BPInsights: September 26, 2026

5 Things to Know: How Fraud and Scams Harm Consumers

Recent BPI research examined the CFPB's Making Ends Meet Survey to glean insights about the damage that fraud and scams inflict on American consumers. Here are 5 key takeaways from the research.

1. Financial exposure is substantial and concentrated. Exposure in 2024 amounted to $67 billion, with a minority of cases generating most of the financial harm.
2. The costs can extend beyond the immediate loss. Fraud and scam victims are about 15 percentage points more likely to struggle with paying bills in the year following the incident. The total financial costs associated with fraud and scams can also include curtailed access to credit and weakened trust in the financial system.
3. Personality and behavioral traits make some people particularly vulnerable to fraud and scams. Individuals with lower or more variable incomes are more likely to experience fraud. Lower levels of patience, a recent history of gambling and lower satisfaction with one's financial situation also increase susceptibility.
4. Financially stressed consumers are more vulnerable to fraud and scams that may promise improvement in their financial circumstances.
5. Reporting is incomplete and gravitates toward financial institutions, which consumers view as more helpful than law enforcement or federal agencies. This pattern can make a comprehensive view of fraud incidents more challenging to capture by regulators alone and impede their efforts to monitor and respond to fraud.

Five Key Things

1. Fed Plans to Raise Tailoring Thresholds

The Federal Reserve is planning to propose reindexing thresholds that trigger more stringent capital, stress testing and liquidity requirements for larger banks, accounting for economic growth and inflation. The changes may come later this year, according to Reuters reporting this week. The lowest threshold currently starts at $100 billion in assets and would likely be raised to closer to $150 billion, Reuters reported. The highest threshold would be reindexed closer to $1 trillion.

2. How U.S. Regulation of Foreign Banks Gets Lost in Translation

Foreign banks with significant U.S. assets are required to consolidate their U.S. subsidiaries under a single legal entity - an intermediate holding company. The concept allows the Federal Reserve to regulate and supervise the U.S. operations of foreign banks like a domestic bank holding company. However, applying top-tier parent company requirements to an intermediate entity can create unintended consequences. In a new blog post, BPI examines several targeted reforms that would subject foreign banks in the U.S. to a more tailored, proportionate framework, supporting financial stability while preserving the benefits globally active banks bring to the U.S. economy.

3. Tokenized Deposits, Stablecoins: BPI's Baer Discusses Digital Asset Issues at Philly Fed Conference

BPI CEO Greg Baer participated in a panel on tokenized deposits and stablecoins on Thursday at the Federal Reserve Bank of Philadelphia's annual Fintech Conference. Other panelists were Circle treasurer Dan Fishman, Custodia CEO Caitlin Long, Vantage Bank's Shawn Main and Fiserv's Mike McCoy.

• Security. Baer responded to a question about the relative security of stablecoins versus tokenized deposits. "I think it's hard to argue that the tokenized deposits aren't far more secure than stablecoins," he said. "You don't have the cross-chain bridges. You're using an established network. I think what TCH is trying to do in permissioned networks - it does not run a lot of these risks."
• Filling the Void. Moderator Brooke Ybarra asked Circle's Dan Fishman if stablecoins should facilitate the interoperability of different networks. "It fills the void between the spaces of these networks where there aren't connection points, right?" Fishman responded. "That's the real benefit, in my view - where the stablecoin fits in, is to connect all these networks." Baer expressed skepticism about stablecoins as a settlement mechanism for tokenized deposit transfers. "I don't see any way a stablecoin could be the settlement mechanism for a transfer of tokenized deposits," he said. "I think that what The Clearing House is going to do is they're going to do a hybrid that will clear with RTP or CHIPS. But I mean, if you look at all the projects out there - Agorá, RLN [Regulated Liability Network], we actually worked with them - I mean, what they're all pointing towards is eventually you're going to have to clear and settle in central bank money, and … either that's a Fedwire or a tokenized version of that. But I just don't see any way around that ultimately." Caitlin Long said that this is the reason why Custodia applied for a master account in 2020 (the application was denied).
• Redemption Problems. Baer flagged the fraught redemption rights and lack of resolution framework for stablecoins, as noted in BPI's June 2026 analysis of sources of stablecoin instability.
• What Will Dominate? Ybarra asked panelists to predict which platform will host the largest volume of tokenized money in five years. McCoy and Main said tokenized deposits. Long specified tokenized deposits "in a permissioned public blockchain." Fishman said "all of the above." Baer said tokenized deposits would likely prevail in the U.S., but there could be a "legitimate overseas use case" for stablecoins in regimes with capital controls or hyperinflation. "At some point, our government … is going to have to confront what Tether is and what it is enabling around the world," he said.

4. BPI Responds to FTC Proposal to Combat Impersonation Scams

BPI issued the following statement Thursday in response to the Federal Trade Commission's advance notice of proposed rulemaking on impersonation scams:

"We support the FTC's proposal today to protect consumers from impersonation scams. The FTC rightly notes that these scams 'have been amplified by search engine, social media, and other digital marketplace platforms that profit from optimizing online ads for third parties, regardless of whether the third parties are legitimate.'

The framework would demand greater accountability from platforms where these scams spread and find new victims. We look forward to reviewing the proposal in detail and providing comments."

5. The Ledger

Here's what's new in digital assets.

• Fed Issues GENIUS Act Proposals. The Federal Reserve on Thursday issued two proposals related to payment stablecoin regulation under the GENIUS Act. The first proposal would require Fed-supervised payment stablecoin issuers to fully back their coins with high-quality liquid assets such as short-term Treasuries. It would establish standardized capital requirements and introduce rules for firms that hold the assets backing payment stablecoins, among other things. Notably, it would clarify the permissibility of stablecoin and related activities for banks under its supervisory purview. The second proposal would establish a tailored application process for Fed-supervised banks applying to issue payment stablecoins, as well as creating a process for appeals, hearings and final application determinations.
• SEC's Uyeda: Innovation Exemption is Just the Start. The Securities and Exchange Commission's recent invocation of the "innovation exemption" to allow tokenized stock trading is just the beginning of a broader effort to promote crypto innovation, Chairman Mark Uyeda said at a Georgetown conference this week. "More to come," he said. "Crypto is a very significant policy initiative of this administration and this SEC."
• CFTC Updates FAQs on Crypto, Blockchain Issues. The Commodity Futures Trading Commission this week announced updates to its Frequently Asked Questions on "registrant and registered entity activities relating to crypto assets and blockchain technologies." The new clarifications address investments of customer funds in tokenized forms of permitted investments and the use of blockchain to satisfy a registrant's recordkeeping requirements. The FAQs were originally published on March 20, 2026 and aimed to clarify market participants' questions on blockchain and crypto activities.
• Crypto Exchange Bitget Reports Hack. Crypto exchange Bitget reported an estimated $351.6 million in unauthorized transfers from its wallets and suspended withdrawals, the latest in a series of recent crypto hacks.
• Crypto Fuels Kremlin's Sanctions Workarounds. In addition to crypto's central role in Iranian sanctions evasion and war financing, it has played a pivotal role in Russia's shell companies and other sanctions workarounds, according to recent New York Times reporting. The article focuses on A7, a Moscow-based financial firm at the root of a sanctions evasion network. "Since early 2025, the European Union, Britain and the United States have targeted some companies and individuals linked to the firm, as well as the ruble-pegged cryptocurrency it controls," the article says. "But the operation is built to be resilient."
• Peirce Prepares to Depart SEC. In a recent speech at a SIFMA event, Republican SEC Commissioner Hester Peirce flagged her upcoming departure and set out her views on innovation policy. Peirce is known for her pro-crypto regulatory views. She posted her resignation letter on X yesterday, effective October 2nd.

In Case You Missed It

SVB Report: Some Initial Reactions

Starling Advisory Group, hired by the Federal Reserve to investigate Silicon Valley Bank's failure and the Fed's preceding supervision of the bank, released a preliminary report of its findings this week. Those findings were:

• SVB failed in 2023 because it suffered massive losses when interest rates rose, its depositors ran, and it had insufficient contingent-liquidity readiness.
• By June 2022 at the latest, and perhaps as early as March, Federal Reserve supervisory staff knew, or should have known, that SVB was highly vulnerable to massive losses and a potentially ruinous run.
• Despite that awareness, Board S&R and FRBSF supervisors did not require SVB to reduce its interest-rate risk or exposure to runs by uninsured depositors.
• Their failure to do so did not result from the 2018 tailoring statute (EGRRCPA) or a less assertive supervisory culture promoted by the implementation of related policy priorities.
• Board S&R has featured a culture of uncertainty regarding decision-making authority that dates back decades, and which is directly implicated in its failure to take decisive action at SVB.
• Emphasis on collegial decision-making through committees fosters inaction due to a divorcing of responsibility, authority, and accountability across the Federal Reserve supervisory system.
• Social media did not fuel the run at SVB: if "social media" is understood to imply platforms like Twitter, chatter regarding the run at SVB began after it was well underway; and if "fueled" is meant to imply either 'triggering' or 'accelerating' the run, then close analysis of time-stamped Twitter data disconfirms either interpretation.

The Fed commissioned Starling to conduct an independent review of "any lapses in supervision that may have contributed to SVB's failure" and to recommend reforms in supervisory practices.

The report depicts an unfocused supervisory regime that issued a flurry of MRAs and MRIAs on a wide range of perceived shortcomings yet failed to properly identify or mitigate the liquidity and interest-rate risks that brought down the bank. The impression that emerges from the report - which is expected to be followed by subsequent reports - is one of a distracted, disjointed supervisory system that missed the forest for the trees. That impression is familiar - it's also reflected in BPI's postmortem analysis of the supervision of SVB from May 2023. (Worth noting: This initial report does not reflect interviews with the frontline examiners from the Federal Reserve Bank of San Francisco; those perspectives will likely be included in subsequent reports.)

Read more key findings here.

Fed's Jefferson Highlights Discount Window Efforts

In a speech this week, Federal Reserve Vice Chair Philip Jefferson outlined recent improvements to the Fed's discount window. For example, the Fed's Reserve Banks are now using the same collateral framework, loan valuation models and processing technology, and all accept electronic signatures. New updates also allow banks to pledge several different loan types to maximize liquidity while maintaining possession of collateral, Jefferson said.

• Online Portal. The Fed's Discount Window Direct portal, launched in 2024, has enhanced the efficiency of the borrowing process, according to Jefferson. "Faster, more efficient discount window access gives banks greater certainty as they manage fast-moving liquidity needs," he said. "As adoption grows and new features are added, this technology will continue improving the discount window experience."
• FHLB Collaboration. The Fed's collaboration with the Federal Home Loan Banks, another source of backup liquidity, is crucial to maintaining the flow of liquidity under stress. "Given the increased speed with which liquidity can now move, a key focus of ours has been reducing the time it takes to re-allocate collateral by enhancing interoperability between Reserve Banks and FHLBs," Jefferson said.
• Treasury Market. Jefferson also noted that the discount window serves an important role stabilizing money markets by allowing banks to borrow against Treasury securities and by providing funds when pressure drives money market rates above the discount rate.

BPI, Financial Services Trades Urge FCC to Adopt Outcome-Based Robocall Scorecard

In a new comment letter filed this week, BPI and other financial services trade associations expressed strong support for the Federal Communications Commission's proposed Robocall Mitigation Scorecard while recommending changes to ensure it provides consumers and businesses with meaningful information about voice service providers' effectiveness in preventing illegally spoofed calls and texts.

Fraudsters routinely use spoofed calls to impersonate banks, credit unions, nondepository financial institutions and other trusted organizations, potentially facilitating the theft of login credentials, account takeovers, fraudulent transfers and other substantial losses. In the letter, the associations commend the FCC for its continued efforts to protect consumers from illegal spoofing and restore trust in the nation's communications networks.

The associations urged the FCC to base the scorecard on measurable results rather than rating providers solely on their compliance with existing laws. Specifically, the letter recommends that the scorecard report the number of illegally spoofed calls that pass through a provider's network without being blocked as a percentage of the network's total call volume. Read the full letter here.

BPI Statement on Senate Introduction of the TIER Act

BPI issued a statement this week on the Senate introduction of the TIER Act. The bill would update the statutory tailoring thresholds set on a bipartisan basis in S. 2155 to reflect economic growth, with periodic adjustments thereafter, and require the federal banking agencies to similarly review and update the non-statutory thresholds periodically.

"Adjusting these tailoring thresholds is critical to enable banks to facilitate economic growth. An expanding economy drives more demand for credit. When tailoring thresholds remain fixed and not updated to reflect economic growth, a bank's total exposures might grow larger simply because economic output is growing, not because the bank's portfolio is becoming riskier or more complex. However, the fixed thresholds would still subject the bank to stricter requirements. The adjustments in this crucial legislation would prevent that misalignment and thereby avoid needless costs to bank financing. We thank Senator Britt for taking the lead on this important measure."

Traversing the Pond

Here's the latest in international banking policy.

• Schnabel to Depart ECB for IMF Job. European Central Bank Executive Board Member Isabel Schnabel is leaving the central bank for a senior position at the International Monetary Fund, according to media reports this week. Schnabel is departing ahead of the end of her scheduled term.
• ECB, National Central Banks Urge Caution on Stablecoin Reserves as Deposits. Stablecoin issuers should not be required to hold a minimum proportion of their reserves as bank deposits, because of the potential run risk exposure to banks, according to comments by the European System of Central Banks. Instead, regulators should specify a minimum percentage which should be held in assets that mature within one and five working ​days. The group is composed of the ECB and the 27 national central banks in the EU. The comments came in response to the Markets in Crypto Assets (MiCA) regulation in the EU.
• EBA Chief Warns Against Pitfalls of Fragmentation. Fragmentation in the EU banking market is precluding banks from achieving the scale necessary to finance Europe's defense initiatives and support digital innovation, European Banking Authority Chair François-Louis Michaud said in a Reuters interview. The single market is "not as single as it should be," he said.

Member News

Barclays Pledges Support for 1.5 Million Businesses and Entrepreneurs by 2030

Barclays this week announced the launch of Backing Britain's Future, a commitment to support 1.5 million businesses and entrepreneurs by the year 2030. The project includes access to capital, skills training and support in AI adoption. Learn more here.

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• Assistant Vice President, Research Analyst

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• 10/13/2026-10/16/2026: DC Fintech Week
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