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Update on seniors being targeted by AI scams

The Financial Services Information Sharing and Analysis Center’s (FS-ISAC) latest weekly risk summary says the FBI is reporting a resurgence in a fraud campaign directed at senior citizens’ retirement funds.

FS-ISAC shared tips for seniors and reminded banks that customer-facing employees can be a critical resource in identifying threats against their older customers/members.

The FS-ISAC publication and other resources are available on ICBA's Cyber and Data Security Resource Center. 

 Source: FS-ISAC; ICBA

FDIC removes disparate impact references from exam manual

The FDIC announced that it will evaluate potential discrimination under the Equal Credit Opportunity Act and Fair Housing Act only through evidence of disparate treatment.

The FDIC said several sections of the Consumer Compliance Examination Manual have been updated to remove all references to disparate impact and how to evaluate disparate impact risk.

A bank may violate fair lending laws by creating a disparate impact when a neutral policy or practice results in disproportionate burdens on or illegally excludes a protected class. 

The OCC in July announced that it removed references for disparate impact liability from the “Fair Lending” booklet of the Comptroller’s Handbook, started removing references in other materials, and instructed examiners that they should no longer examine for disparate impact. 

ICBA strongly supports equal access to credit while consistently supporting amending fair lending laws to clarify that disparate impact without a finding of intentional discrimination does not violate fair lending. 

• ICBA in May strongly encouraged HUD Secretary Scott Turner to revisit the 2013 Disparate Impact Rule to ensure fair enforcement of the Fair Housing Act, reduce regulatory burdens on community banks, and promote a merit-based approach to housing policy.
• A 2024 ICBA white paper provides an in-depth look at trends in fair lending and explores concepts such as disparate impact. 

Although the agencies won't be prioritizing disparate impact, it's still a cognizable claim, so banks should retain policies that mitigate disparate impact. 

Source: FDIC: ICBA

FDIC problem bank list shrinks

The Federal Deposit Insurance Corp. reported that the number of institutions on its "problem bank list" fell by a net of four in the second quarter to 59 banks.

Banks on the list have a CAMELS composite rating of 4 or 5. The scale measures a bank's capital adequacy, asset quality, management, earnings, liquidity and sensitivity on a scale of 1 to 5, with 5 being the worst.

The second-quarter total is the lowest since the fourth quarter of 2023, when 52 banks were on the list. It also marks the second straight quarter that the number of banks on the list fell, following nearly two years of increases. The regulator stopped disclosing the asset size of banks on the list beginning in 2025.

The banking sector reported a return on assets of 1.13% for the quarter, and a slight decrease in net income attributed to increased provision expenses related to a large bank acquisition, the FDIC said in an Aug. 26 statement.

Net income was $69.9 billion for the quarter, reflecting a decline of $677.3 million, or 1%, compared to the previous quarter..

Community banks had a 12.5% increase in quarterly net income, driven by higher net interest and noninterest income.

Source: S&P Global Market Intelligence

"Politicized or unlawful banking practices"

The Small Business Administration sent a letter to its network of more than 5,000 lenders asking them to cease what it describes as "politicized or unlawful banking practices," in response to President Trump's executive order aimed at ending debanking.

In accordance with Executive Order 14331, the SBA outlined specific actions that lenders must complete by Dec. 5, including identifying any past or present formal or informal policies that promote or influence politicized or unlawful debanking, and making reasonable efforts to locate and reinstate former clients who were denied services and notify these individuals of their reinstatement.

Source: SBA; S&P Global Market Intelligence

Consumer sentiment drops in August

The University of Michigan’s index of consumer sentiment fell 5.7% in August from the previous month and was down 14.3% from a year ago. Year-ahead inflation expectations rose to 4.8% from 4.5% the previous month.

Source: Universit of Michigan; ICBA

An article from

Forvis/Mazars

GENIUS Act – Ushering in a Transformative Era of Digital Assets

"....To reduce the risks that payment stablecoins pose to the safety and soundness of the financial system, the GENIUS Act provides requirements that issuers of payment stablecoins must meet. Only those payment stablecoins that meet these requirements can be issued for use by U.S. persons."

In this article from Forvis/Mazars, an ACB Associate Member, authors Bobby Bean, Justin Brown, Spencer Schulten, and Shaun Harms explain the: requirements for banks and non-banks to issue stablecoin; risks posed to bank - nonbank - and financial market participants; and how to navigate this new landscape with confidence.

Click here to learn more.

Source: Forvis/Mazars

Fed governor contests removal

President Donald Trump ordered the removal of Federal Reserve Governor Lisa Cook after a Trump appointee alleged that she committed mortgage fraud, prompting Cook to file a lawsuit contesting her dismissal as illegal.

In an Aug. 25 letter posted on social media, Trump said Cook was being removed from the Fed Board, effective immediately, after Federal Housing Finance Agency Director Bill Pulte alleged that she misrepresented multiple properties as her primary residence when securing mortgages.

On Aug. 28, Pulte submitted a new criminal referral against Cook to US Attorney General Pam Bondi, Bloomberg News  reported. Cook filed a lawsuit to contest her dismissal, arguing that Trump's actions were illegal and violated her due process rights and her entitlement to a notice and hearing as stipulated by the Federal Reserve Act, Barrons.com reported.

Cook's complaint called the allegations a facade to facilitate her removal from the Fed Board, allowing President Trump to appoint a successor aligned with his agenda, the report said.

Treasury Secretary Scott Bessent reiterated a request for Fed Chair Jerome Powell to conduct an internal review of the central bank, Bloomberg News reported.

Meanwhile, the Trump administration is exploring ways to increase its influence over the Federal Reserve's 12 regional banks, potentially extending its authority beyond personnel appointments in Washington, Bloomberg News reported, citing sources familiar with the matter.

A successful removal of Cook could allow Trump to secure a majority on the Fed's seven-member Board of Governors. However, the Federal Open Market Committee, responsible for setting interest rates, also includes five regional bank presidents who are not appointed by the White House or confirmed by the Senate, the report noted.

Source: Bloomberg News; Barrons.com; S&P Global Market Intelligence

Commercial & industrial loan delinquencies decline

Banks reported a sequential decline in delinquent commercial and industrial (C&I) loans in the second quarter, along with a reduced concentration of these loans.

The total value of delinquent C&I loans stood at about $30 billion in the three months ended June 30, down 3.3% from the previous quarter, but up 7.8% from the year-ago period, according to S&P Global Market Intelligence data.

Delinquent C&I loans as a percentage of total C&I loans fell 4 basis points sequentially to 1.28% in the second quarter, which was still 15 basis points higher than in the second quarter of 2024.



Meanwhile, all delinquencies as a percentage of total loans also fell quarter over quarter to 1.50% from 1.59%.

Source: S&P Global Market Intelligence

GLBA is a solid framework but needs updating

ICBA urged Congress to reduce duplicative Gramm-Leach-Bliley Act requirements for community banks while modernizing the law to ensure nonbank entities are subject to equivalent consumer data privacy standards.

In a letter to House Financial Services Committee Chairman French Hill (R-Ark.) and Financial Institutions Subcommittee Chairman Andy Barr (R-Ky.) in response to a request for information on federal consumer financial data privacy laws, ICBA said:

• Targeted amendments to GLBA are the most appropriate course of action, rather than pursuing a broader or wholesale replacement of the law.
• It supports adoption of a preemptive federal GLBA standard to establish a strong and consistent baseline applicable to all entities handling consumer financial data, eliminating the unnecessary compliance fragmentation and resolving the uncertainty created by state privacy laws that rely solely on data-level exemptions.
• GLBA should serve as the exclusive standard for financial institutions and should apply at the entity level while being harmonized with general federal privacy legislation to promote consistency across industries.
• Nonbank obligations under GLBA should be equivalent to bank obligations.
• Amendments must update and clarify definitions to address modern data practices, such as the growing role of data aggregators and third-party technology providers.

• ICBA and other groups told the House Energy and Commerce Committee that any proposed federal data privacy framework should ensure financial institutions already subject to GLBA are not subject to inconsistent or duplicative requirements. ICBA and the other groups previously told the working group that a national privacy standard should preempt the patchwork of state laws and recognize the strong privacy and data security standards already in place for the banking sector.  
• Source: ICBA

Guide to help community banks work with influencers

ICBA released the Guide to Local Influencer Marketing for Community Banks, which provides community bankers with step-by-step guidance and tools to successfully reach and attract the next generation of customers through trusted local voices.

The guidebook, which is free and available for download for ICBA community banks:

• Says influencer marketing isn’t just for big brands and can help community banks to build trust, reach younger customers, and strengthen local presence.
• Includes pilot data, tips, and templates for getting started.

Source: ICBA