BPInsights: August 8, 2026

Senate Leaves for Recess, No Clarity Act Votes Until Fall

Late on Thursday evening it was reported that Senate Leadership had decided to delay any votes on the Clarity Act until the chamber returns from August recess.

As recess approached, Senate leadership faced limited time on the calendar and a number of competing priorities, including a nominations package, a continuing resolution to fund the government, a Russia sanctions bill, an Attorney General confirmation and a reconciliation package.

The push to also include the Clarity Act in that list of pre-recess votes was reportedly hampered by a number of issues in the legislation that do not yet have bipartisan solutions.

A number of Republicans have reportedly raised concerns about how the current stablecoin yield provision could drive deposit flight from banks across the country, including Senators John Cornyn (R-TX), John Curtis (R-UT), Mike Rounds (R-SD), James Lankford (R-OK), Josh Hawley (R-MO), Susan Collins (R-ME) and Jerry Moran (R-KA).

Law enforcement concerns about how the bill would hamper their ability to stop and prosecute illicit finance have reportedly not been resolved and Democrats have reportedly raised concern that the law enforcement funding promised in the bill may not actually get appropriated.

A bipartisan ethics solution from Senators Ruben Gallego (D-AZ) and Thom Tillis (R-NC) that was shared with the administration last week, is reportedly still under discussion, but has not been agreed to by the White House.

The Wall Street Journal editorial board also weighed in on the bill, with editorials on August 4 and August 6 raising concerns with how the current bill addresses stablecoin yield, illicit finance and ethics, among other issues.

Five Key Things

1. Same Risks, Same Safeguards: Modernizing Illicit Finance Controls for Digital Assets

On Tuesday, Bank Policy Institute and The Clearing House filed a comment letter with the FDIC, the most recent in a series of comment letters to regulators regarding the importance of effective anti-money laundering, countering the financing of terrorism and sanctions programs for payment stablecoin issuers and the crypto ecosystem more broadly.

In a one-pager, BPI outlined where regulators are getting it right and where there are opportunities to strengthen the regime.

What's Right:

• Regulators rightly recognize the AML/CFT risks presented by stablecoin issuers and other players in the digital asset ecosystem.
• Some of the proposals have included formal cross-agency consultation requirements, but similar provisions should be included in all of the regulators' AML/CFT rules.
• Regulators are shifting priorities and incentives to focus on effectiveness rather than process, and those same positive shifts are showing up in proposals to address illicit finance in crypto.

What Should Change:

• The current proposals leave meaningful gaps in AML/CFT obligations in the secondary market for payment stablecoins and other digital assets.

2. FDIC Launches Independent Supervisory Appeals Office

Banks challenging FDIC supervisory findings will now have access to a new, more independent appeals process. This week, the FDIC formally launched its Office of Supervisory Appeals, creating a standalone structure to act as a final level of review for disputes over supervisory determinations. According to the FDIC, the new office will operate independently from supervisory staff, with reviewing officials subject to confidentiality and conflict-of-interest requirements.

Background. The framework stems from a multi-year effort to expand the due process rights of banks that choose to appeal supervisory determinations like examination ratings and Matters Requiring Attention. For the first time, reviewing officials include individuals recruited from outside the FDIC with relevant experience, including in banking.

Why It Matters. The change is part of a broader effort by banking regulators to increase transparency and accountability in supervision.

3. CFPB Open Banking Proposal Advances to White House Review

The CFPB has submitted its proposed open banking rule to the White House Office of Information and Regulatory Affairs for review, moving the agency closer to releasing a new framework implementing Section 1033 of the Dodd-Frank Act. The Biden-era open banking rule, issued in 2024, was challenged by BPI and the Kentucky Bankers Association, and has been subject to a court injunction while the CFPB has been working to revise the rule. According to reports, key issues under consideration include whether banks may charge fintechs and data aggregators for providing secure, reliable data access.

Background. The proposal comes amid ongoing debate over the future of consumer financial data sharing. Banks have advocated for greater flexibility to charge for data access and for shared data security obligations, while fintech companies have argued against permitting access fees. The CFPB has reportedly considered a framework that would allow a baseline level of data sharing at no cost while permitting fees above certain thresholds.

4. CFPB Gets New Acting Director as Vought Exits

Following the expiration of Russell Vought's tenure as acting director on Aug. 1, Mark Paoletta, the CFPB's chief legal officer and deputy director, has assumed the role of acting director of the CFPB while the Senate considers President Trump's nomination of Brian Johnson to lead the agency on a permanent basis.

Background. Vought served two 210-day terms as acting CFPB director, the maximum duration permitted under the Federal Vacancies Reform Act. Johnson, a banking executive and former CFPB deputy director during the first Trump administration, testified before the Senate Banking Committee last month. The committee has not yet voted on Johnson's nomination. Until a permanent director is confirmed, Paoletta is expected to oversee the agency's operations.

Other Transition News. Victoria Dorfman, currently the CFPB's chief legal adviser, has been selected to succeed Paoletta as general counsel while continuing in her existing advisory role.

5. The Crypto Ledger

Here's the latest in crypto.

• Coldcard Hack Drains More Than $100 Million in Bitcoin. Hackers have reportedly stolen more than $100 million in Bitcoin from thousands of cryptocurrency wallets after exploiting a software flaw in Coldcard devices, a popular form of "cold" wallet designed to keep digital assets offline. According to reports, more than 1,755 Bitcoin worth roughly $110 million were drained from approximately 5,000 wallets.
• Mastercard Completes BVNK Acquisition to Expand Stablecoin Payments Infrastructure. Mastercard completed its acquisition of digital asset infrastructure provider BVNK this week, aiming to strengthen its efforts to connect traditional payment networks with stablecoin and blockchain-based payment systems. BVNK provides technology that enables businesses to move, manage and convert value across both fiat and digital currencies. Mastercard said combining its global payments network with BVNK's on-chain infrastructure will help financial institutions, fintechs and enterprises scale stablecoin-based payment use cases while improving interoperability between traditional and digital payment rails.

In Case You Missed It

Traversing the Pond

Here's the latest in international banking policy.

• ECB Stress Test Highlights Geopolitical Risk Preparedness. On July 31, the European Central Bank published reverse stress test results examining how 110 euro area banks would respond to severe geopolitical shocks. The exercise required banks to develop their own scenarios that would result in a 300-basis-point decline in capital, helping supervisors evaluate how institutions assess vulnerabilities tied to geopolitical events. The ECB said banks generally demonstrated an ability to design scenarios tailored to their specific risk profiles, including military conflicts, trade disruptions, sanctions, cyberattacks and supply-chain shocks. The exercise also identified weaknesses in some firms' stress-testing capabilities, including the treatment of liquidity risks, the realism of mitigating actions and the integration of cyber and operational resilience considerations.
• Former ECB Official Calls for Focus on EU Banking Competitiveness and Integration. In a Financial Times opinion piece, Ignazio Angeloni, a former member of the ECB's Supervisory Board, applauds the European Commission's for prioritizing bank competitiveness and identifying market fragmentation as a major weakness in its recent report on competitiveness in the EU banking sector. Angeloni cautioned that the success of the strategy will depend on implementation, including reducing barriers to cross-border banking activity within the EU and strengthening integration between EU and UK financial markets, including closer regulatory cooperation and reduced barriers to financial services activity across jurisdictions.

Member News

Wells Fargo to Launch Tokenized Deposits for Corporate and Commercial Clients

Wells Fargo announced that it will launch tokenized deposits for select corporate and commercial clients this fall, enabling clients to move, program and settle funds on a 24/7 basis using blockchain technology. The initial rollout will support U.S. dollar and British pound transactions, with plans to expand to additional clients, countries and currencies throughout 2027. According to the bank, the capability will be integrated into its existing payments offering and will automatically route eligible payments through tokenized deposits when doing so can improve speed, timing and flexibility.

Upcoming Events

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