Crypto regulations could affect Main Street lending

ICBA warned the Securities and Exchange Commission that its proposed rule on crypto assets could increase demand for payment stablecoins, which would reduce community bank deposits and harm local lending.

In a letter to the SEC, ICBA urged the commission to:

• Demonstrate that each crypto-specific exemption or accommodation is justified by identifiable differences in function or risk rather than by the sole use of blockchain technology.
• Publish a supplemental economic analysis—developed in consultation with the federal banking agencies—of the proposal’s reasonably foreseeable effects on deposit distribution, bank funding costs, competition, market concentration, and local credit availability.
• Adopt reporting, monitoring, reviewing, and other safeguards sufficient to identify and address those effects before finalizing the proposal.

The SEC in August proposed rules that would create a framework for certain investment contracts involving crypto assets. SEC Chair Paul Atkins said crypto asset legislation is needed to “future-proof” rules of the road for crypto assets.

• The SEC last month proposed rules and amendments to provide a framework for the custody of crypto assets for registered investment advisers and regulated funds.
• Following the failed Clarity Act vote in September, Atkins said the SEC would act on crypto issues with or without legislation.
• The SEC in September proposed an “Innovation Exemption” that exempts tokenized securities venues from the definition of “exchange” under the Exchange Act to facilitate on-chain trading of certain tokenized stocks.

Source: ICBA

$8B in relief to farmers

The USDA announced that it will make $8 billion available for one-time payments to U.S. farmers this harvest season to provide relief during temporary market disruptions and increased input costs.

The USDA said:

• Similar to the Farmer Bridge Assistance program, the Harvest Fuel Relief program will provide simple, proportional support to producers using a uniform formula to cover a portion of modeled losses during the 2026 crop year.
• The $8 billion in payments provided through the Harvest Fuel Relief program are authorized under the Commodity Credit Corporation Charter Act and will be administered by the Farm Service Agency.

Source: USDA

Affect of AI on deposit movement

FDIC Chair Travis Hill said regulators and banks are assessing how AI agents that move money for customers could reshape deposit markets, while the agency considers new supervisory guidance and expanded internal uses of AI, Banking Dive reported, citing Hill's remarks at an Oct. 20 event in Las Vegas. Hill said a key question is how much control customers will delegate to AI tools that can compare accounts, shift deposits and conduct transactions, the report said.



Source: S&P Global

FS-ISAC shares info on impersonation schemes

The latest FS-ISAC Weekly Intelligence Briefing warns of social engineering activity targeting technology help desks.

FS-ISAC reported:

• Threat actors have impersonated entities with known ties to targeted organizations to increase their credibility with help desk personnel and initiate password reset processes.
• Financial institutions should continue to monitor trends in identity-based intrusion attempts and train help desk personnel to identify similar fraudulent impersonation schemes. 

In addition, former regulators argued in a new report that banks using AI chatbots for customer service may be breaking consumer-protection laws if the technology makes decisions impacting a customer's finances or blocks consumers from getting help. The report identifies false information, obstruction of access to live human beings, and inadequate service as three areas where chatbot misconduct could trigger state bans for unfair and deceptive practices

Source: FS-ISAC

News from

ACC Capital


Plan to Expand Entrepreneurship Education Across Arkansas

ACC Capital Foundation, the non-profit affiliate of ACB Preferred Solutions Provider ACC Capital, has announced a new five-year strategic plan designed to expand its role in Arkansas’s entrepreneurship ecosystem, moving from an event-driven initiative under the umbrella of ACC Capital to a programmatically driven nonprofit with year-round activities reaching students, educators and entrepreneurs across the state.



The $6.2 million plan represents an investment of about $1.24 million annually over five years, with most funding directed toward programming as the Foundation expands its statewide reach and increases its presence in communities throughout Arkansas.

Click here to learn more.

Source: ACC Capital

Help community bankers access AI resources

ICBA and OpenAI announced a strategic alliance to help community banks access artificial intelligence-enabled cybersecurity capabilities, training, and peer-to-peer engagement.

Through the alliance, eligible ICBA member banks will have a pathway to:

• Explore OpenAI's Daybreak for Frontline Defenders to support defensive cybersecurity work.
• Access ICBA member-exclusive education and training with OpenAI experts.
• Participate in ICBA's new AI Show-n-Tell forum for demonstrate real-world AI use cases, challenges, and lessons learned.
• 
  

Join the new AI Adoption group on ICBA Community, ICBA’s peer-to-peer network of more than 8,500 community bankers.

In a message to community bankers, ICBA President and CEO Rebeca Romero Rainey said the alliance builds on ICBA’s advocacy to ensure community banks are recognized as a critical infrastructure component and have access to advanced AI capabilities.

Source: ICBA; OpenAI

Stablecoin rule renews banking industry's deposit-flight concerns

The OCC's final rule implementing the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act leaves the door open for stablecoin customers to receive yield or rewards.

The OCC's original proposal included a provision stating that offering yield through a third party, affiliate or other intermediary would violate the GENIUS Act's ban on stablecoin yield payments. But the agency's final rule, released Oct. 21, removed that presumption. Instead, it said it will evaluate third-party yield arrangements on a case-by-case basis.

The change is a "setback" for the bank industry, according to Raymond James Washington policy analyst Ed Mills.

"We are not particularly surprised by the walkback given the administration's broader pro-crypto regulatory stance, but it represents a meaningful departure from the OCC's February proposal and from the banking industry's expectation that regulators might close the rewards loophole following the collapse of CLARITY Act negotiations in September," Mills wrote in a note.

The analyst called the change "incrementally favorable" for cryptocurrency exchanges, stablecoin issuers and digital asset platforms.

"We believe this leaves the [banking] industry's most important policy dispute unresolved while potentially strengthening the negotiating position of crypto firms in any renewed market structure discussions," Mills wrote.

The OCC is the first federal bank regulator to finalize its GENIUS Act rule. "We will be watching whether other regulators ultimately follow the OCC's case-by-case approach to third-party rewards or retain more prescriptive restrictions in their own rulemaking," Mills wrote.

Source: S&P Global

Move to ease housing burden

A new executive order was issued as an effort to lower the costs of single-family homeownership and mortgages.

The executive order:

• Directs the Federal Housing Finance Agency to create a pilot program to cancel borrowers’ mortgage insurance premiums proactively once they have satisfied their equity requirements based on the current market value.
• Establishes a Task Force on Manufactured Housing Innovation to increase the quality of and lower the cost of building a home.
• Directs the FHFA to reduce homeowners’ refinancing costs by expanding the title insurance waiver pilot into a permanent program.
• Directs the Agriculture and Veterans Affairs departments to reduce interest rates on single-family home loans.

The Treasury Department separately proposed regulations to implement Section 1001 of the 21st Century ROAD to Housing Act, which restricts large institutional investors from purchasing single-family homes.

Source: US Treasury Department

Stablecoin used to bypass sanctions

A report prepared by the Senate Permanent Subcommittee on Investigations alleges that Iran and organizations linked to the regime have increasingly used Tether's USDT stablecoin to bypass US sanctions and move funds to regional proxy groups, The Wall Street Journal reported, citing a copy of the report viewed by the news outlet.

Source: CSBS

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