Technology, Innovation & Digital Assets

On Tuesday, May 19th, President Trump issued two Executive Orders regarding financial services. The first, Integrating Financial Technology Innovation into Regulatory Frameworks, addresses the role of fintechs in the financial system, including supporting bank-fintech partnerships, charters, and access to Federal Reserve payment systems. The second, Restoring Integrity to America’s Financial System, covers banking products and services provided to immigrants and related BSA/AML and ability-to-repay requirements. Neither will result in immediate changes. Rather, the EOs direct the federal...

It seems the OCC does not believe the GENIUS Act creates a new charter type, contrary to speculation late last year. They would, however, be pleased to offer applicants charters they already have. In the preamble to its proposed GENIUS Act rule, the OCC adopts a narrower reading than it could have of the savings clause that follows the Act's list of activities permitted to a stablecoin issuer. The savings clause says that nothing in the activities provision "shall limit a permitted payment stablecoin issuer from engaging in payment stablecoin activities or digital asset service provider...

I know I can get enthusiastic about the promise of AI for policy work. But even I was surprised by the level of energy and curiosity at our AI Tools for Public Policy panel during last week’s Business-Government Relations Council (B-GRC) meeting in Charlottesville. Under the skillful moderation of Michele Lieber, our conversation began with an engaging exchange among the panelists, which included 🗽 Pat Utz of Abstract, Benjamin Turner of 9th Street Strategies and LegAide AI, and me. But the real spark came from the audience. The GR professionals in the room represented a wide range of...

How long will a GENIUS Act application really take? If you just look at the law's timelines and make some reasonable assumptions, you can be forgiven for estimating "somewhere between 120-180 days." If you've been in the bank reg world for a while, you know the real answer is "you will never know ahead of time." Why? Meet "substantially complete." The GENIUS Act requires primary federal regulators to "render a decision on the application" within 120 days of receiving a "substantially complete application," or the application is deemed approved. This four-month timeline may appear short...

Bank customers won’t switch to stablecoins. They’ll switch to software that uses stablecoins. That’s one reason stablecoins’ impact on bank deposits is so hard to predict. The main drivers aren’t going to be customer preferences for one form of money over another. They’ll be the contingent factors that shape developer adoption -- more like the dynamics that drive which software platforms or frameworks take off. Some big unknowns: ❓What will be the “killer apps” for blockchain-based payments? ❓Which financial infrastructure stacks will early builders pick when making architectural decisions?...

Combining ILC and GENIUS Act applications is an intriguing possibility for a fintech looking to break out of the sponsor-bank paradigm. In this scenario, the company applies for a new ILC charter whose business plan includes a subsidiary issuer. The federal approver and regulator for both applications would be the FDIC. The approach has pluses and minuses. On one hand, the ILC and its subsidiary would enjoy: ✅ Nationwide deposit-taking and lending powers with the ability to export home state interest rates; ✅ Full credit and debit card issuance and acquiring capabilities; ✅ Eligibility for...

The GENIUS Act purports to create three major types of stablecoin issuer. But by my count, there are at least 14 different forms that a permitted payment stablecoin issuer can take. The 14 forms differ from each other across 12 key dimensions. Some of these dimensions arise from the GENIUS Act itself. Others come from laws triggered by other characteristics of the issuer or its owner. Of these 14 forms, only ten "basic forms" are available as initial pathways to stablecoin issuance. The remaining four "evolved forms" are created when a smaller state qualified issuer crosses the $10b issuance...

No one knows exactly when the federal application window for GENIUS Act stablecoin issuers will officially open. But it's hard to see it happening much earlier than the statutory deadline in mid-July 2026. The Act mandates that the four primary federal payment stablecoin regulators issue regulations to carry out the licensing provisions and start accepting applications "before" July 18, 2026. It doesn't say how long before the deadline applications must be accepted, but the timeline is likely to be tight. One reason is the interagency process. Under the Act, federal regulators must...

Crowdsourcing + AI is a viable strategy for rulemaking in an era of smaller agency staffs. This seems to be emerging thinking in the Administration. The first sign was the deregulation suggestion form used with the spring's omnibus Deregulation RFI. The latest is last week's advance notice of proposed rulemaking (ANPRM) in the personal financial data (1033) reconsideration. In the 1033 litigation, the CFPB promised the court an "expedited" reconsideration rulemaking. But how is using an ANPRM consistent with an expedited rulemaking? The optional ANPRM phase is usually skipped even in...

Under the GENIUS Act, is a Puerto Rico-based stablecoin issuer a U.S. issuer or a foreign issuer? It seems like it could be either -- or even both. Reading the GENIUS Act as a banking lawyer, one thing leaps out: this is a banking law. The Act borrows heavily from existing banking statutes. In the process, it imports many features that make bank reg fun for me, but bewildering to outsiders. Among the many examples is the treatment of Puerto Rico-based issuers. In this respect, the GENIUS Act mirrors a peculiarity of U.S. law as it applies to banks: ➡️ Under the Federal Deposit Insurance Act...

A common misconception is that the GENIUS Act allows only sub-$10b issuers to be state-qualified and imposes federal regulation on all larger issuers. Neither is true. For a state issuer that reaches the threshold, the default path is transition to hybrid supervision, under the federal framework, by both a state and a federal regulator. The state issuer doesn't have to convert to a federal charter unless it wants to. The hybrid framework has some odd quirks: Nonbank issuers transition to supervision administered by the state and OCC "acting in coordination." Meanwhile, (uninsured) depository...

As fintechs work on GENIUS Act stablecoin strategies, one thing is becoming clear: The Act offers the equivalent of a national money transmission license for many previously non-crypto use cases. It could come to displace the traditional state money transmission licenses for many fintechs. This realization has partly sunk in with the trade associations and advocacy organizations that wrote Congress last week requesting repeal of the GENIUS Act's Section 16(d), which grants nationwide money transmitter powers to state depository institutions that own permitted payment stablecoin issuers. But...

On Friday, May 30th, the CFPB filed a motion for summary judgment in Forcht Bank v. CFPB asking the court to vacate the entire rule implementing Section 1033 (Rule). The motion argues that the Rule is unlawful under the Administrative Procedure Act (APA) as it exceeds the agency’s statutory authority and is arbitrary and capricious. The CFPB states that the change in position is the result of the agency’s review of existing rules under Executive Order 14219 to ensure they are based on the best reading of the underlying statute and do not impose undue burdens on small businesses and impede...

There is now a form on Regulations.gov for submitting deregulation ideas in response to last week's OMB RFI. A few observations: The form seems designed to support automated generation of draft Federal Register proposed and final rules through AI-augmented document assembly. The structure of the form roughly follows the structure of a proposed or final rule. It also includes instructions that clearly come from guidance to writers of Federal Register rules. (They forgot to take out this line: "If this is a final rule, you should respond to any relevant and timely comments.") In addition to...

“The OCC discovered that the unauthorized access to a number of its executives’ and employees’ emails included highly sensitive information relating to the financial condition of federally regulated financial institutions used in its examinations and supervisory oversight processes.” OCC Notifies Congress of Incident Involving Email System occ.gov

DOGE’s focus on replacing humans with AI adds significance to this recent FRB OIG report on the Bank Exams Tailored to Risk (BETR) process, which tailors community bank exams to risk through model-driven off-site assessment. BETR models use forward-looking metrics to assign each institution a risk classification for each of 10 risk stripes. Each risk classification is associated with a suggested range of examination hours and tailored procedures. Examiners can then use qualitative factors to override the model-recommended classifications, hours, or procedures. The OIG report was relatively...

On September 17th, the FDIC issued a notice of proposed rulemaking (NPR or Proposed Rule) that would impose on FDIC-insured depository institutions (IDIs) new recordkeeping requirements for custodial deposit accounts with transactional features. Comments are due 60 days after publication in the Federal Register. In addition to inviting comments on all aspects of the Proposed Rule, the FDIC requests comments on specific questions (see attached). The Proposed Rule is partially in response to the bankruptcy of Synapse, a technology company that worked with several IDIs and fintech companies....

This memorandum reviews two issuances released by the federal banking agencies (the Federal Reserve Board, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency, jointly the “Agencies”) related to bank-fintech partnerships: (1) a supervisory guidance (the “Guidance”) on banking-as-a-service (“BaaS”) arrangements; and (2) a request for information on bank-fintech arrangements involving banking products and services distributed to consumers and businesses (the “RFI”). Comments on the RFI are due 60 days after publication in the Federal Register, and the...

We assist financial institutions and fintechs with charter strategy, regulatory applications, and transactions, including bank-fintech partnerships and acquisitions. Our practice covers the full range of licensing options including commercial bank charters, ILC charters, trust bank charters, and money transmission licenses. We prepare regulatory applications, conduct due diligence on acquisition targets, advise on control issues under the Bank Holding Company Act, Bank Merger Act, and Change in Bank Control Act, and help structure bank-fintech partnerships to address regulatory expectations....

We help RegTech software companies and internal teams design, develop, and deliver products for financial services compliance, licensing, and regulatory affairs use cases. We support product management and testing with a unique blend of expert advice and artifacts that encapsulate domain knowledge. We also help teams engaged with financial services customers understand customer needs, communicate product capabilities, and ensure successful implementation. Services provided by the Regulatory Technology practice include: AI Support: We support every stage of AI solution development for...

Our fintech work spans regulatory, strategic, and policy engagements for a diverse range of payment ecosystem participants and digital lenders. Our lawyers have experience working with both traditional and innovative institutions, including: retail and commercial payments and lending fintechs (including buy-now-pay-later providers), fintech banks and neobanks, prepaid program managers and issuers, money transmitters, finance companies, crypto and digital asset service providers, payment processors, payment system infrastructure operators, and payments and credit units of technology companies....

RegTech builders increasingly ship products powered by AI and agentic systems that interact with regulatory texts, decision logic, and live operational data. We bring deep domain expertise in financial regulation to those efforts: curating high-quality training data and knowledge bases, reviewing architecture choices and prompting strategies, evaluating outputs for regulatory accuracy, and surfacing the failure modes specific to working with legal and regulatory content. We also help product teams understand customer needs, communicate capabilities to compliance and risk audiences, and...

Katie Wechsler heads the firm's consumer and housing finance practice. She represents financial institutions and trade associations before Congress and the federal regulatory agencies, with a particular focus on federal consumer financial laws, mortgage lending and servicing, and the implementation and supervision of consumer financial protection requirements. Katie has developed a detailed understanding of the CFPB's authority, including the implementation of section 1033 (personal financial data rights) and section 1071 (small business data collection). Katie previously served as counsel...

BJ Sanford advises payments and fintech companies, U.S. and foreign banks, trade associations, investors, and policy and consulting firms. His practice centers on payments regulation, public policy, and the regulation of bank activities and structure. He also advises clients on regulatory capital, bank investments and control, affiliate transactions, the U.S. operations of foreign banks, and regulatory examinations. Payments regulation. BJ advises payments firms and banks on payment regulation, product development, and compliance with rules including Regulation E, Regulation Z, Regulation II...