Author: Joseph E. Silvia

On May 19, 2026, President Trump signed two Executive Orders that will significantly impact the regulatory landscape for financial institutions, fintech companies, and market participants across the United States. This alert summarizes the key provisions of each order and highlights critical compliance considerations for our clients.

Executive Order on Restoring Integrity to America’s Financial System

This Executive Order is directed at safeguarding the U.S. financial system from illicit use and addressing risks that the Administration associates with the extension of financial services to what the order terms “non-work authorized populations.” The order declares it the policy of the Administration to “restore integrity to America’s financial system, safeguard financial institutions against structural risks, and deter fraud and abuse.”

Treasury Advisory on Financial System Exploitation

Within 60 days, the Secretary of the Treasury is required to issue a formal Advisory to financial institutions regarding risks associated with exploitation of the U.S. financial system by non-work authorized populations and their employers. The Advisory must describe specific red flags and typologies of suspicious activity, including the following categories:

Payroll tax evasion patterns, including systematic failure to withhold or remit Federal employment taxes for non-work authorized individuals. Use of foreign-identity documents, nominee accounts, shell companies, or complex “funnel” structures designed to obfuscate the identity of beneficial owners or conceal the true nature of payroll disbursements. Use of unregistered money services businesses, third-party payment processors, or peer-to-peer platforms to facilitate off-the-books wage payments intended to bypass Bank Secrecy Act reporting thresholds or tax obligations. Patterns of repetitive, sub-threshold cash withdrawals or deposits correlated with payroll cycles, characterized as “structuring and micro-structuring.” Financial activity indicative of labor trafficking or forced labor (as defined in 18 U.S.C. § 1589), where proceeds are commingled with legitimate business revenue or transferred to foreign jurisdictions. Use of Individual Taxpayer Identification Numbers (ITINs) to obtain credit products or open depository accounts where the applicant lacks verified lawful immigration status, which the order identifies as a risk factor requiring enhanced due diligence.

Strengthened Customer Due Diligence and Identification Requirements

Within 90 days, the Secretary of the Treasury, in consultation with Federal functional financial regulators (defined as the Federal Reserve Board, OCC, FDIC, and NCUA), must propose changes to Bank Secrecy Act implementing regulations to strengthen risk-based customer due diligence requirements. These changes should ensure that institutions collect and verify sufficient customer identity information to reasonably identify both nominal and beneficial owners of accounts in order to assess risks related to illicit finance, sanctions evasion, fraud, or other unlawful activity. Institutions should also maintain authority, where warranted by risk indicators or supervisory concerns, to obtain additional information — including information relevant to whether account holders possess lawful immigration status and employment authorization — as part of a risk-based due diligence program.

Within 180 days, the Treasury and regulators must also consider changes to customer identification program requirements, including addressing risks that foreign consular identification cards may pose to the integrity of the U.S. financial system.

Addressing Structural Credit Risks

Within 60 days, the Consumer Financial Protection Bureau (CFPB) is directed to consider clarifying that potential deportation and loss of wages are factors that could adversely affect a non-work authorized borrower’s ability to repay credit under the “ability-to-repay” standards in 12 C.F.R. Part 1026, and that lenders may consider such factors as part of a reasonable and good-faith underwriting determination. Each Federal functional financial regulator must also issue guidance within 60 days regarding the management of credit risks posed by the non-work authorized population.

The order frames this directive in safety-and-soundness terms, noting that lending to individuals without legal work authorization or who face substantial loss-of-wage risk creates a structural “ability to repay” deficiency that undermines the safety and soundness of the national banking system.

Executive Order on Integrating Financial Technology Innovation into Regulatory Frameworks

The second Executive Order focuses on fostering financial technology innovation by updating regulatory frameworks to reduce barriers to entry and promote collaboration between fintech firms, regulated financial institutions, and Federal regulators. The order declares it the policy of the United States to “streamline regulatory processes, reduce unnecessary barriers to entry, and encourage collaboration between fintech firms, federally regulated financial institutions, and Federal financial regulators.”

Definition of Fintech Firm

The order defines “fintech firm” broadly as any non-bank company that uses or develops technological means to offer or support the offering of financial products or services, expressly encompassing payment processing, lending, deposit-taking, derivatives, investment management, brokerage, underwriting, custodial and fiduciary services, digital banking, digital asset-related services, securities and commodities market activities, and blockchain-based services. The definition also cross-references the activities set forth in sections 4(k)(4)(A) through (G) of the Bank Holding Company Act of 1956.

Regulatory Review and Streamlining

Within 90 days, each Federal financial regulator — defined to include the CFPB, SEC, NCUA, CFTC, FDIC, and OCC — must conduct a review of existing regulations, guidance, supervisory practices, and application processes to identify those that could be updated to facilitate innovation and competition for fintech firms, particularly small and emerging ones. These reviews must specifically identify regulations and other items that unduly impede fintech firms from entering into partnerships with federally regulated institutions, as well as items that could be amended to streamline application processes for bank charters, credit union charters, deposit or share insurance, and other Federal licenses and authorizations. The reviews must balance innovation interests with “safety and soundness, consumer and investor protection, market integrity, financial stability, and oversight.”

Within 180 days, each regulator must take steps, in consultation with the Assistant to the President for Economic Policy, to encourage innovation as a result of the review.

Access to Federal Reserve Payment Services

The order requests the Federal Reserve Board (FRB) to conduct a comprehensive evaluation of the legal, regulatory, and policy framework governing access to Reserve Bank payment accounts and payment services by uninsured depository institutions and non-bank financial companies, including those engaged in digital assets and other novel financial activities. Within 120 days, the FRB is requested to submit a report to the President setting forth its findings, options, and recommendations.

The FRB evaluation is requested to assess the legal authority of the Federal Reserve to extend direct access to payment accounts and services to such covered firms; options for expanding such access subject to appropriate risk management; legal impediments precluding direct access and legislative or regulatory options to enable it; and whether individual Federal Reserve Banks have independent legal authority to grant or deny access, and what FRB-level regulations or policies should ensure consistency across all twelve Reserve Banks.

To the extent the FRB determines that existing law permits extending direct access for covered firms, it is requested to establish transparent application procedures and to make determinations on complete applications within 90 days of the application date.

Key Takeaways for Financial Institutions and Fintech Firms

Financial institutions should begin assessing their current customer identification, due diligence, and BSA/AML compliance programs in anticipation of the Treasury Advisory and forthcoming regulatory changes under the first order. Lenders should evaluate the potential impact on their underwriting standards and credit risk management practices, particularly with respect to the CFPB’s anticipated ability-to-repay guidance.

Fintech firms should closely monitor the regulatory reviews mandated by the second order, which may open new partnership and licensing pathways with regulated institutions. The FRB’s evaluation of access to Federal Reserve payment services could be particularly consequential for digital asset firms and other non-bank financial companies seeking direct access to the payments infrastructure.

Both orders include standard general provisions clarifying that they do not create any right or benefit enforceable at law or in equity by any party, and that implementation is subject to applicable law and the availability of appropriations.

This alert is for informational purposes only and does not constitute legal advice. Please contact the author or any one of our Fintech team members with questions about how these Executive Orders may affect your business and how we can support you.

Duane Morris LLP has a dedicated team of banking and financial services attorneys with deep experience handling complex transactional, regulatory, and litigation matters. Our attorneys regularly advise clients on M&A, strategic transactions, litigation and enforcement, and regulatory compliance. For more information or for questions related to this alert, please contact the author(s), your Duane Morris attorney contact, or visit our website at Duane Morris.

Yesterday, February 25, 2026, the Office of the Comptroller of the Currency (“OCC“) issued a proposed rulemaking to implement the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act (the “Proposed Rule“).

Here’s a brief rundown of what was released:

1. Purpose – To implement the GENIUS Act (12 U.S.C. 5901 et seq.) as it applies to: (i) Permitted payment stablecoin issuers under OCC jurisdiction; (ii) Foreign payment stablecoin issuers; and (iii) Certain custody activities conducted by OCC-supervised entities.

2. The proposal establishes a robust (and relatively traditional) regulatory framework for the issuance of payment stablecoins, including capital, reserve, custody, and licensing requirements.

3. The Proposed Rule outlines the “self-executing” provisions of the GENIUS Act (not addressed in the rulemaking – those provisions which, for example, clarify the exclusive role of the OCC in overseeing Federal qualified payment stablecoin issuers; ensure that Federal qualified payment stablecoin issuers and subsidiaries of OCC-regulated insured depository institutions approved to be permitted payment stablecoin issuers are subject to only one licensing requirement—the OCC’s; and address the effect of the GENIUS Act on State consumer protection laws.

4. Request public comment on 211 unique questions on the proposal and its implementation. Each of these questions appear below (just kidding – click on the link to the Proposed Rule and scan for what interests you the most).

5. New Part 15 to Chapter 12 of the Code of Federal Regulations – Stablecoins.

6. Monthly reporting (template form included in the Proposed Rule) for Payment Stablecoin Issuers – signed by the CEO and CFO!

7. Listing of Permitted Activities

(1) Issue payment stablecoins;

(2) Redeem payment stablecoins;

(3) Manage reserves related to the issuance or redemption of payment stablecoins, including purchasing, selling, and holding reserve assets or providing custodial services for reserve assets, consistent with applicable State and Federal law;

(4) Provide custodial or safekeeping services for payment stablecoins, required reserves, or private keys of payment stablecoins, consistent with subpart C of this part;

(5) Assess fees associated with purchasing or redeeming payment stablecoins;

(6) Act as principal or agent with respect to any payment stablecoin;

(7) Pay fees to facilitate customer transactions; and

(8) Undertake any other activities that directly support any of the activities described in paragraphs (a)(1) through (4) of this section.

and Prohibited Activities

(1) Use a deceptive name by using any combination of terms relating to the United States Government, including “United States,” “United States Government,” and “USG,” in the name of the payment stablecoin. This prohibition does not apply to abbreviations relating directly to the currency to which the payment stablecoin is pegged, such as “USD”.

(2) Market a payment stablecoin in such a way that a reasonable person would perceive the payment stablecoin to be: (i) Legal tender as described in 31 U.S.C. 5103; (ii) Issued by the United States; or (iii) Guaranteed or approved by the Government of the United States.

(3) Directly or through implication represent that payment stablecoins are backed by the full faith and credit of the United States, guaranteed by the United States Government, or subject to Federal deposit insurance or Federal share insurance.

(4) Pay the holder of any payment stablecoin any form of interest or yield (whether in cash, tokens, or other consideration) solely in connection with the holding, use, or retention of such payment stablecoin. (i) The OCC presumes that a permitted payment stablecoin issuer is paying interest or yield (whether in cash, tokens, or other consideration) to the holder of a payment stablecoin solely in connection with the holding, use, or retention of such payment stablecoin if: (A) The permitted payment stablecoin issuer has a contract, agreement, or other arrangement with an affiliate of the issuer or related third party to pay interest or yield to the affiliate or related third party; (B) The affiliate or related third party identified in paragraph (c)(4)(i)(A) of this section or, if the person is a related third party, an affiliate of such related third party has a contract, agreement, or other arrangement to pay interest or yield (whether in cash, tokens, or other consideration) to a holder of any payment stablecoin issued by the permitted payment stablecoin issuer solely in connection with the holding, use, or retention of such payment stablecoin; and (C) To the extent the person, or an affiliate of the person, identified in paragraph (c)(4)(i)(A) is a related third party of the permitted payment stablecoin issuer because the permitted payment stablecoin issuer issues payment stablecoins on the related third party’s behalf or under the related third party’s branding, the arrangement identified in paragraph (c)(4)(i)(B) of this section considers the holder of the payment stablecoin to be the holder of a payment stablecoin issued by the permitted payment stablecoin issuer on the related third party’s behalf or under the related third party’s branding. (ii) For purposes of paragraph (c)(4)(i) of this section, a related third party means: (A) A person offering to pay interest or yield to payment stablecoin holders as a service; and(B) Any person that the issuer issues payment stablecoins on the person’s behalf or under the person’s branding. (iii) A permitted payment stablecoin issuer may rebut the presumption in paragraph (c)(4)(i) of this section by submitting written materials that, in the OCC’s judgment, demonstrate that the contract, agreement, or other arrangement is not prohibited under paragraph (c)(4) of this section and is not an attempt to evade the prohibition.

(5) Pledge, rehypothecate, or reuse any reserve assets required under § 15.11 either directly or indirectly (e.g., through a third-party custodian of the reserve assets) except for the purpose of: (i) Satisfying margin obligations in connection with investments in permitted reserves under § 15.11(b)(4) or (5); (ii) Satisfying obligations associated with the use, receipt, or provision of standard custodial services; or (iii) Creating liquidity to meet reasonable expectations of requests to redeem payment stablecoins, such that reserves in the form of Treasury bills with a maturity of 93 days or less may be sold as purchased securities in repurchase agreements, provided that either: (A) The repurchase agreements are cleared by a clearing agency registered with the Securities and Exchange Commission; or (B) The permitted payment stablecoin issuer receives prior approval from the OCC. All repurchase agreements under this paragraph (c)(5) wherein the Treasury bills that are sold as purchased securities have a maturity of 93 days or less are approved by the OCC.

(6) Engage in any activity that the OCC determines is an evasion of the requirements of section 4 of the GENIUS Act (12 U.S.C. 5903) or this part.

More to come on this, but big time release with a very robust proposed regulatory framework. Stay tuned!

On December 9, 2025, the Office of the Comptroller of the Currency (“OCC”) issued Interpretive Letter #1188 (the “Interpretive Letter”) which confirms that national banks may engage in riskless principal crypto-asset transactions with and on behalf of their customers.

The Interpretive Letter indicates that “[i]n a riskless principal transaction, an intermediary purchases an asset from one counterparty for immediate resale to a second counterparty” who is the ultimate purchaser of the asset. In these transactions, the intermediary is the national bank, and its “purchase from the initial counterparty is conditioned on an offsetting order from a second counterparty to purchase the same asset from the [national bank].” The offsetting purchase and sale effectively occur simultaneously and the national bank would not actually hold the asset. 

The OCC indicates that in these transactions the intermediary (i.e., the national bank) conducts itself as the legal and economic equivalent of a broker acting as agent.  These transactions are considered “riskless” because the intermediary does not enter into the transaction without also having entered into an immediate offsetting transaction.  However, this doesn’t mean that there is absolutely no risk. 

For crypto-asset securities transactions, the Interpretive Letter quickly articulates that such transactions are permissible for national banks under 12 U.S.C. §24(Seventh) as part of the business of dealing in securities by purchasing and selling securities without recourse and on the order of a customer. 

The OCC then turns to examine the authority for national banks to engage in riskless principal transactions in crypto-assets that are not securities.  The analysis again considers the authorities granted to national banks under 12 U.S.C. §24(Seventh) and the incidental powers “necessary to carry on the business of banking,” which is left undefined by the statute.   However, OCC regulations at 12 C.F.R. §7.1000(c)(1) consider the following factors to determine whether an activity is part of the business of banking:

(i) Whether the activity is the functional equivalent to, or a logical outgrowth of, a recognized banking activity;

(ii) Whether the activity strengthens the bank by benefiting its customers or its business;

(iii) Whether the activity involves risks similar in nature to those already assumed by banks; and

(iv) Whether the activity is authorized for State-chartered banks.

On these riskless principal transactions in crypto-assets that are not securities, the OCC quickly confirms that the first three factors above “weigh strongly in favor of determining that [such transactions] are part of the business of banking.”  Finally on the fourth factor above, the OCC states that “[s]tate banks have long engaged in riskless principal transactions with respect to securities, and state regulatory frameworks concerning crypto-asset activities conducted by state banks are continuing to develop” and that “[i]n light of developing state regulatory frameworks with respect to crypto-asset activities, and states banks’ clear authority to engage in riskless principal securities transactions, this factor does not weigh against determining that national banks may engage in riskless principal crypto-asset transactions.” 

So, what are the key takeaways?

1. Current OCC leadership remains focused on allowing national banks to engage in crypto-related activities and welcomes new applications to do so.
2. While these transactions are labeled as “riskless principal” transactions, they are not completely risk-free.  The OCC itself indicates that (i) there is still counterparty credit risk, as in a non-crypto riskless principal transaction, and (ii) there may also be operational risk presented with these crypto-asset transactions because of the use of new technologies.
3. Regardless of whether a bank is offering crypto-related products or services, these developments are critical to follow. Elements of the traditional financial architecture are changing and it will have implications across the board. 

By: Joseph E. Silvia

On Wednesday, June 25, 2025, Federal Housing Finance Agency (“FHFA”) Director William Pulte issued a directive to Fannie Mae and Freddie Mac to “prepare a proposal for consideration of cryptocurrency as an asset for reserves in their respective single-family mortgage loan risk assessment, without conversion of said cryptocurrency to U.S. dollars.” The Order was issued as Decision No. 2025-360 by FHFA.

This is the first material announcement that would incorporate digital assets into the U.S. mortgage system in a way that would allow the GSEs to consider additional categories of borrower assets when evaluating loan repayment risk. Director Pulte’s Directive further indicated that this broadening of borrower asset consideration may enable the GSEs to “facilitate sustainable homeownership to creditworthy borrowers.”

What this means for lenders will ultimately depend on implementation by the GSEs, but it represents at least a further expansion of cryptocurrencies as an asset class in the mainstream financial system.