|
Washington Policy Update
Allison Karakis, Senior Director, Government Relations
Government shutdowns are unpopular among voters and negatively impact federal employees. "Essential" workers must continue working without pay until the government reopens, while other workers will be furloughed but are guaranteed to receive retroactive pay following enactment of the Employee Fair Treatment Act of 2019. Congressional staff, depending on the office, are categorized into these two groups and those working are additionally required to handle frequent calls from constituents, many frustrated by the shutdown. The longest federal shutdown, lasting 35 days, occurred during Trump's first term. The current shutdown's duration is uncertain, with negotiations stalled and both parties blaming each other for the deadlock.
Government funding disagreements are common, with Congress often finding it challenging to pass all 12 appropriations bills on time – the last successful attempt being in 1997. To keep the government open while discussions continue, Congress frequently relies on a Continuing Resolution (CR). In some cases, such as with FY25, CRs funded the entire fiscal year. Last year, Congress and the Administration delayed funding decisions until after the election, hoping for better negotiating positions. The elections, however, resulted in narrow majorities, thus making negotiations difficult.
Congress must address other key issues before year-end, including the National Defense Authorization Act, which has passed annually for decades. While the bill is an essential authorization for defense, it has also become a vehicle to pass a variety of unrelated provisions.
In addition, Republicans will want to tee up less popular legislation before the start of the midterm election year. This allows them to move priorities important to their base voters and then pivot toward more moderate policies that help win swing districts.
Treasury Seeks Public Comment on GENIUS Act
The U.S. Department of Treasury issued an advanced notice of proposed rulemaking (ANPRM) to begin the process of implementing the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act) that recently became law and establishes a regulatory framework for payment stablecoins (digital assets which an issuer must redeem for a fixed value).
The GENIUS Act tasks Treasury (and various other federal agencies) with issuing regulations that encourage innovation in payment stablecoins, while also providing an appropriately tailored regime to protect consumers, mitigate potential illicit finance risks, and address financial stability risks. Treasury is seeking public comment on potential regulations that may be promulgated, including regarding regulatory clarity; prohibitions on certain issuances and marketing; Bank Secrecy Act (BSA) Anti-Money Laundering (AML) and sanctions obligations; the balance of state-level oversight with federal oversight; comparable foreign regulatory and supervisory regimes; and tax issues, among other things.
Comments must be received by October 20, 2025.
OCC Announces Updates to Structure
The Office of the Comptroller of the Currency (OCC) announced a new organizational framework for bank supervision and updates to the structure of its Office of the Chief National Bank Examiner. This reversed an April announcement that consolidated bank supervision into one office.
Effective October 1, three distinct lines of business will replace the Bank Supervision and Examination group: Large and Global Financial Institutions, Regional and Midsize Financial Institutions, and Community Banks. Each unit will be led by a Senior Deputy Comptroller who will report to the Comptroller of the Currency.
The OCC’s current Senior Deputy Comptroller for Bank Supervision and Examination will serve as the Senior Deputy Comptroller for Large and Global Financial Institutions. This group will include financial institutions with assets of over $500 billion and those institutions that have a foreign parent. The Regional and Midsize Financial Institutions group will supervise institutions between $30 billion and $500 billion in asset size and the Community Bank group will supervise institutions with up to $30 billion in assets. Acting Senior Deputy Comptrollers for these new lines of business will be selected in early October.
“This realignment is consistent with our historic risk-based supervision approach and my commitment to tailor supervision to bank risk profile,” said Comptroller of the Currency Jonathan V. Gould. “Over time, I expect these three bank supervision groups to generally align with our tailored regulatory framework. This new structure benefits the institutions we supervise and improves the management of examiner resources and supports examiner development and professional growth.”
Homebuyers Privacy Protection Act Becomes Law
President Trump signed the Homebuyers Privacy Protection Act in September. This bill limits the circumstances in which credit reporting agencies may provide consumer credit reports to third parties in connection with residential mortgage transactions. Widely known as “trigger leads,” consumer groups, banks, and credit unions strongly supported some restrictions because homebuyers often complained of numerous solicitations following a mortgage application.
Specifically, the bill prohibits a credit reporting agency from providing a consumer's credit report to a third party in connection with a residential mortgage transaction, unless the transaction consists of a firm offer of credit or insurance, and (1) the third party provides documentation certifying that it has the consumer's consent; or (2) the third party has originated a mortgage on behalf of the consumer, is a current mortgage loan servicer to the consumer, or has a current specified banking relationship with the consumer.
| 
