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Nutter Bank Report: June 2026
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- FDIC Proposes Reducing Assessment Rates and Expanding the Small Institution Threshold
- OCC Clarifies Decision Process for Bank Charter Applications and Other Agency Filing
- FDIC Proposes to Relax Restrictions on Sharing Confidential Supervisory Information
- Federal Banking Agencies Propose Know-Your-Customer Rules for Stablecoin Issuers
- Other Developments: Data Standards and Reputation Risk
1. FDIC Proposes Reducing Assessment Rates and Expanding the Small Institution Threshold
The FDIC has approved a proposed rule that would make significant changes to the deposit insurance assessment framework, including an expansion of the definition of a small institution and a decrease of base assessment rates. The proposed rule, released on June 25, would increase the asset threshold in the definitions of small and large institutions for deposit insurance assessments from $10 billion to $30 billion and adjust the threshold every four years to reflect inflation. The proposed rule also would decrease the initial base deposit insurance assessment rate schedules by two basis points for all small institutions, including for new small institutions. For large and highly complex institutions, the proposed rule would decrease the initial base deposit insurance assessment rate schedules by one basis point and include a downward resolution readiness adjustment to assessment rates, including 0.5 basis points for passing voluntary virtual data room testing and 0.5 basis points for providing prescribed temporary data access. Comments on the proposed rule will be due within 60 days after it is published in the Federal Register, which is expected shortly. Click for a copy of the proposed rule.
Nutter Notes: In its release accompanying the proposed rule, the FDIC noted that the current definitions of small and large institutions use certain static, dollar-based thresholds, which have not been updated in twenty years. Under the proposal, the dollar-based asset threshold used to define small and large institutions would be updated and adjusted in the future to reflect inflation, pursuant to a pre-determined indexing methodology based on the consumer price index for urban wage earners and clerical workers (CPI–W). Under the proposed rule, a small institution would be reclassified as a large institution only if it reports total assets of $30 billion (or the applicable threshold adjusted for inflation in the future) or more for four consecutive quarters. The FDIC estimates that among the 76 banks that would shift from the large bank assessment methodology to the small bank assessment methodology as a result of the proposal, nearly all would pay less in assessments. To mitigate possible effects on some banks that might pay a higher assessment as a result of being reclassified as a small institution, the proposed rule provides for a one-time election for reclassified institutions to be temporarily priced using the large bank assessment methodology to allow for a transition.
2. OCC Clarifies Decision Process for Bank Charter Applications and Other Agency Filings
The OCC has published new guidance that clarifies its filing decision process as governed by its regulations at 12 C.F.R. part 5. The guidance contained in OCC Bulletin 2026-27, issued on June 17, explains that the OCC may either approve, conditionally approve, or deny a filing, or alternatively may return a filing for being materially deficient if it lacks sufficient information for the OCC to make a determination under applicable laws and regulations. The OCC’s guidance reminds applicants that agency filings must be complete and must include all required biographical and financial information of individuals and corporate background and financial reporting for business entities. With respect to de novo bank charter applications, the OCC specifically noted that filings must identify all products and services that the new national bank intends to offer, as well as how those products and services will be operationalized, including but not limited to the applicable governance, risk management, and compliance frameworks for each product and service with sufficient granularity. The OCC clarified that it approves filings when an application meets all statutory, regulatory, and policy criteria, with the option to conditionally approve a filing to address safety and soundness concerns for an initial period. The OCC noted that if a filing presents significant safety and soundness or consumer compliance concerns, or otherwise does not meet statutory, regulatory, or policy criteria, the OCC will deny such a filing and then make that denial public “to provide the industry and all applicable stakeholders awareness of how the OCC has applied the decision criteria in that proposal.” Click to access the new guidance on agency filings.
Nutter Notes:
Over the last 12 months, the OCC has approved or conditionally approved multiple applications for national bank charters and national trust bank charters, including five national trust bank charter conditional approvals on December 12, 2025, alone. The OCC has also seen a surge in pending applications by entities planning to offer digital assets products and services either by establishing a de novo national bank or national trust bank charter, or by converting to such charters. As of June 30, there are currently 14 pending charters by digital assets entities (a complete list is available on the OCC’s website here).The OCC’s guidance is a public reminder that despite the recent surge in both bank charter applications and approvals, prospective financial institutions and fintechs that are considering a national bank charter must still meet all statutory and regulatory obligations, and it is advisable that they file detailed and complete applications to meet those obligations, which often is achieved by working with advisors experienced in the application process.
3. FDIC Proposes to Relax Restrictions on Sharing Confidential Supervisory Information
The FDIC has issued a proposed rule that would amend its regulations governing the disclosure of confidential supervisory information (CSI) that would provide additional flexibility for banks to share CSI for appropriate business purposes without first obtaining FDIC approval. Under the proposed rule published on June 25, banks would be authorized to disclose CSI to their affiliates, attorneys, auditors, accountants, and other service providers, without the need to seek approval from the FDIC, subject to certain conditions. Bank service providers that are subject to FDIC examination also would be authorized to share CSI with their partner banks without obtaining prior FDIC approval. The proposed rule also would permit banks to disclose, subject to certain conditions, CSI in connection with prospective mergers, subject to limitations, or the hiring of a senior executive officer for whom an offer of employment has been made. Comments on the proposed rule will be due within 60 days after it is published in the Federal Register, which is expected shortly. Click for a copy of the proposed rule.
Nutter Notes: Under the FDIC’s current regulations, banks must obtain the prior approval of the FDIC before disclosing confidential FDIC information to third parties, including their attorneys, accountants, auditors, and other partners. In a statement supporting the proposed rule, FDIC Chairman Travis Hill notes that the process of obtaining FDIC approval “can be time consuming and burdensome both for the institution making the request and the FDIC, while the ability to share information with certain parties in a timely manner can often be critical to informing important business decisions.” The proposed rule generally would require a bank to enter into a qualifying confidentiality agreement with the intended recipient of the CSI before the bank may disclose it to a permitted third party. A qualifying confidentiality must prohibit the use of the CSI by the recipient for purposes other than that for which it was provided and must require that the recipient will not further disclose or make public in any manner the CSI, among other required terms. In the context of a potential merger or other transaction with a counterparty, the proposed rule also would require that the intended recipient must need to know the CSI for the purposes of performing reasonable due diligence or other duties related to the transaction.
4. Federal Banking Agencies Propose Know-Your-Customer Rules for Stablecoin Issuers
The federal banking agencies continue to make progress implementing their directives under to the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act. On June 18, the federal banking agencies along with the NCUA and FinCEN released a jointly proposed rule that would treat permitted payment stablecoin issuers (PPSIs) as financial institutions under the Bank Secrecy Act and require PPSIs to maintain an effective customer identification program (CIP). Consistent with CIP requirements applicable to other types of financial institutions, the proposed rule would establish the minimum standards for a PPSI’s CIP, including developing a written program tailored to the PPSI’s size and business, risk-based procedures for verifying the identity of each customer, and procedures to address when a potential or existing customer’s identity cannot be verified. Because FDIC-supervised PPSIs will be subsidiaries of parent banks already subject to federal CIP requirements, a PPSI and its parent bank would generally be permitted to coordinate compliance practices and share compliance resources. The proposed rule also would permit a PPSI to develop procedures specifying when the PPSI may rely on another federally regulated financial institution’s performance of the CIP procedures for the PPSI’s customer. Comments on the proposed rule are due by August 21, 2026. Click for a copy of the proposed rule.
Nutter Notes: Separately, the OCC issued a proposal on June 11 for new stablecoin information collection requirements that would include weekly and quarterly reporting forms that must be completed by PPSIs and foreign payment stablecoin issuers registered with the OCC. The reporting forms would help satisfy requirements under a March 2, 2026, rule proposed by the OCC that would implement requirements of the GENIUS Act with respect to the issuance of payment stablecoins and certain related activities by PPSIs subject to the OCC’s jurisdiction. According to the OCC, the reporting forms would help ensure compliance with the March 2 proposed rule, facilitate OCC supervision of PPSIs and foreign payment stablecoin issuers, and promote transparency with respect to the financial condition of PPSIs and foreign payment stablecoin issuers. Comments on the OCC’s proposed reporting forms are due by August 11, 2026. Click for access to the proposed reporting forms.
5. Other Developments: Data Standards and Reputation Risk
- Federal Financial Institution Regulators Adopt Final Data Standards
The federal banking agencies, in conjunction with the CFPB, SEC, FHFA, NCUA and CFTC, issued a joint final rule on June 10 implementing certain data standards under the Financial Data Transparency Act of 2022 (FDTA). The final rule is designed to promote interoperability of financial regulatory data across the federal agencies by establishing data standards for identifiers of legal entities and other data elements. The final rule establishes data standards for the collections of information reported to each agency, as required by the FDTA. The final rule becomes effective on October 1, 2026. Click for a copy of the final rule.
Nutter Notes: The data standards established under the final rule will later be considered by the agencies for potential incorporation (to the extent feasible) into data standards to be adopted for certain collections of information in separate rulemakings by each agency.
- Federal Banking Agencies Remove Additional References to Reputation Risk
On June 2, the federal banking agencies jointly updated certain interagency documents to remove references to reputation risk. According to the agencies, the updates were made to complement their earlier actions that ended the use of reputation risk in the supervision of banking organizations. Click for more information about the updates.
Nutter Notes: In a joint statement, the agencies reiterated that reputation risk can be misused by supervisors as a basis to encourage or pressure a bank to restrict individuals’ and legal businesses’ access to financial services due to their constitutionally protected political or religious beliefs, speech, or conduct or lawful business activities. The agencies stated that the updates are intended to help ensure that supervisory decisions are based on material financial risks, and to increase clarity and facilitate greater precision in supervisory decision making.
Nutter Bank Report
Nutter Bank Report is a monthly electronic publication of the Banking and Financial Services Group of the law firm of Nutter McClennen & Fish LLP. Chambers and Partners, the international law firm rating service, after interviewing our clients and our peers in the profession, has ranked Nutter’s Banking and Financial Services practice among the top banking practices in the nation. Visit the U.S. rankings at Chambers.com. The Nutter Bank Report is edited by Matthew D. Hanaghan. Assistance in the preparation of this issue was provided by Daniel W. Hartman and Megan S. Greco. The information in this publication is not legal advice. For further information, contact:
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Matthew D. Hanaghan Tel: (617) 439-2583 |
Daniel W. Hartman |
Michael K. Krebs Tel: (617) 439-2288 |
Kate Henry |
This update is for information purposes only and should not be construed as legal advice on any specific facts or circumstances. Under the rules of the Supreme Judicial Court of Massachusetts, this material may be considered as advertising.
