Headlines
- FDIC Releases Final Plan to Replace Supervision Appeals Review Committee
- Proposal Seeks to Clarify Authority of National Trust Banks to Offer Non-Fiduciary Services
- CFPB Withdraws Guidance on Credit Opportunities for Noncitizen Borrowers
- State Bank Regulators Petition OCC to Withdraw Proposals Affecting Escrow Accounts
- Other Developments: FDIC Signage and Penny Shortage
1. FDIC Releases Final Plan to Replace Supervision Appeals Review Committee
The FDIC has amended its Guidelines for Appeals of Material Supervisory Determinations (Guidelines) to replace the existing Supervision Appeals Review Committee (SARC) with an independent, standalone office to consider and decide supervisory appeals, to be known as the Office of Supervisory Appeals (Office). According to the FDIC’s January 22 announcement, banks may appeal a material supervisory determination to the Office after the appropriate Division Director’s review of a material supervisory determination. The FDIC stated that the Office will be staffed by officials “who have direct experience with the supervisory process, and may include former government officials, former bankers, and other former industry professionals.” The amended Guidelines will become effective once the Office becomes fully operational, although the FDIC has not yet outlined a timeframe for opening the Office. The FDIC stated that it would notify banks when the Office is operational. Click for a copy of the amended Guidelines.
Nutter Notes: The FDIC’s proposal to replace the SARC by reestablishing an Office of Supervisory Appeals as the final level of review of material supervisory determinations was first announced in July 2025. The final amendments to the Guidelines expand the definition of “material supervisory determination” to permit banks to appeal determinations by examiners as to compliance with informal enforcement actions, and determinations as to compliance with conditions imposed through the supervision or application processes. For example, an examiner’s evaluation of whether a bank has complied with an outstanding memorandum of understanding will become appealable under the amended Guidelines. However, the FDIC declined to expand the definition of material supervisory determinations further to cover decisions relating to resolution plans, which the FDIC found not to be supervisory in nature.
2. Proposal Seeks to Clarify Authority of National Trust Banks to Offer Non-Fiduciary Services
The OCC has issued a proposed rule that would interpret the authority of national banks limited to the operations of trust companies (national trust banks) to permit them to perform non-fiduciary activities in addition to their fiduciary activities. Specifically, the OCC’s January 8 proposed rule would change references in its rule related to chartering of national trust banks from “fiduciary activities” to “operations of a trust company and activities related thereto.” According to the OCC, the existing chartering rule could be mistakenly read to impose limits on the activities of national trust banks that are different than those articulated in the OCC’s statutory authorization. The OCC pointed out that under longstanding interpretation of its authority, the agency has chartered national trust banks that engage in activities that are not fiduciary. Public comments on the proposed rule are due by February 11. Click to access the proposed rule.
Nutter Notes: In its notice of proposed rulemaking, the OCC specifically mentioned custody and safekeeping activities as examples of the types of non-fiduciary activities authorized both for national banks and for national trust banks. The OCC’s proposed clarification that national trust banks, which are not permitted to take deposits, may offer custody and safekeeping services for digital assets would likely make the national trust bank charter more attractive to cryptocurrency firms and fintech companies seeking to expand their products and services. However, the proposed rule itself does not address specific non-fiduciary activities that are permissible for national trust banks or whether a national trust bank must perform some minimum fiduciary activity.
3. CFPB Withdraws Guidance on Credit Opportunities for Noncitizen Borrowers
The CFPB together with the U.S. Department of Justice (DOJ) announced that they have withdrawn 2023 guidance to lenders, including banks, on the implications of a lender’s consideration of an individual’s immigration status under the Equal Credit Opportunity Act (ECOA). In a joint statement issued on January 12, the agencies explained that they withdrew the 2023 guidance to avoid any conflict with ECOA and its implementing regulation, Regulation B. The 2023 guidance warned that banks and other lenders may not use immigration status to illegally discriminate against loan applicants. In withdrawing the 2023 guidance, the CFPB and DOJ clarified that lenders who have structured operations consistent with the 2023 guidance discussion of compliance risks “can continue to operate in that manner without penalty [that] consumers’ rights under ECOA are unchanged.” Click for a copy of the joint statement.
Nutter Notes: ECOA does allow lenders to consider immigration status when necessary to ascertain the lender’s rights or remedies related to repayment. The 2023 guidance cautioned lenders that “unnecessary or overbroad reliance on immigration status in the credit decisioning process, including when that reliance is based on bias, may” cause lenders to violate ECOA’s antidiscrimination provisions and may also result in violations of other laws, such as state anti-discrimination laws. The withdrawal of the 2023 guidance does not change lenders’ risk exposure for using immigration status to illegally discriminate against loan applicants. However, it may signal a change in federal supervisory priorities for ECOA compliance examination and enforcement decisions.
4. State Bank Regulators Petition OCC to Withdraw Proposals Affecting Escrow Accounts
State bank regulators have announced through the Conference of State Bank Supervisors (CSBS) their opposition to two proposed rules recently issued by the OCC affecting escrow accounts. The CSBS submitted a comment letter to the OCC on January 29 arguing that the OCC withdraw its proposed Preemption Determination: State Interest-on-Escrow Laws (“preemption determination”) and its proposed rule on real estate lending escrow accounts (“escrow rule”), both of which were issued on December 23, 2025. The CSBS argues that the escrow rule “manufactures a ‘new’ national bank power solely as a pretext for the corresponding preemption determination.” The CSBS raised the concern that, if finalized, the OCC’s proposals could deny home mortgage borrowers interest payments on their escrow accounts. Click to access the CSBS comment letter.
Nutter Notes: When it announced the proposed escrow rule, the OCC stated that it was necessary to “codify longstanding powers of national banks and federal savings associations to establish or maintain real estate lending escrow accounts and to exercise flexibility in making business judgment as to the terms and conditions of such accounts, including whether and to what extent to offer any compensation or to assess any fees related thereto.” The OCC described its companion preemption determination proposal as necessary to provide “clarity to banks and other stakeholders” that, in the view of the agency, federal law preempts state laws that eliminate the flexibility national banks and federal savings associations have to decide whether and to what extent to pay interest on real estate escrow accounts or assess fees in connection with such accounts.
5. Other Developments: FDIC Signage and Penny Shortage
- FDIC Approves Final Rule on Official Signs and Advertising Requirements
The FDIC has adopted a final rule to amend regulations governing the display of the FDIC official digital sign and non-deposit signage. The final rule released on January 22 revises requirements adopted in a 2023 final rule that established the FDIC official digital sign and required signage for ATMs and digital banking channels. Compliance with the final rule will be required by April 1, 2027. Click for a copy of the final rule.
Nutter Notes: According to the FDIC, the final rule simplifies compliance by focusing display requirements for the FDIC official digital sign and the non-deposit sign on the screens and pages where signage would be most relevant for consumers and would provide banks additional flexibility with respect to design choices for the FDIC official digital sign.
- Federal Reserve Resumes Accepting Pennies to Support Circulation for Commercial Activity
The Federal Reserve Financial Services (FRFS) announced that the Federal Reserve Banks resumed accepting pennies from banks and credit unions on January 14 at commercial coin distribution locations providing services under arrangements with the Federal Reserve that were previously suspended. Click for the FRFS’s announcement.
Nutter Notes: According to the FRFS, monitoring of the flow of penny deposits from financial institutions as these changes take effect will determine whether subsequent expansion of ordering options for pennies is possible, given that penny production has ended.
