BPInsights: September 12, 2026

Who Is Most Affected by Fraud? A New Analysis Sheds Light

Understanding the characteristics of fraud victims is crucial to making policy that combats fraud and protects consumers. A new BPI post, the second in a three-part series summarizing recent BPI research using the CFPB's Making Ends Meet Survey about consumer financial well-being, explains the demographic and personality attributes that render certain consumers particularly vulnerable to fraud and scams.

• Income and age are important factors, but personality and behavioral traits are also key. People with lower or more variable incomes are more likely to experience fraud, but lower levels of patience, a recent history of gambling and lower satisfaction with one's financial situation also increase susceptibility.
• The analysis suggests that financially stressed consumers are more vulnerable to fraud and scams that promise improvement in their financial circumstances.
• The findings also suggest systematic differences in consumers' propensity to report their experiences, often based on traits that aren't easily observed. Differences in reporting tendencies are relevant for policymakers who rely on reports to learn about how fraud and scams affect Americans.

Learn More. The previous post in this series discussed the incidence, types, and reporting propensity of fraud and scams. This post focuses on the part of the research that relates consumers' characteristics to their likelihood of experiencing fraud or a scam, their financial exposure or loss and their propensity to report an incident.

Five Key Things

1. Senators Release Updated Text of Clarity Act

Sen. Cynthia Lummis (R-WY) released an updated draft of the Clarity Act this week ahead of an expected cloture vote on Sept. 15. The more than 600-page legislative text would require certain DeFi projects to register with the CFTC and meet Bank Secrecy Act requirements if they have certain characteristics on whether they are truly decentralized or not. The updated bill would direct the CFTC to write rules for such "non-decentralized finance trading protocols" in conjunction with the Treasury Department and the SEC. The updated text notably did not make changes to the sections of the bill that have been most debated, including ethics, the Blockchain Regulatory Certainty Act and stablecoin yield.

2. Bowman: How to Make Life Hard for Small Banks

In a Wall Street Journal op-ed this week, Federal Reserve Vice Chair for Supervision Michelle Bowman emphasized the disproportionate cost of the Current Expected Credit Loss accounting standard for community banks. CECL, which requires banks to forecast and reserve for all expected credit losses over the life of a loan at the moment of origination, "has failed community banks," Bowman wrote. The previous "incurred-loss method" for smaller institutions "was straightforward and nearly cost-free, and it permitted regulators to use capital requirements to provide adequate buffers," she explained. "This approach was more transparent, stable and aligned with how credit risk actually works. It worked for decades without requiring data manipulation or imposing disproportionate benefits." She called for the Financial Accounting Standards Board to allow smaller banks to return to this methodology.

3. Banking Agencies Propose Updated Third-Party Risk Management Guidance

The OCC, Federal Reserve, FDIC and NCUA on Friday proposed new guidance on banks' third-party risk management. This updated guidance would replace existing guidance and "seeks to assist banking organizations in better aligning and tailoring these practices in relation to reasonably assessed risk levels specific to each of their third-party relationships." The guidance pertains to banks' management of the risks associated with third-party vendors, such as IT providers. Federal Reserve Governor Michael Barr voted against the third-party risk management guidance, the sole dissenting vote. At the same time, the agencies issued additional guidance covering community banks.

4. Charter Highlights: What's New

Here's the latest in charter developments.

• Revolut, a UK fintech company that operates in more than 39 countries, received conditional OCC approval for a full-service national bank charter.
• Money transfer company Wise's national trust bank charter application was denied in late July by the OCC, which cited compliance and AML concerns.
• The OCC returned the application of crypto firm Zerohash for a national trust bank charter. The agency did not cite a specific reason for the decision; its website states that "[t]he OCC may return a filing as materially deficient where it lacks sufficient information for the OCC to make a determination under the applicable statutory or regulatory criteria." Zerohash later reapplied and the only change to the application appears to be that the firm is now characterizing one of the activities as "fiduciary."
• Block, the parent company of Square and Cash App run by former Twitter CEO Jack Dorsey, applied for a national trust bank charter this week. The firm says the resulting institution, if approved, would provide "custody and related fiduciary services, including for bitcoin and stablecoins."
• OpenReserve, a blockchain firm backed by venture capital group Andreessen Horowitz, received preliminary conditional OCC approval for a full-service national bank charter. The firm would offer tokenized deposits and digital asset custody, with a planned subsidiary for stablecoin issuance.
• The OCC rejected an application by Dutch fintech Bunq for a national bank charter. The regulator cited "significant supervisory and compliance concerns" and said the application failed to explain clearly how Bunq would be capitalized in the U.S. The OCC also raised concerns about Bunq management's experience with unsecured credit cards and the bank's ability to turn a profit in a competitive U.S. market.

5. Fed AML Proposal Leaves Room for Inconsistent Supervision

The Federal Reserve's anti-money laundering and countering the financing of terrorism program proposal diverges from its counterpart proposals from the other banking agencies, promoting inconsistency in AML/CFT examination, the Bank Policy Institute and The Clearing House Association said in a comment letter this week. While significant parts of the Fed's proposal align with constructive measures in the other agencies' proposals, the Fed leaves a crucial gap by failing to give Treasury's Financial Crimes Enforcement Network a coordinating role in AML/CFT examination.

"The banking agencies, including the Federal Reserve, are making meaningful reforms to AML/CFT supervision and enforcement. Redirecting examiners' focus to the most material risks will strengthen the integrity of the U.S. financial system amid a heightened geopolitical threat environment. While much of the Fed's proposal aligns with these pragmatic reforms, the decision to abrogate FinCEN's central role in AML examination would enable conflicting examiner mandates and ultimately undermine reform efforts," BPI said in a statement.

In Case You Missed It

Summer Lookback

If you're wondering whether BPI was in August recess, here's a snapshot of what we've been working on since the last edition of BPInsights.

• Supervision Shifts. The federal banking agencies made headway in August on key changes to refocus supervision on material risks.
  • The FDIC and OCC issued a final rule on unsafe and unsound practices and Matters Requiring Attention. The rule codifies the definition of the bedrock concept of unsafe and unsound practices, enhancing the clarity and objectivity of bank supervision. It also creates a uniform standard for when agencies may issue an MRA, a severe supervisory flag calling for banks to remedy a certain deficiency.
  • BPI responded to the banking agencies' proposed changes to the CAMELS rating framework. The proposed revisions, including eliminating the outsize influence of the Management rating on overall composite ratings, move in the right direction, but "additional reforms would improve the framework's objectivity and accuracy," BPI said in a statement. BPI's comment letter on the proposal recommended eliminating the Management component or replacing it with a Material Operational Risks and Internal Controls component; linking each financial component to objective evaluation factors; removing overlapping evaluation factors among components; and establishing clearer standards for the composite rating. To learn more about CAMELS changes, read BPI's explainer here.
• Resolution. BPI commented on two FDIC proposals: one to revise the assessments framework, and one to amend resolution planning requirements. BPI expressed significant concerns about the assessment proposal's approach for evaluating resolution readiness, which would pose cybersecurity and privacy risks.
• Fraud and Scams. BPI published an infographic explaining the pathway of a bank impersonation scam through the telecom network, and how recent Federal Communications Commission proposals could prevent such scams from taking root.
• Stablecoins. BPI and The Clearing House Association commented on a proposal by Treasury's Financial Crimes Enforcement Network and the federal banking agencies on customer ID requirements for stablecoin issuers. Regulators should apply such requirements to stablecoin secondary market participants, the associations urged.
• Bolstering Defenses. Third-party service providers may be weak links in the banking ecosystem, and regulators should sharpen their exam focus on security and resilience at third parties critical to the financial system, BPI said in a recent blog post.
• Member Highlights. Citigroup CEO Jane Fraser emphasized the strength of the American financial system in a recent TIME op-ed titled "Why the World Is Still Investing in America." "Perhaps the most distinctive advantage of the American model is not that it avoids failure, but its ability to adapt, reform, and continue creating opportunity," Fraser wrote. "The same country that built the world's deepest capital markets has repeatedly renewed them through innovation, competition and change. American companies of all sizes have confronted a number of shocks in recent years, yet they continue to adapt, innovate and grow." In addition, TD Bank recently highlighted its total impact on the U.S. economy, where it supports over 100,000 jobs, contributes more than $20 billion to GDP and serves more than 10 million clients.

The Crypto Ledger

Here's the latest in crypto.

• Iran Taps Crypto to Evade Sanctions. Iran is turning to crypto to avoid sanctions amid the U.S.-Iran conflict, which has further isolated the country's economy from the global financial system, the Financial Times reported. Tether has proved a particularly useful tool for Iranian sanctions evasion, according to the FT.
• Binance Asks Court to Toss Terrorism Suit. Binance and former CEO Changpeng Zhao urged a federal judge to dismiss a lawsuit that accused the company of aiding and abetting terrorist attacks.
• Law Enforcement Group Flips to 'Neutral' on Clarity. The National Sheriffs' Association has switched from opposing the Clarity Act to a "neutral" stance on the bill, according to POLITICO this week. The reason for the change is not clear, the article says, given there have not been policy concessions made to address law enforcement concerns. The group previously expressed strong opposition to a provision that would shield crypto software developers from prosecution for illicit activities on the platforms they create, which remained unchanged in the latest version of the bill released on Thursday. The Senate plans to vote on the Clarity Act on Sept. 15. In a Newsmax op-ed this week, Sen. Cynthia Lummis (R-WY) this week urged senators to pass the bill.

Traversing the Pond

Here's the latest in international banking policy.

• G20 Chair Issues Statement After Summit. The G20 issued a Chair's Statement - agreed by all member nations except China - after the group of finance ministers convened in Asheville, North Carolina. The statement characterized the global economy as "resilient" despite geopolitical conflicts and inflation; highlighted U.S. efforts to promote financial literacy; and called for financial regulatory modernization and finishing Basel III implementation. The group flagged an upcoming Financial Stability Board report on "sound practices for AI adoption" and FSB work on cross-border stablecoin arrangements. The statement recognized the growth potential associated with digital asset innovation, while acknowledging financial stability risk. On illicit finance, the statement reaffirmed Financial Action Task Force standards, flagged gaps in supervision of digital assets and expressed concern about AI-enabled fraud and scam compounds.
• Draghi's EU Revival Goals, 2 Years Later. Former ECB President Mario Draghi warned two years ago that the EU faced economic languishing if the bloc did not make changes to support competitiveness. However, a European think tank reports that only 15.7 percent of Draghi's recommendations have been implemented fully as of July 2026. "The limited progress comes despite repeated pledges by EU leaders and European Commission president Ursula von der Leyen to put economic revival at the centre of the bloc's agenda," the Financial Times reported. Recommended reforms include capital markets integration and removing barriers to cross-border commerce.
• UK Takes Aim at Russian Sanctions Skirting. The UK ramped up pressure recently on Russian sanctions evasion, doubling penalties for sanctions breaches. The UK government is "leaving those aiding [Vladimir Putin's] illegal war with nowhere to hide," said Chancellor of the Exchequer John Healey.

How Well Do Central Bank Financial Stability Reports Predict Risk? A Follow-Up AI Analysis

In an addendum to a recent post that used AI to analyze the usefulness of central bank financial stability reports, the authors apply the same analysis to the Swiss National Bank, the central bank of Switzerland. The SNB's financial stability reports showed similarly limited usefulness to those produced by its peers in the U.S., UK and EU. The reports uncovered no novel risks that were eventually realized, identified risks (and as a result raised capital requirements) that did not materialize and failed to identify significant risks that did materialize, such as those leading up to the 2008-09 Global Financial Crisis.

• Bottom Line. Since 2003, when the SNB began publishing such reports, there have been no examples of successful forecasts of novel risks; multiple forecasts of risks that did not materialize and therefore imposed an unnecessary tax on lending through higher capital requirements; and substantial risk identification misses leading up to the financial crisis. In other words, the reports demonstrate little to no "regulatory alpha" - casting doubt on the reports' role in justifying capital increases.

Member News

BPI Members Among Firms Collaborating on New Stablecoin

A consortium of banks and other financial firms is banding together to launch a stablecoin. The consortium includes 21 firms such as Bank of America, Capital One, Citigroup, Goldman Sachs, PNC, Scotiabank, TD Bank, Wells Fargo, Banco Santander, BBVA, Deutsche Bank and UBS. Read more here.

Upcoming Events

• 9/15/2026: Senate Expected Vote on Cloture - Clarity Act
• 9/15/2026: House Financial Services Committee hearing: "The Annual Testimony of the Secretary of the Treasury on the State of the International Financial System"
• 9/15/2026-9/16/2026: FOMC Meeting
• 9/16/2026: House Financial Services Committee Markup
• 9/18/2026: House Financial Services Committee Field Hearing: "Main Street Capital Access Act: Empowering Community Banks to Drive Economic Growth"
• 9/24/2026-9/25/2026: Philadelphia Fed 10^th Annual Fintech Conference, Featuring BPI CEO Greg Baer
• 10/13/2026-10/16/2026: DC Fintech Week