Fintech · Industry brief

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Block is seeking OCC approval to establish Builders Bank & Trust, a national trust bank that would provide custody and fiduciary services for bitcoin and stablecoins without taking deposits or making loans. The move follows President Trump's May executive order directing federal agencies to streamline fintech bank charter applications. Block joins numerous other fintechs pursuing banking charters under the current administration, including Revolut (conditional OCC approval last week), Circle Internet Group (final approval in July for stablecoin issuance), Stripe's Bridge subsidiary (conditional approval in February), Affirm Holdings, PayPal, Klarna, and Sezzle. The OCC has approved multiple national trust bank charters including for Ripple, Paxos Trust, BitGo Bank & Trust, and World Liberty Financial, while denying Wise's application in July. Comptroller Jonathan Gould stated the OCC is "once again open for business" regarding new bank charters.

On September 4, the Federal Reserve terminated enforcement actions against United Texas Bank of Dallas and Quontic Bank entities. The action against United Texas Bank, originally issued as a cease-and-desist order on August 29, 2024, had stemmed from an examination identifying significant deficiencies in the bank's risk management and anti-money laundering compliance program, including lax oversight related to crypto customers and foreign correspondent banking, as well as concerns about corporate governance under Bank Secrecy Act and Treasury standards. The Fed provided no explanation for the terminations. On September 2, the OCC, Federal Reserve, FDIC, FinCEN, and NCUA issued a joint statement clarifying confidentiality requirements related to Suspicious Activity Reports, particularly regarding bank communications with customers about potentially fraudulent transactions or account closures. The agencies confirmed that while banks cannot disclose the existence of a SAR, they may communicate underlying facts and transactions to customers so long as such communication does not reveal the SAR itself, even if a reasonable person might suspect or deduce that a SAR was filed based on those facts. On August 28, the FDIC Board approved an interim final rule implementing the 21st Century ROAD to Housing Act's reciprocal deposits framework. The rule replaces the prior cap of the lesser of $5 billion or 20% of total liabilities with a new tiered calculation—50% of the first $1 billion, 40% of the next $9 billion, and 30% above $10 billion, up to $30 billion maximum. The rule also expands "agent institution" eligibility to include institutions with CAMELS composite ratings of 1, 2, or 3, and broadens the definition of qualifying institutions. On August 27, Delaware amended its Personal Data Privacy Act by lowering applicability thresholds and removing the entity-level exemption for GLBA-subject financial institutions, replacing it with a narrower exemption for banks, credit unions, and savings associations. The amendments expand consumer rights to receive lists of specific third parties receiving their data and require impact assessments for profiling in automated decisions with legal or significant effects.