operating principles aimed at refining bank examinations by concentrating on material financial risks to safety and soundness. Vice Chair for Supervision Michelle Bowman emphasized the approach is not about narrowing oversight, but “sharpening” it, ensuring that examiners prioritize key threats while reducing redundant exam overlap. The principles also streamline issue remediation and increase training for examiners, with plans to codify the approach in future guidance or regulations. This shift underscores a strategic move toward more effective and focused bank supervision.
NCUA launches deregulation initiative with first round of proposed rule changes
On Dec. 10, 2025, the National Credit Union Administration (NCUA) announced a major deregulation project aimed at streamlining credit union oversight and reducing regulatory burden. The Deregulation Project follows Executive Order 14192, “Unleashing Prosperity Through Deregulation.” The first round of proposed changes focuses on eliminating outdated requirements, simplifying compliance processes, and modernizing rules to better align with today’s financial environment. This initiative reflects NCUA’s commitment to fostering operational flexibility while maintaining safety and soundness standards. Credit unions are encouraged to review the proposals and provide feedback during the comment period to help shape a more efficient regulatory framework. Comments must be received before Feb. 9, 2026, for all four proposals.
NCUA advances deregulation efforts with successive waves of proposed rule changes
On Dec. 23, 2025, the NCUA announced a second round of proposed changes associated with its deregulation project. The NCUA is requesting comments on four additional proposals aimed at streamlining oversight and reducing regulatory burdens for credit unions. Comments must be received before Feb. 9, 2026, for all four proposals.
FDIC advances rulemaking to establish GENIUS Act procedures
On Dec. 16, 2025, the FDIC Board approved a notice of proposed rulemaking under the GENIUS Act to establish application procedures for FDIC‑supervised banks and savings associations that wish to issue payment stablecoins through subsidiaries. The rule outlines requirements such as statutory evaluation factors, defined processing timelines, and an appeals process for denied applications. It’ll create a new section in federal regulations, Section 303.252 under 12 CFR 303, detailing filing scope, submission content, and review protocols. Public comments will be accepted for 60 days following its Federal Register publication. This initiative marks the FDIC’s first formal regulatory step under the GENIUS Act to support the safe deployment of bank‑issued stablecoins.
Financial crimes
FinCEN’s new SAR FAQs refocus AML efforts
FinCEN issued new FAQs on Oct. 9, 2025, to clarify Suspicious Activity Report (SAR) requirements under the Bank Secrecy Act. The guidance aims to reduce unnecessary filings and help institutions focus resources on higher-risk activities. Key clarifications include when SARs are required for structuring-related transactions, how to handle continuing activity reviews, and documentation standards when deciding not to file. While these FAQs don’t change existing legal obligations, they provide practical direction to improve SAR quality and enhance the effectiveness of AML programs.
FATF flags new high-risk jurisdictions: FinCEN urges U.S. banks to amp up AML vigilance
On Nov. 21, 2025, the Financial Action Task Force (FATF) updated its watchlists, adding the British Virgin Islands and Bolivia to its “Jurisdictions Under Increased Monitoring” and maintaining Iran, North Korea, and Burma on its “High‑Risk Jurisdictions Subject to a Call for Action.” These updates signal that financial institutions must apply enhanced due diligence or even countermeasures, particularly for correspondent banking relationships, in line with 31 CFR Section 1010.610(a) and other regulatory requirements. FinCEN advises U.S. banks to incorporate these risk assessments into their AML/CFT/CPF frameworks to satisfy compliance obligations and protect the integrity of the financial system.
FinCEN warns banks: Cross-border transfers linked to illegal immigration under scrutiny
FinCEN issued an alert on Nov. 28, 2025, highlighting suspicious patterns in cross-border funds transfers associated with human smuggling and illegal immigration. The advisory urges financial institutions to strengthen transaction monitoring and apply enhanced due diligence for transfers involving high-risk corridors, particularly those linked to smuggling networks. Key red flags include frequent small-dollar transfers to multiple beneficiaries, use of third-party senders, and transactions inconsistent with a customer profile. This alert is consistent with Executive Order 14159, “Protecting the American People Against Invasion.” FinCEN emphasizes timely SAR filings and collaboration with law enforcement to disrupt illicit financial flows fueling human smuggling operations.
Treasury brings banks and law enforcement together to tackle evolving financial crime risks
On Dec. 19, 2025, the U.S. Treasury convened a high-level meeting with financial institutions and law enforcement agencies to strengthen collaboration against emerging illicit finance threats. The discussion focused on improving information sharing, leveraging technology for faster detection, and aligning priorities to combat money laundering, terrorist financing, and cyber-enabled fraud. Treasury officials emphasized the importance of public-private partnerships in safeguarding the financial system and highlighted ongoing efforts to modernize AML frameworks for greater efficiency and impact.
