On April 8, the Office of the Comptroller of the Currency (OCC) officially notified Congress of a significant information security incident involving its email system. This notification, mandated by the Federal Information Security Modernization Act, follows the discovery of unauthorized access to OCC emails and attachments that included highly sensitive information related to the financial condition of federally regulated financial institutions.
Guest contributors: Ashley Harris, Thomas Scott, and Isabelle Corbett Sterling, BakerHostetler
This is the final article in our three-part series focused on a key question: as bank-fintech partnerships continue to play a vital role in driving financial services, how does the industry make this system safer and better?
In this final part of our series, we propose a DLT-based account ledgering model designed to prevent failures like Synapse while offering broader benefits. Previously, we examined Synapse’s collapse, the misplaced trust in its ledgers, and potential regulatory responses,[1] including concerns about the Federal Deposit Insurance Corporation’s (FDIC) proposed recordkeeping rule (Records NPR).[2]
James Stevens, co-leader of Troutman Pepper Locke’s Financial Services Industry Group, was quoted in the April 7, 2025 Payments Dive article, “Stripe Seeks Georgia Special Banking Charter.”
On March 28, the Federal Reserve Board, the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) (together, the federal banking agencies) announced their intent to rescind the 2023 Community Reinvestment Act (CRA) final rule and reinstate the previous CRA framework. This decision comes in light of pending litigation in the Fifth Circuit by various banking trade associations contesting the rules by alleging regulatory overreach. The agencies stated they will continue to work together to promote a consistent regulatory approach to implementation of the CRA.
Last Friday, the Federal Deposit Insurance Corporation (FDIC) announced the rescission of Financial Institution Letter (FIL-16-2022) and issued new guidance clarifying the process for FDIC-supervised institutions to engage in crypto-related activities. The new Financial Institution Letter (FIL-7-2025) represents a 180 degree turn from the prior Chairman’s position, which required prior notification and relevant information by banks seeking to engage in crypto-related activities.
On March 20, the Office of the Comptroller of the Currency (OCC) announced that it will no longer examine its regulated institutions for reputation risk. According to the OCC’s “Categories of Risk,” reputation risk is the risk to earnings or capital arising from negative public opinion, which can affect an institution’s ability to establish new relationships or services or to continue servicing existing relationships. The decision to stop examining banks for reputation risk comes in the wake of the introduction of the Financial Integrity and Regulation Management (FIRM) Act, which aimed to eliminate reputational risk as a component of the supervision of depository institutions.
On March 17, the Office of the Comptroller of the Currency (OCC) announced that it has granted conditional approval for SmartBiz Loans to transform the business model of CenTrust Bank, N.A., located in Northbrook, Illinois. This approval follows SmartBiz Loans’ acquisition of CenTrust Bank, N.A., which has since been renamed SmartBiz Bank, N.A. The approval allows SmartBiz Bank, N.A. to expand its small business lending activities on a nationwide scale.
Alex Barrage, a partner in Troutman Pepper Locke’s Financial Services Industry Group, was quoted in the March 13, 2025 American Banker article, “Banks Are Pushing Back Against Stablecoin Legislation.”
On March 7, the Office of the Comptroller of the Currency (OCC) issued a significant update regarding the involvement of national banks and federal savings associations in cryptocurrency activities. Interpretive Letter 1183 reaffirms the permissibility of various crypto-asset activities and aims to streamline the regulatory process for banks engaging in these activities.
Troutman Pepper Locke advised Performance Trust Capital Partners, LLC in the successful completion of Chesapeake Financial Shares, Inc.’s private placement of $25 million in fixed-to-floating rate subordinated notes. The offering, which was significantly oversubscribed due to robust investor demand, will provide Chesapeake Financial Shares, Inc. with the capital needed to pursue growth opportunities and strengthen its balance sheet. For more information, read the press release.