BPInsights: June 19, 2026

Reduce Overlaps, Prevent Uncertainty: Basel Comments Roundup

On Thursday, BPI filed (or co-signed) three comment letters in response to pending capital proposals from the federal banking agencies.

Basel Proposal. BPI led a joint trades letter on the Basel proposal alongside the American Bankers Association, Financial Services Forum, Consumer Bankers Association and U.S. Chamber of Commerce. The trades emphasized that the current proposal improves upon the 2023 version, but important changes are needed to eliminate overlapping charges in the framework and better align capital charges with risk. Those changes include:

• Mitigating overlaps between stress testing and Basel by applying a uniform 12% business indicator coefficient.
• Resolving overcalibration in the market and credit valuation adjustment frameworks.
• Retaining the current definition of "commitment" and "unconditionally cancelable" to prevent uncertainty that could harm business lending.

The trades also highlighted the big-picture implications:

• The 2023 Basel proposal garnered bipartisan, widespread opposition, with 97 percent of commenters objecting or expressing major concern.
• Overly high capital requirements harm economic growth.

GSIB Surcharge. BPI joined a separate comment letter led by the Financial Services Forum responding to proposed changes to the GSIB surcharge. The Federal Reserve's methodology (known as "method 2") to assign each Global Systemically Important Bank a risk-based capital surcharge is flawed, failing to account for over a decade of economic growth since its adoption. This results in surcharges that overstate the systemic risk of GSIBs, imposing costs on credit availability; the ability of large banks to provide essential liquidity and loans to the economy depends on efficiently calibrated capital requirements.

The letter recognizes the Fed's commendable effort to address the methodological flaws, but urges that:

• The adjustments fully reflect the inflation in GSIB scores since the original calibration period.
• The benefits of the FRB's recalibration efforts not be delayed by continued application of a flawed methodology.
• Any revisions to the indicators provide meaningful benefit to measuring or reducing systemic risk.

Standardized Approach. BPI co-led an additional comment letter with the ABA, joined by the U.S. Chamber and CBA on proposed changes to the standardized approach, one of two capital stacks from which large banks can choose.

• Context. The standardized approach sets capital requirements based on standardized risk weights across banks other than those who would be mandatorily subject to the proposed Basel-based Expanded Risk-based Approach (or smaller banks who opt into the Community Bank Leverage Ratio framework).
• Recommendations. The letter offers recommendations to improve the calibration and risk sensitivity of the proposed revised standardized approach. "In general, we appreciate the detailed explanations and impact analysis provided in the proposal, which have enabled us to more effectively evaluate the proposal and provide the recommendations in this letter," the trades wrote. "However, this letter also discusses issues arising from the proposed revisions to the definitions of 'commitment,' 'unconditionally cancelable,' 'traditional securitization,' and 'synthetic securitization,' which we strongly urge the agencies not to finalize in light of the ambiguity these proposed changes would create and the unassessed-and unassessable-effect they would have on firms' capital requirements. Apart from these changes, we encourage the agencies to finalize the proposal expeditiously, so firms and the broader economy can benefit from the improved risk sensitivity in the revised standardized approach."

Five Key Things

1. In First FOMC Press Conference, Warsh Previews Balance-Sheet Task Force

In his inaugural post-FOMC meeting press conference this week, Federal Reserve Chair Kevin Warsh announced that he will appoint a task force to examine the central bank's $6.7 trillion balance sheet. The task force, one of five task forces announced this week, will "review the benefits and risks of the current ample reserves regime and the composition of the balance sheet," Warsh said during the press conference on Wednesday. The move marks a first step in Warsh's effort to rein in the balance sheet, which has ballooned in recent years amid COVID stimulus and quantitative easing.

2. Closing the Illicit Finance Gaps in the Clarity Act

The Clarity Act leaves significant gaps in illicit finance oversight across the digital asset ecosystem, including for DeFi providers, mixers and unhosted wallets.

• The bill would only apply anti-money laundering obligations to certain digital commodity brokers, dealers and exchanges, leaving other digital asset service providers free to operate outside regulatory boundaries.

The bill therefore creates a lighter-touch AML regime, which could make crypto attractive to criminals looking to evade law enforcement or national security scrutiny.

The legislation fails to grant clear authority to the Treasury Department to sanction or regulate mixers, tumblers and other firms that facilitate money laundering.

The Gaps. To close the gaps in the framework, Congress should make the following changes:

• The Clarity Act should subject all DASPs and DeFi to the Bank Secrecy Act and require AML/CFT and sanctions compliance.
• The Clarity Act should authorize the Treasury to sanction or, at a minimum, regulate mixers, tumblers and other blockchain applications that illicit actors use to facilitate money laundering.
• The Clarity Act should apply an economic benefit test and eliminate proposed legislative loopholes, clarifying that any entity benefiting from the ongoing operation of a decentralized finance protocol is not treated as a non-controlling developer or provider. Any party that is operating the service and deriving economic benefit from that service should be considered a financial institution, not publishing software for free use.

Bottom Line. This bill is not innovation-friendly; it is illicit finance-friendly. If Congress wants an effective market structure framework, it must close these gaps. Policymakers can support innovation without jeopardizing U.S. national security.

3. 'Authorized Push Payment' Fraud Spikes in UK

Authorized push payment fraud - in which victims are scammed into sending money - rose sharply in the UK in 2025, increasing 19 percent, according to a new report from UK Finance, an industry association. The report highlights £1.28 billion in payment fraud losses last year, a 4 percent increase year over year.

• Social Media and Telecom. Social media platforms and telecom networks are key vectors for authorized push payment fraud. Almost two thirds (66 percent) of such fraud cases start online, according to the report. UK Finance calls for "stronger, enforceable responsibilities to be placed on companies in these sectors," such as proactive fraud prevention obligations on high-risk platforms and requiring online marketplaces to verify sellers and use secure payment mechanisms. Tech and telecom firms should also be required to contribute financially, as well as sharing expertise, intelligence and capabilities to support proactive fraud prevention, the organization said. "[M]ost of the fraudulent activity starts outside the banking sector," the report said. "Key to tackling and ultimately reducing losses and the impact on consumers is greater understanding on where and how fraud and scams originate."
• Deeper Dive. The report offers deeper insights into authorized push payment fraud, breaking it down into eight types and two broader subcategories: malicious payee (purchase scam, investment scam, romance scam and advance fee scam) and malicious redirection (invoice and mandate scam, CEO fraud, impersonation: police/bank staff and impersonation: other).
• Reimbursement Rule. Reuters reported this week that the rise in authorized push payment fraud "coincide[s] with a review of rules introduced in October 2024 that require banks and payments firms to reimburse victims of such fraud up to £85,000," adding that "The UK remains the only country to mandate reimbursement for ⁠APP fraud."

4. The Crypto Ledger

Here's the latest in crypto.

• Lummis, Senators Urge Treasury to Preserve State Authority in Stablecoin Oversight. Responding to a Treasury Department proposal laying the groundwork for determining when a state-level stablecoin regulatory regime is "substantially similar" to the federal regulatory framework, as required under the GENIUS Act, a group of senators led by Sen. Cynthia Lummis (R-WY) advised Treasury that this framework should be established "in a manner that preserves and promotes State participation" in supervising state payment stablecoin issuers. The senators urged "Treasury to promptly issue written procedural guidance clarifying the application, review, and certification process for State regimes" and to provide states with the ability to seek certification of their payment stablecoin regimes at any time. BPI emphasized in its recent comment letter responding to the proposal that state-level oversight of payment stablecoins must be as robust as the federal regulatory regime.
• Banking Agencies Propose Stablecoin Customer ID Program Requirements. The Federal Reserve, FinCEN, OCC, FDIC and NCUA jointly requested comment on Thursday on a proposal to require certain payment stablecoin issuers to maintain an effective customer identification program. The proposal "would introduce requirements for these stablecoin issuers that are comparable to customer identification program requirements for banks and credit unions," the Fed said in a press release.
• Binance Set to Lose Permission to Serve EU Clients. Binance will lose permission starting next month to serve EU customers, Reuters reported this week. The crypto exchange had applied to Greece's capital markets regulator for permission to operate across the EU, in line with the Markets in Crypto Assets (MiCA) regulation, which requires crypto companies to apply with a single national regulator in order to access the entire EU market. A denial by the Greek regulator would mean Binance is barred from serving customers in the whole bloc.
• SBF Conviction Upheld. The conviction of FTX co-founder Sam Bankman-Fried was upheld by a federal appeals court this week. Bankman-Fried, who was convicted in 2023 of fraud and conspiracy and sentenced to 25 years in prison, had sought to overturn his conviction. He has also recently applied for a presidential pardon.

5. GAO Urges FDIC To Coordinate With Other Agencies on Crypto Oversight, Bolster Examiner Independence

The Government Accountability Office urged FDIC Chairman Travis Hill to implement key recommendations it made last year, including requiring examiners to rotate their assignments and coordinate with other regulatory agencies in mitigating crypto risks. The GAO mentioned such concerns - first flagged to the FDIC last year - in a recent letter. The GAO said its 2024 review found that the FDIC did not require certain examiners to rotate their assignments, potentially compromising their independence. The agency also told the FDIC that regulators should establish concrete ways to coordinate in digital assets oversight; a fragmented regulatory approach could create vulnerabilities. According to the GAO's letter, the FDIC has implemented 80% of the watchdog's recommendations in the last five years, but the agency still has six open recommendations, three of which are deemed priority.

In Case You Missed It

Traversing the Pond

Here's the latest in international banking policy.

• EBA Suggests Relying More on Banks in Pillar 2 Buffers. The European Banking Authority suggested that regulators should rely more on banks to calculate the capital cushion they need on top of their minimum capital requirements. The EBA suggested a new approach to the Pillar 2 guidance, a non-binding measure that determines an extra capital layer when a bank's management buffer is too thin under stress or its capital planning is not sufficiently conservative. "The new approach would emphasize the responsibility of banks," according to Bloomberg, citing the EBA. "It could also encourage banks to dip into the non-binding buffer as intended in times of stress, the authority said."
• Brexit and Capital Markets Stagnation. Brexit is partly responsible for the EU's failure to integrate its capital markets, European Investment Bank President Nadia Calviño said this week. "We shouldn't underestimate the importance of Brexit," Calviño told Bloomberg Television on Wednesday. "London was Europe's financial market, and after Brexit we have divided our forces."

Member News

Truist Names Lyons as Next CEO

Truist this week announced Michael P. Lyons as its next president and CEO, starting Sept. 1, 2026. Lyons will succeed Bill Rogers, who will become executive chair on Lyons' start date. Previously, Lyons served as CEO of Fiserv, a financial technology core provider. Earlier he was president of PNC Financial Services Group.

Upcoming Events

• 6/24/2026: Fed Releases Stress Test Results
• 6/24/2026: HFSC Hearing: Future of Payments: Promoting Innovation and Fair Markets