BPInsights: October 31, 2026

The 4 Key Questions for Agentic AI in Banking

Recent commentary on agentic AI's effects on banking misunderstands what is at stake and what is motivating banks to block AI agents, BPI's Greg Baer and Paige Pidano Paridon write in an American Banker op-ed this week. "Agentic AI in banking includes two major use cases," Baer and Paridon write. "One involves an agent accessing a customer's account to make payments or otherwise transact. A second involves an agent managing the customer's account - either maximizing yield by regularly sweeping funds from a deposit account to a higher-yielding product or reducing the customer's risk by moving uninsured deposits out of a struggling bank. These use cases raise four important questions that should not be conflated." To read more, click here.

Five Key Things

1. Your AI 'Agent' Doesn't Work for You

Legal Definition and Duties: The longstanding legal concept of agency means one person (the principal) authorizes another (the agent - for example, a lawyer or financial adviser) to act on the principal's behalf and subject to his control. The agent must:

• Be loyal.
• Avoid conflicts of interest.
• Protect confidential information.
• Act with care, competence and diligence.
• Follow instructions and stay within authority.
• Keep the principal informed.

Accountability - Or Not: An agent who breaches these duties can be liable for the resulting damages, a level of accountability that inspires trust in a human agent to act in the principal's interest. Users of AI agents may expect the same of those "agents," but making that assumption could put the user at serious risk. Despite its name, an AI "agent" has none of the obligations of a true agent. We asked one to be sure.

2. Binance Breached in Largest Crypto Hack Ever

Hackers drained up to $6.3 billion from crypto exchange Binance this week in the largest crypto hack on record. "The incident at the world's largest crypto exchange highlights how vulnerabilities can extend even to the biggest players," Bloomberg reported. The exchange, which suspended withdrawals as of early Friday morning, said it will make all losses whole. The hack may involve an engineer's compromised computer, according to the company, and the hackers are suspected to be linked to North Korea. The breach reignites concerns about security risks and recourse - or lack thereof - when crypto platforms are hacked and investors lose coins. Bitcoin prices slumped in the wake of the attack.

3. Rhode Island AG Sues Meta Over Fraudulent Ads

Rhode Island Attorney General Peter Neronha recently filed a lawsuit against Meta, accusing the social media company of failing to prevent fraudulent ads on its platforms, "despite representing to the public that it engages in sophisticated efforts to prevent such ads." Rhode Island is the first state to file such a lawsuit against Meta on these grounds, according to a press release from Neronha's office. The state alleges that Meta continues to allow scam ads because "they generate substantial revenue," despite knowing the harm they cause to vulnerable consumers. The lawsuit follows investigative reporting from Reuters that Meta projected about 10 percent of its annual ad revenue in 2024 would come from scam ads.

4. To Stop Scams at the Source, U.S. Policymakers Are Rightly Looking Upstream

Fraud and scams are a national emergency, sapping billions of dollars from Americans annually. The FTC estimates that the cost of fraud to consumers in 2025 may have been as high as $261.5 billion. And bank impersonation scams are particularly pernicious because they exploit consumers' trust in their financial institution. This year, Congress and federal regulators have increasingly targeted this problem at its source, seeking to hold telecom and social media companies accountable for the scams that spread on their networks. Here is an overview of key recent government actions.

5. Eighth Circuit Vacates Debit Interchange Fee Cap

The U.S. Court of Appeals for the Eighth Circuit on Monday affirmed a lower court ruling invalidating the Federal Reserve's debit interchange fee cap. The case, Corner Post v. Board of Governors of the Federal Reserve System, centers on Regulation II, the Board's regulation implementing the Durbin Amendment, a provision of federal law requiring the Fed to establish standards for assessing whether the amount of any debit interchange fee is reasonable and proportional to the cost incurred by the issuer with respect to the transaction. The Fed's rule caps interchange fees at 21 cents, plus 0.05% of the transaction's value to account for fraud losses with an additional cent available to issuers meeting specified fraud-prevention standards. The plaintiffs, led by a North Dakota truck stop, accuse the Fed of using impermissible costs in calculating the debit interchange fee cap. The Eighth Circuit decision vacates the existing 21-cent cap in the rule and remands to the Federal Reserve to establish a "fee structure that reflects the statute Congress wrote." BPI filed a motion to intervene in the case in support of the rule, but the motion was denied.

• BPI's View. BPI's amicus brief in support of the rule contends that the statute requires the Fed to consider all costs related to processing debit transactions, a view that diverges from the Fed's, which is that the Fed must consider certain costs and may consider others, but is not required to consider all costs. The circuit court did not address this argument in its ruling.
• Split Circuits. The Eighth Circuit decision diverges from the D.C. Circuit court, which upheld Regulation II in a 2014 decision.
• Other Case Under Consideration. The Corner Post case is one of two key cases in which merchants have challenged the Fed's debit interchange regulations - the other case, Linney's Pizza v. Federal Reserve Board, is being considered by the Sixth Circuit.
• Next Steps. The Fed could file a petition for rehearing en banc within 45 days of the decision. It could also petition for Supreme Court consideration of the case.

In Case You Missed It

The Ledger

Here's the latest in digital assets.

• Ripple Gets Final OCC Approval for Trust Bank. Crypto firm Ripple received final approval from the OCC to establish a national trust bank, marking the latest development in a series of fintech and crypto bids for such charters. Ripple received conditional approval for the charter last December. The institution will be authorized to manage reserves backing the company's stablecoin and provide fiduciary digital asset custody services, according to Ripple.
• Alleged Crypto Scam Mastermind Extradited to U.S. Zheng Zhao, a Chinese citizen accused of conspiring to launder $37 million for an international crypto scam network, has been extradited to California from the Netherlands, according to the U.S. Department of Justice this week. Zhao and his co-conspirators are charged with conspiring to commit money laundering in connection with a "pig butchering" scheme targeting both American and foreign victims. The cryptocurrency Tether played a key role in the laundering effort, according to the complaint.

Traversing the Pond

Here's the latest in international banking policy.

• Lagarde Announces Early Departure. ECB President Christine Lagarde announced this week that she plans to depart her position in February 2027. Her term was due to end in October 2027. Candidates for her replacement include Dutch central banker Klaas Knot and Spain's Pablo Hernandez de Cos.
• UK Bank Tax Hike. The UK Government announced a temporary increase in the Bank Corporation Tax Surcharge from 3% to 6% for 15 months, from Jan. 1, 2027 to March 31, 2028. The surcharge applies to banking profits above a £100 million allowance and is paid on top of the standard 25% corporation tax rate. Banks also remain subject to a separate Bank Levy and as well as the broader taxes also borne by other large employers and businesses. Bloomberg reported that this hike is less steep than the 8 percent level that some observers expected. The temporary nature of the surcharge increase is intended to limit its impact on UK competitiveness, although it adds to an already significant overall tax burden on the banking sector.
• Swiss Panel to Debate UBS Capital Requirements in November. Switzerland's Economic Affairs and Taxation Committee, a panel of its lower house of lawmakers, will deliberate on proposed capital requirements for UBS on Nov. 23 and 24, according to Bloomberg this week. The capital treatment of the country's largest bank has been a subject of debate for years. The bank says the proposed capital increase would render it globally uncompetitive.

Member News

CIBC Expands Support for Skilled Trades in Canada

CIBC this week announced new initiatives with the Canadian Apprenticeship Forum and Castle Building Centres Group Ltd. to advance support for apprentices, skilled trades professionals and business owners across Canada. These initiatives will expand access to specialized banking offers, financial literacy resources and scholarship support for the skilled trades community, the bank said.

Upcoming Events

• 11/17/2026-11/18/2026: The Clearing House Annual Conference
• 12/8/2026-12/9/2026: FOMC meeting