Banking News Roundup – 2025: Week 28
Gould is in at the OCC, the Fed considers the meaning of “well managed,” States make CRA and earned wage access laws, JPMorgan charges fintechs for data, and the Senate seeks clarity on crypto rules.
Washington D.C.
Jonathan Gould was confirmed as Comptroller of the Currency in a 50–45 Senate vote. Gould, who previously served as the OCC’s chief counsel and later as chief legal officer at crypto firm Bitfury, is expected to take a more permissive stance on digital assets and innovation. His confirmation ends Rodney Hood’s tenure as Acting Comptroller.
Senator Maggie Hassan launched a sweeping initiative to combat scams and fraud, particularly those enabled by artificial intelligence and digital payment platforms. As ranking member of the Joint Economic Committee, Hassan is calling for both government and industry action, including investigations, legislative proposals, and a public survey to gather victim data. Her effort targets scams proliferating through spam calls, text messages, and peer-to-peer payment platforms like Venmo and Zelle. A real-time example of the need for such safeguards played out in Texas this week. American Banker reports that scammers impersonated a flood relief Venmo account set up by a local fire department, siphoning donations and prompting a temporary freeze of the legitimate account. The incident underscores the growing risks of account impersonation—especially during natural disasters.
The Department of Housing and Urban Development (HUD) disbanded the Biden-era Property Appraisal and Valuation Equity (PAVE) task force, withdrawing several related mortgagee letters and eliminating policies aimed at addressing appraisal bias. HUD Secretary Scott Turner framed the move as part of a broader effort to cut “DEI-driven red tape” and reduce mortgage costs under the Trump administration. PAVE was launched in 2021 to combat racial and ethnic bias in home appraisals following several high-profile incidents during the pandemic. While the Biden administration had cited early progress—claiming a 40% reduction in the racial appraisal gap—HUD argues the policies imposed unnecessary regulatory burdens.
Regulation
The Federal Reserve issued a proposal to revise how it evaluates large financial institutions (LFIs), aiming to loosen the criteria for receiving a “well managed” supervisory rating. Under the current framework, a single deficiency in capital, liquidity, or governance automatically disqualifies an LFI from the designation—limiting its ability to pursue mergers or acquisitions. The proposed change would allow a bank with a deficiency in one of the three categories to still qualify as “well managed.” The practical impact of the change, championed by Vice Chair for Supervision Michelle Bowman, is that it diminishes the weight of an LFI’s governance score. Critics, including Governor Michael Barr, warned that the change would take pressure off banks to resolve serious operational concerns, such as cybersecurity or consumer protection.
Fannie Mae and Freddie Mac now accept VantageScore 4.0 for mortgage underwriting, expanding beyond their long-standing reliance on FICO’s classic score. The move, announced informally by Federal Housing Finance Agency (FHFA) Director Bill Pulte via X (formerly Twitter), fulfills a mandate under the 2018 Credit Score Competition Act and aims to increase access to credit by incorporating rental and utility data. While the update introduces a competing score, it preserves the current tri-merge credit report requirement—a relief for lenders who feared disruptive operational changes.
In a win for the credit industry, a federal judge in Texas vacated the Consumer Financial Protection Bureau’s (CFPB) medical debt rule and permanently barred the agency from reissuing it. The rule, introduced under former Director Rohit Chopra, would have removed approximately $49 billion in medical debt from credit reports, affecting an estimated 15 million consumers. Judge Sean Jordan of the U.S. District Court for the Eastern District of Texas ruled that the CFPB exceeded its authority under the Fair Credit Reporting Act, which permits medical debt to be included on credit reports if health details are obscured. He also rebuked states that enacted their own restrictions, stating such laws are preempted by federal statute.
New Jersey lawmakers introduced a bill to establish a state-level Community Reinvestment Act (CRA), expanding oversight to include nonbank mortgage lenders, credit unions, and online institutions. The proposal comes as federal CRA reforms are rolled back and would make New Jersey one of the few states to incorporate a disparity study in enforcement.
Meanwhile, Louisiana and Connecticut are the 11th and 12th states to enact earned wage access (EWA) laws. Louisiana’s approach aligns with existing frameworks in other states and avoids classifying EWA as lending. Connecticut’s law, however, is the strictest to date, capping fees and requiring payroll verification. Industry groups welcomed the clarity but warned that compliance could become more complex as rules diverge across states.
Fintech
JPMorgan Chase will begin charging data aggregators for access to customer bank account information—a dramatic shift that could reshape the fintech business model. Platforms like PayPal, Coinbase, and Robinhood rely on this data to facilitate payments and transfers, typically at no cost. Fees could exceed the revenue on some transactions by up to 1,000%, with payments-focused aggregators facing the highest charges. JPMorgan says the fees reflect its substantial investment in secure data infrastructure. But fintech advocates argue the move exploits regulatory uncertainty following the Trump administration’s rollback of the CFPB’s open banking rule.
According to Treasury Prime’s 2025 Banking Innovation Index, 99% of community bank leaders see embedded finance as vital to long-term survival. Over half are exploring or launching banking-as-a-service (BaaS) programs, with strong interest in embedded lending and payments. While banks remain cautious amid increased regulatory scrutiny, many view embedded finance as a path to low-cost deposits and noninterest income.
Digital Assets (aka Cryptocurrency)
The Senate Banking Committee held a high-profile hearing on crypto market structure legislation this week, with bipartisan concern over the House’s CLARITY Act. Senator John Kennedy warned—colorfully—against letting the crypto industry “write its own rules,” while Senator Elizabeth Warren pushed for conflict-of-interest protections tied to President Trump’s personal crypto holdings. Lawmakers remain divided on how to classify digital assets, but agree the U.S. is lagging global peers in developing a framework.
Bank of New York Mellon (BNY) announced it will serve as the primary custodian for the reserves backing RLUSD, a stablecoin issued by Ripple. Designed for enterprise payments and issued under NYDFS oversight, RLUSD has reached a $517 million market cap since its December 2024 launch. BNY also holds reserves for Circle’s USDC, which currently has a $63.7 billion market cap, and for Société Générale’s CoinVertible, a euro-denominated institutional stablecoin with a self-reported circulating supply of €33 million.
Circle is reportedly partnering with Ant Group to integrate USDC into Ant’s blockchain platform, a move that could significantly expand the stablecoin’s global footprint. Ant, the parent of Alipay and operator of the world’s largest mobile payments platform, plans to use USDC to enhance cross-border payment efficiency pending full U.S. compliance under the recently passed GENIUS Act.
Transactions
Business First Bancshares, Inc., the holding company for b1BANK, announced a deal to acquire Progressive Bancorp, Inc. in a $82.6 million all-stock transaction. The two Louisiana banks will combine to form a $8.5 billion institution.
Civista Bancshares, Inc. agreed to acquire The Farmers Savings Bank in a cash-and-stock deal valued at $70.4 million. The two Ohio banks will combine to form a $4.4 billion asset institution. Civista also launched a public offering of 3,294,120 common shares at $21.25 per share, for anticipated net proceeds of $65.5 million excluding the underwriter’s option. Proceeds will be used for general corporate purposes, including organic growth and potential strategic transactions.
Norwood Financial Corp, the holding company for Wayne Bank, agreed to acquire PB Bankshares, Inc., the parent of Presence Bank, in a $54.9 million cash-and-stock transaction. The two Pennsylvania firms will combine to form a $3 billion asset institution.