BPInsights: July 25, 2026

In This Issue:

• Banks respond to the latest version of the Clarity Act.
• New data on bank impersonation scams.
• Bank examiners need access to sensitive data. Here's how banks can make sure that data stays secure.

New Clarity Act Text Leaves Gaps for Illicit Finance, Yield

BPI this week issued a statement in response to the newly updated Clarity Act stablecoin bill: "We support the establishment of a regulatory framework for digital assets that protects Main Street's access to credit, stops criminals and bad actors from financing their illicit operations with anonymity and impunity and safeguards America's national security interests. Unfortunately, the new Clarity Act text still does not address the bill's shortcomings on these issues.

"The Clarity Act needs a stronger prohibition on interest-like payments for holding stablecoins. Current language in the bill would still allow for ways to pay interest and yield for holding stablecoins, beyond the permitted allowance for rewards based on stablecoin transactions and activities, which will siphon bank deposits and threaten local lending and economic activity across the country.

"The Clarity Act continues to have AML gaps that promote pathways for illicit finance and could jeopardize U.S. national security. The bill must ensure that all Digital Asset Service Providers and other intermediaries are subject to the same robust requirements under the Bank Secrecy Act (BSA) as banks. It must also authorize Treasury to sanction mixers and tumblers, which criminals routinely use to hide illegal activity from law enforcement. Lastly, it must ensure that companies cannot evade their financial, legal and national security obligations under U.S. law by pretending to be 'DeFi' or by incorporating abroad.

"We appreciate Senators working to resolve these issues as the process moves forward."

In addition, BPI and five other banking associations issued a joint statement this week on the updated text: "The banking industry strongly supports establishing clear and rational rules of the road for digital assets, so consumers, the financial system and the economy are protected. Unfortunately, the latest version of the Digital Asset Market Clarity Act released today in the Senate still puts at risk the local lending that drives economic activity in the U.S."

"We are encouraged by the constructive conversations we are having with senators who share our concerns. We appreciate their willingness to consider targeted changes that would strengthen the prohibition on interest-like payments for holding stablecoins, which will siphon away the bank deposits that fuel small business, mortgage and farm loans in communities across the country. Our good faith efforts to strengthen the Clarity Act will continue."

Five Key Things

1. Takeaways from BPI's New Survey on Bank Impersonation Scams

Bank impersonation scams are surging. According to the Federal Trade Commission, consumers lost $3.5 billion to impostor scams, including bank impersonation scams, last year alone. These scams work because they exploit trust in legitimate financial institutions. To protect that trust, and thereby protect consumers, policymakers must require accountability from the platforms where impersonation scams target victims. A BPI survey sheds more light on the volume of such scams, where they originate and spread and the tactics scammers use to deceive consumers, such as fake websites or social media ads, spoofed calls, phony fraud alerts and fake profiles impersonating bank executives.

• The average number of identified bank impersonation scams per institution increased 150 percent from 2024 to 2025.
• Surveyed banks reported an average of 26,196 impersonation scams in 2025.
• Telecom networks are a primary vector for bank impersonation scams, increasing 124 percent from 2024 to 2025.
• Bank impersonation scams originating on social media are increasing and have more than doubled year over year.

Rapid Damage, Slow Takedown. Banks monitor and report these scams to the platforms transmitting them, but the platforms are not always responsive. The survey found that, on average in 2025, social media companies took nearly two weeks to remove organic bank impersonation scam content on their platforms (e.g., fake profiles of bank executives or bank brands, rather than paid content like advertisements).

• On average, social media platforms did not even respond to over 20 percent of takedown requests for this type of scam in 2025.

Bottom Line. Government and the private sector must unite to prevent scammers from exploiting trust with impunity. Only proactive, collaborative steps by the platforms where impersonation scams reach consumers-underpinned by sound policy changes-can restore that trust. 

Other Fraud and Scams Developments. This week, the FCC released an advisory warning consumers about bank impersonation scams. It recommends consumers call their bank directly to verify information if contacted by someone claiming to be from the bank. The advisory follows recent FCC actions aimed at preventing phone scams, including a proposal to expand Know Your Customer requirements for telecom networks and a proposal this week to prevent robocalls. 

• HFSC Releases Staff Report on Fraud. The House Financial Services Committee majority, led by Chairman French Hill (R-AR) and Oversight Subcommittee Chairman Dan Meuser (R-PA), released a report this week highlighting policy efforts to combat fraud and scams. The report highlights upstream intervention by telecom and tech platforms as a vital step toward cutting off scams at the source.

• Canada Seeks Anti-Scam Partnership with U.S. Canada is seeking deeper collaboration with the U.S. on dismantling cyber crime, including fraud and scams. Canadians lost more than C$704 million to fraud in 2025, with reported losses since 2022 now surpassing $2.4 billion, according to Competition Bureau Canada. The international scale of fraud and scam rings means that no country can solve the problem alone, Foreign Minister Anita Anand said.
• Two Charged in Pig Butchering Scam Ring. U.S. prosecutors charged two Chinese nationals in New York City with money laundering conspiracy over allegations that they laundered and concealed millions of dollars in illicit proceeds from "pig butchering" scams. Zhuoying "Jolene" Chen and Haojie "Kevin" Zhang allegedly used a web of shell companies and bank accounts to launder the proceeds from a related fraud that targeted financial institutions, according to the Department of Justice.

2. OCC Denies Wise Trust Charter Application

The OCC disclosed this week that it rejected a national trust charter application by Wise US Inc., the U.S. arm of a major British fintech firm, over concerns that the company would fail to meet anti-money laundering standards and that the organizers did not have sufficient familiarity with national banking laws. The denial cited an enforcement action based on AML issues that ultimately ended in a settlement in July 2025. Wise plans to submit a new application "in due course," according to an SEC filing. The denial stands in contrast to the numerous trust charter approvals the OCC has granted to fintech and crypto firms in the last year.

3. For Examiner Eyes Only: The Safest Ways for Financial Institutions to Share Sensitive Information

Regulators require banks and other financial institutions to share certain sensitive information as part of the examination process. This information can include roadmaps to the institution's cybersecurity defenses, CEO succession plans and M&A proposals. Given the sensitivity of such data and the rise in sophisticated cyber threats, it's critical that financial firms can keep their information secure - including when examiners need to access it. Granular details of such data are often extraneous to the mandate of examiners, who are meant to focus on material risks to the bank, such as interest rate risk. A new paper led by BPI and a coalition of financial trade associations recommends best practices for sharing access to sensitive information in the supervisory process.

"These improved data sharing practices will collectively reduce the cybersecurity risks associated with the collection, retention and transmission of sensitive supervisory information, benefiting customers, investors, financial regulators and supervised institutions alike," the associations wrote in the paper.

4. Fraud, BSA Reform, Crypto: FinCEN Chief Testifies in Oversight Hearing

FinCEN Director Andrea Gacki testified this week at a House Financial Services oversight hearing. Gacki highlighted FinCEN's work to mitigate fraud and modernize Bank Secrecy Act requirements, and lawmakers at the hearing discussed BSA reform efforts, crypto's role in illicit finance and fraud. BPI issued a statement for the record ahead of the hearing, urging FinCEN to prioritize BSA modernization. Here are some other highlights.

• SAR and CTR Reform. Banks file millions of Suspicious Activity Reports and Currency Transaction Reports each year, but only a small percentage are reviewed by law enforcement, noted Rep. Warren Davidson (R-OH). Several lawmakers including Reps. Andy Barr (R-KY) and Joyce Beatty (D-OH) expressed concern that thresholds for these requirements are outdated - for example, the CTR filing threshold has not been adjusted for inflation in decades. Rep. Frank Lucas (R-OK) said banks' AML programs would be more efficient "if FinCEN only receives necessary reports," adding that "the current CTR threshold has not been updated since 1970 - no longer relevant to our world today." Gacki said FinCEN is considering changes to reporting thresholds, but did not specify timing or details.
• Program Rule. The recently proposed AML Program Rule is a "fundamental" shift toward more effective, risk-based AML programs, Gacki said, although she did not provide a firm timeline on when it would be finalized. Rep. Barr asked why updates to SAR and CTR thresholds were not included in the Program Rule. Gacki declined to comment on that question because it pertained to an open rulemaking.
• Examination. Rep. Joyce Beatty (D-OH) expressed concern that AML exams "bear no connection to national security priorities," emphasize process over outcomes, stifle innovation and fail to provide meaningful feedback on whether reporting is useful. FinCEN is hearing similar feedback from banks, Gacki said, and emphasized the Program Rule as a step toward more consistency in AML supervision and enforcement. She also noted the necessity of close communication between law enforcement and banks.
• Fraud. Gacki highlighted FinCEN initiatives to fight fraud, including major enforcement actions and bank information-sharing guidance. Rep. Sean Casten (D-IL) asked whether FinCEN needs broader authority to disrupt fraud infrastructure at an earlier stage, referring to forthcoming legislation on the subject. "I'd like to give you the tools so that you can actually go after people who are committing financial fraud … so that we're not waiting for all these procedures," he said.
• Crypto. Casten also mentioned his bipartisan legislation to impose stronger requirements on crypto ATMs, which are a major vector for scams. Rep. Bill Foster (D-IL) noted that crypto ATM scams can devastate elderly victims by inducing them to withdraw their life savings, and asked FinCEN to compare losses in states that have banned crypto ATMs or imposed transaction limits. Foster and Committee Chairman French Hill (R-AR) observed that stablecoin issuer Circle declined to freeze stolen USDC stablecoins despite having the ability to do so, contrasting the action with banks' typical proactive responses to suspicious activity. "Both FinCEN and our sister agency, OFAC, under the GENIUS Act has a proposed rule that would apply to permitted payment stablecoin issuers, like the entity you noted, and place AML/CFT and sanctions obligations on them," Gacki said. Rep. Beatty warned that crypto and AI are making scams more sophisticated, and flagged the "advancement of crypto legislation that contains major illicit finance gaps."

5. On OCC Stablecoin Proposal, BPI and TCH Call for Coordination, Express Support for Supervision Standards

BPI filed two comment letters Friday on the OCC's proposed payment stablecoin requirements. 

• In a joint letter with The Clearing House Association, BPI expressed general support for the OCC's AML/CFT approach, while offering policy recommendations that would promote clarity in the framework.
• In a separate standalone letter, BPI reiterated suggestions it made to the OCC in response to its March 2026 proposal to establish requirements for stablecoin issuers under its jurisdiction. The standalone letter urged regulators to clarify consumer protection requirements for stablecoin issuers, recognize fraud risks more explicitly and strengthen liquidity safeguards.

In Case You Missed It

CFPB Nominee Highlights Fraud and Scams, Agency Structure

CFPB nominee Brian Johnson testified this week at a Senate Banking Committee nomination hearing. Here are a few highlights.

• Priorities. Johnson emphasized three priorities: protecting consumers, particularly from fraud and scams; promoting accountability by ensuring the CFPB acts within its statutory authority; and modernizing the agency's operations.
• Agency Structure. Johnson said his goal is not to eliminate the CFPB, which he noted is a "creature of statute." He declined to weigh in on staffing reductions under current Acting Director Russ Vought. Johnson said "properly structured and properly governed, the CFPB is capable of great good." He said: "I think there are deficiencies in the current legislative structure, and I have advocated in the past for changes to the CFPB's authority and structure to ensure that it's better able to execute its mission."
• Fraud and Scams. Johnson emphasized the necessity of protecting Americans from fraud and scams, particularly vulnerable senior citizens.

House Republicans Urge Fed to Expedite Bank M&A Process

House Financial Services Committee Republicans, led by Chairman French Hill (R-AR), urged the Federal Reserve to clear the pathway for bank merger approvals. In a letter this week to Vice Chair for Supervision Michelle Bowman, Hill and his colleagues suggested measures to streamline the review process, such as allowing more deal approvals without a Fed board vote. The lawmakers nonetheless expressed support for recent improvement in merger application processing times, which had been plagued by long delays in recent years. They recommended that the Fed review its "long-pending applications" to clear up logjams, identify applications that the Fed's Board of Governors could delegate to regional Federal Reserve banks for adjudication and improve application tracking and workflow analytics to reduce processing delays.

BPI Expresses Support for Main Street Capital Access Act

In a recent letter to House leaders, BPI endorsed the Main Street Capital Access Act, which would build on the bipartisan Economic Growth, Regulatory Relief, and Consumer Protection Act (S.2155) by better tailoring capital, liquidity and risk-management requirements to an institution's size and complexity, as well as updating regulatory tailoring asset thresholds to reflect economic growth. The bill would also "promote greater transparency and accountability throughout the bank supervisory regime, including by improving the MRA/MRIA process and the CAMELS rating system and ending the use of reputational risk by bank examiners," BPI noted in the letter. The bill passed the House this week on a strong bipartisan vote, with 56 Democrats supporting it.

Gould Pans 'Byzantine' Fed Master Account Framework

OCC Comptroller Jonathan Gould criticized the Federal Reserve's policies for master account access as an example of the central bank's "byzantine" ways, according to a report of Gould's remarks at the University of Wyoming this week by Capitol Account. "They prefer to maximize their discretion by never constraining themselves," Gould said of the Fed. At the OCC, he said, "we do strive for transparency - we're not trying to hide the ball." The Fed's 2022 guidance articulating the criteria for obtaining master accounts "does not in any way bind the Fed's ability to exercise infinite discretion," Gould said.

• Decision Makers. Gould also pointed to the division of labor in account decision making between the Federal Reserve Board and the Reserve Banks, saying the "very structure is designed to frustrate accountability." He said: "The Board of Governors in Washington, D.C. points a finger at the Reserve Bank, and the Reserve Bank points a finger back." Gould expressed some skepticism about perceived shifts in the Fed's interpretation of the law regarding master account access: "The Fed has discovered in recent years that national banks aren't necessarily automatically entitled to Federal Reserve services, which is interesting," he said. "They discovered that in their most recent reading of the Federal Reserve Act, which they didn't notice for the previous 95 years." Gould did express support for "very real changes afoot at the Federal Reserve," saying that "the vice chairman for supervision, Miki Bowman, is wonderful and has been doing excellent things, against a lot of odds and obstacles."
• Charter Context. Gould's remarks in Wyoming, a state known for granting crypto firms bank-like charters, came as the OCC has approved a slate of crypto and fintech firms' applications for national trust charters. BPI has called repeatedly for the OCC to provide more transparency on the limits of the national trust bank charter.
• Litigation Developments. Custodia Bank, a Wyoming crypto firm that sought and was denied master account access, sued the Fed over its decision and lost at both the district court and circuit court levels. The firm recently petitioned the Supreme Court to take up its case. Cases in other circuits, such as the Second Circuit, have also affirmed Fed discretion over account access.

The Crypto Ledger

Here's the latest in crypto.

• Democrats Call for Strengthening Ethics Provision in Clarity. Several Democratic senators this week said the latest Republican-proposed version of the Clarity Act released this week "falls short" of resolving their concerns about ethics for elected officials' crypto investments. "Key provisions including those addressing ethics for elected officials, consumer protection, illicit finance, conflicts of interest and market integrity must be strengthened," said a joint statement from seven Democratic senators. "We have been working in good faith with our Republican colleagues for the past year and will continue doing so to get this over the finish line."
• Watchdog Report: Criminal Networks Using Stablecoins to Evade Law Enforcement. Crime networks are using stablecoins and other crypto assets to evade detection and arrest, with stablecoin uptake increasing in the last year, according to a recent report by the Financial Action Task Force, a watchdog organization. Crypto-enabled crime has become more "complex and interconnected" during that time, FATF said, noting "significant and ongoing challenges" in detecting and stemming illicit finance flows coming from scam compounds and fraud networks.

Traversing the Pond

Here's the latest in international banking policy.

• EU Seeks Balance on Output Floor. The European Union will seek to "balance the short-term needs" of its economy in implementing the output floor, a provision of the Basel capital package that sets a lower limit on the risk-weighted assets a bank calculates using internal models, according to comments by top EU financial services official Maria Luis Albuquerque. The European Commission's recent Communication on bank competitiveness noted plans to "[m]ake clear proposals regarding the output floor and its transitional arrangements on unrated corporates and mortgage lending on the competitiveness of EU banks, as well as its interaction with the other parts of the framework, including measures to properly balance resilience and the broader financing of the economy." European companies rely predominantly on bank financing and often lack external credit ratings, creating an obstacle for the output floor, Albuquerque noted in recent comments.
• UK's Burnham Names Healey as Chancellor. New UK Prime Minister Andy Burnham selected John Healey as Chancellor of the Exchequer. Healey, a longtime MP, served as defense secretary in the previous government and resigned that position last month. Healey would succeed outgoing Chancellor Rachel Reeves.

New Bank Reg 101 Module: How Are Banks Regulated for Anti-Money Laundering?

Under the Bank Secrecy Act, banks maintain comprehensive compliance programs based on five core pillars: internal controls, a designated compliance officer, ongoing staff training, independent audits and customer due diligence. These measures allow institutions to detect illicit finance, though regulatory examinations must evolve to prioritize actual risk mitigation over administrative paperwork. Get up to speed on AML and test your knowledge here.

Member News

BofA Promotes Theisen, Milsom to Digital, AI Roles

Bank of America has elevated two new executives to new roles, where they will shape the bank's approach to digital assets and artificial intelligence. Sonali Theisen will serve as head of Bank of America's global digital assets platform, overseeing the platform's design, development, scaling and governance, and Kevin Milsom will become head of platforms AI transformation.

Upcoming Events

• 7/29/2026: Federalist Society Event on Clarity Act and Master Accounts Featuring BPI's Paige Paridon