April 2026 Financial Reporting, Governance, and Risk Management
Message from Sydney Garmong, partner, national office
The first quarter of 2026 is in the rearview mirror. Spring officially arrived on March 20, and we hope you are making summer plans to enjoy some time off. For those who participate in spring break, we hope that was enjoyable.
As expected in the evolution of digital assets, including more regulatory proposals, we decided this month warrants a new section, “From the federal agencies: Implementing the GENIUS Act.” I proposed to title the section “From the federal agencies: It’s GENIUS,” but I was overruled.
In addition to the Feb. 25, 2026, Office of the Comptroller of the Currency (OCC) proposal to establish regulatory requirements for entities that issue or engage in activities involving payment stablecoins, three more proposals were issued to implement the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act):
- The U.S. Department of the Treasury (Treasury) issued a proposal to establish broad-based principles for determining whether a state-level regulatory regime for payment stablecoin issuers is “substantially similar” to the federal framework.
- The Federal Deposit Insurance Corp. (FDIC) issued a proposal to establish requirements and standards for institutions seeking to issue payment stablecoins through subsidiaries.
- Treasury’s Financial Crimes Enforcement Network (FinCEN) and the Office of Foreign Assets Control (OFAC) issued a proposal to implement the GENIUS Act’s anti-money laundering and sanctions compliance program requirements.
Last month, Federal Reserve (Fed) Vice Chair for Supervision Michelle Bowman provided remarks on forthcoming proposed changes for capital to simplify the framework, reduce overlapping requirements, and better calibrate capital requirements to underlying risk. We now have three proposed rules open for comment (comments due June 18, 2026): two from the FDIC, Fed, and OCC and one from the Fed.
- The first proposal would apply primarily to the largest, most internationally active banks to enhance risk sensitivity, reduce burden, and improve consistency across banks.
- The second proposal generally applies to all but the largest banks to better align capital requirements for traditional lending activities with risk while maintaining the framework’s simplicity.
- The third proposal – from the Fed – would improve how systemic risk is measured in the framework for determining the additional capital requirement for the U.S. global systemically important bank holding companies.
The agencies continue the theme of deregulation. The National Credit Union Administration issued its eighth round of deregulation proposals. The FDIC and OCC issued a final rule eliminating reputation risk from supervision. Readers might recall that the Fed has issued a proposal to also remove reputation risk from supervision – comments are due April 27, 2026.
On a lighter note, I recall the phrase “April showers bring May flowers” and hope that is true. It’s spring and that brings the cherry blossoms in Washington, D.C. – along with festivities and celebration of all things pink.
Welcome to the second quarter. We look forward to keeping you informed.
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From the federal financial institution regulators
Federal banking agencies propose to modernize capital framework
On March 19, 2026, the Federal Deposit Insurance Corp. (FDIC), Federal Reserve Board (Fed), and Office of the Comptroller of the Currency (OCC) requested public comment on two proposals to revise the regulatory capital framework. The first proposed rule, “Category I and II Banking Organizations, Banking Organizations With Significant Trading Activity, and Optional Adoption for Other Banking Organizations,” available but operationally burdensome for community banks, would simplify and align the regulatory capital rule for the largest banks in the country (Category I and II banks).
The second proposed rule, “Regulatory Capital and Standardized Approach for Risk-Weighted Assets,” revises the standardized regulatory capital approach by, among other things, making risk-weighted assets more risk-sensitive, accounting for the risk of mortgage servicing assets through an increase to the denominator rather than a decrease to the numerator, and requiring all banks over $100 billion in assets to include accumulated other comprehensive income in regulatory capital. Notably, the proposed rule excludes allowances on purchased seasoned loans from Tier 2 capital eligibility, similar to the current treatment of purchased credit deteriorated assets.
A third proposal, from the Fed, “Regulatory Capital Rule (Regulation Q): Risk-Based Capital Surcharges for Global Systemically Important Bank Holding Companies; Systemic Risk Report (FR Y-15),” would improve how systemic risk is measured in the framework for determining the additional capital requirement for the U.S. global systemically important bank holding companies.
The three proposals were issued in the Federal Register on March 27, 2026. The comment periods are open through June 18, 2026.
On May 5, 2026, at 2 p.m. Eastern, the FDIC, Fed, and OCC staff will host “Ask the Regulators: Proposals To Change Bank Capital Requirements,” to discuss the recent proposals. Registration is open, and questions can be submitted in advance online or by emailing [email protected]. Questions received by April 28 will receive priority.
FDIC and OCC finalize rule prohibiting use of reputation risk in supervision
On April 7, 2026, the FDIC and OCC finalized a rule codifying the elimination of reputation risk from their supervisory programs. The rule prohibits the agencies from criticizing or taking adverse action against an institution based on reputation risk and bars them from directing banks to close accounts or otherwise act on the basis of political, social, cultural, or religious views; constitutionally protected speech; or lawful business activities perceived to present reputation risk.
The final rule, “Prohibition on the Use of Reputation Risk by Regulators,” was published in the Federal Register on April 10, 2026, and is effective June 9, 2026.
OCC rescinds recovery planning guidelines for large banks
On March 31, 2026, the OCC rescinded its recovery planning guidelines for banks with at least $100 billion in assets. The agency stated that the change is intended to reduce regulatory burden and eliminate requirements that might be duplicative or no longer necessary. The rescission reflects an adjustment in supervisory expectations related to recovery planning.
The final rule, “Rescission of OCC Guidelines Establishing Standards for Recovery Planning by Certain Large Insured National Banks, Insured Federal Savings Associations, and Insured Federal Branches,” will become effective 30 days after publication in the Federal Register.
NCUA announces eighth round of deregulation proposals
On March 24, 2026, the National Credit Union Administration (NCUA) announced an additional round of proposed regulatory changes under its ongoing deregulation initiative. The proposals include updates related to indirect lending and certain third-party arrangements. The agency stated that the changes are intended to reduce unnecessary burden while maintaining appropriate safety and soundness standards.
Agencies propose updates to AML/CFT program requirements
On April 7, 2026, the FDIC, OCC, and NCUA requested public comment on proposed revisions to anti-money laundering/countering the financing of terrorism (AML/CFT) program requirements. The proposal would formalize a risk-based approach to AML/CFT programs, requiring banks (defined to include banks, savings associations, credit unions, and foreign banks) to focus resources on higher-risk customers and activities and maintain comprehensive programs with a U.S.-based compliance officer. It also would clarify that enforcement actions are reserved for significant or systemic failures rather than minor deficiencies. The amendments are intended to align each agency’s AML/CFT rules with changes concurrently proposed by the Financial Crimes Enforcement Network (FinCEN). In addition, the rule would strengthen coordination with FinCEN and permit broader information sharing related to supervisory and enforcement activities.
The proposal, “Anti-Money Laundering and Countering the Financing of Terrorism Programs,” was published in the Federal Register on April 10, 2026, and comments are due June 9, 2026.
FinCEN proposes rule to implement whistleblower program
On March 30, 2026, the FinCEN issued a proposed rule to implement its whistleblower program. The proposal outlines potential incentives and protections for individuals who report violations related to the Bank Secrecy Act and sanctions laws. FinCEN indicated that the program is intended to enhance the detection and reporting of illicit financial activity.
The proposed rule, “Whistleblower Incentives and Protections,” was posted in the Federal Register on April 1, 2026. Comments are due June 1, 2026.
FDIC rescinds policy on failed bank acquisitions
On March 19, 2026, the FDIC board of directors rescinded its 2009 Statement of Policy on Qualifications for Failed Bank Acquisitions. The agency noted that the policy included requirements beyond existing statutory and regulatory standards and could limit participation in the resolution process. The rescission is intended to broaden the pool of potential acquirers and support more efficient resolution outcomes.
The “Recission of the Statement of Policy on Qualifications for Failed Bank Acquisitions” was posted in the Federal Register on March 23, 2026, and was effective the same day.
From the federal agencies: Implementing the GENIUS Act
Treasury issues proposal to implement the GENIUS Act
On April 1, 2026, the U.S. Department of the Treasury issued a notice of proposed rulemaking (NPRM) seeking public comment on its implementation of the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act). The proposal would establish broad-based principles for determining whether a state-level regulatory regime for payment stablecoin issuers is “substantially similar” to the federal framework, allowing certain issuers (generally those with $10 billion or less in outstanding issuance) to opt into state supervision where comparable standards exist. Treasury indicated the NPRM builds on a prior advance notice issued in September 2025 and is intended to support innovation in stablecoins while maintaining consistent regulatory safeguards.
Comments are due within 60 days of publication in the Federal Register.
FDIC issues proposal to implement the GENIUS Act requirements and standards
On April 7, 2026, the FDIC issued an NPRM to implement requirements under the GENIUS Act. The proposal would establish requirements and standards for FDIC-supervised institutions seeking to issue payment stablecoins through subsidiaries, including requirements related to reserves, disclosures, and risk management.
The proposal, “GENIUS Act Requirements and Standards for FDIC-Supervised Permitted Payment Stablecoin Issuers and Insured Depository Institutions,” was published in the Federal Register on April 10, 2026. Comments are due June 9, 2026.
The NPRM is the second proposed rulemaking notice from the FDIC, following the Dec. 16, 2025, proposal, “Approval Requirements for Issuance of Payment Stablecoins by Subsidiaries of FDIC-Supervised Insured Depository Institutions,” to establish application requirements for FDIC-supervised firms seeking approval to issue payment stablecoins. On Feb. 6, 2026, the FDIC extended the comment period from Feb. 17, 2026, to May 18, 2026.
Treasury, FinCEN, and OFAC issue proposal to implement AML/CFT requirements of the GENIUS Act
On April 8, 2026, Treasury announced a joint FinCEN/Office of Foreign Assets Control (OFAC) proposed rule to implement the GENIUS Act’s anti-money laundering/countering the financing of terrorism (AML/CFT) and sanctions compliance requirements for permitted payment stablecoin issuers. The proposal would bring those issuers within the Bank Secrecy Act framework and require risk-based AML/CFT and sanctions controls, including suspicious activity reporting and the ability to block, freeze, or reject prohibited transactions, as part of a tailored regime intended to mitigate illicit finance and national security risks while supporting payment stablecoin innovation. The proposal, “Permitted Payment Stablecoin Issuer Anti-Money Laundering/Countering the Financing of Terrorism Program and Sanctions Compliance Program Requirements,” was published in the Federal Register on April 10, 2026, and comments are due June 9, 2026.
From the Financial Accounting Standards Board (FASB)
FASB declines to add certain agenda consultation topics
At its March 25, 2026, meeting, the FASB discussed feedback received in response to its 2025 agenda consultation and decided not to add several topics to its technical agenda or pursue further research on them at this time.
The board decided not to add two topics on credit losses, both related to ASU 2025-05, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets.” ASU 2025-05 provides a practical expedient, which is available to all entities, to assume that current conditions as of the balance sheet date do not change for the remaining life of the assets in scope. It also provides an accounting policy election, only for non-public business entities (PBEs), that permits consideration of collection activity after the balance sheet date but before financial statements are available to be issued.
The board also considered and decided not to add a project to either extend the accounting policy election to PBEs or extend the accounting policy election or practical expedient to other short-term assets.
For more information see the Crowe article “FASB Simplifies Credit Losses for Accounts Receivable and Contract Assets.”
FASB names four new members to its Investor Advisory Committee
On March 30, 2026, the FASB announced four new appointments to its Investor Advisory Committee (IAC), which is the board’s only advisory group composed solely of investors. Notably, one of the new members, Allen Puwalski, brings experience in bank analysis and community bank investing, which could add further industry insight to future committee discussions.
From the Securities and Exchange Commission (SEC)
SEC leadership outlines regulatory priorities at the SEC Speaks in 2026
At the SEC Speaks conference on March 19-20, 2026, Chair Paul Atkins described a regulatory agenda focused on modernization, clarity, and alignment of legacy rules with current market conditions, organized around an “advance, clarify, and transform” framework. He emphasized reducing complexity in the regulatory regime and focusing disclosure requirements on material information for investors.
Commissioners Hester Peirce and Mark Uyeda also discussed regulatory priorities, including the importance of prospective rulemaking and providing clearer regulatory frameworks, particularly for digital assets. They highlighted efforts to support capital formation, maintain strong anti-fraud enforcement, and coordinate with other regulators to address overlapping jurisdictional areas.
SEC director of the Division of Corporation Finance (Corp Fin) issues statement on application of Howey test to crypto assets
On March 17, 2026, Director Jim Moloney issued a statement discussing the application of the Howey investment contract test to crypto assets. The statement describes a taxonomy distinguishing crypto assets that are securities from those that are not and outlines circumstances under which a crypto asset may be offered and sold as part of an investment contract. It also notes that an investment contract may no longer exist once the relevant managerial or entrepreneurial efforts are no longer present or have been fulfilled.
SEC chair speaks at the 2026 Digital Asset Summit
On March 24, 2026, Atkins delivered remarks on the regulatory approach to digital assets, discussing the commission’s ongoing efforts related to digital asset regulation, including the application of the Howey test in evaluating crypto assets. He referenced the SEC’s recent statements and activities in this area and emphasized the need for a clear and consistent regulatory framework to support innovation and capital formation while maintaining investor protection.
Corp Fin issues interpretation updates
Throughout the month, Corp Fin issued several updates to its Corporation Finance Interpretations. On March 19, 2026, the division added one new question under Section 116 of the Securities Act Forms guidance addressing Form S-3 general instructions and transaction requirements. On March 23, 2026, the division issued an additional update related to asset-backed securities, adding six new questions under Section 213, Form ABS-15G, and one new question under Section 325, Item 1125 of Regulation AB.
SEC updates 2026 XBRL taxonomies
On March 16, 2026, the SEC’s EDGAR system was upgraded to Release 26.1 and began supporting the 2026 taxonomies. The announcement notes that EDGAR will accept either the 2026 or 2025 versions, but it encourages filers to use the most recent taxonomy releases and says that filers should transition to the 2026 taxonomies for the earliest reporting period ending on or after March 16, 2026.
From the Public Company Accounting Oversight Board (PCAOB)
PCAOB requests public comment on strategic priorities
On March 31, 2026, the PCAOB issued a request for public comment to inform development of its 2026-2030 strategic plan and future standard-setting focus areas. The request seeks stakeholder input on priorities for registration, inspections, enforcement, standard-setting, alignment with international auditing standards, the use of technology and AI, and ways to enhance transparency.
Comments are due May 15, 2026.
From the American Institute of CPAs and the Chartered Institute of Management Accountants (AICPA & CIMA)
AICPA exposes amendments to attestation standards
On March 25, 2026, the AICPA released an exposure draft proposing amendments to Statements on Standards for Attestation Engagements (SSAE) Nos. 18, 19, and 21 to align those standards with its broader proposed attestation standard-setting project covering common concepts, examination engagements, review engagements, and engagements to report on sustainability information. The proposal would amend existing attestation guidance so it works cohesively with the AICPA’s developing framework in this area.
AICPA issues FAQs on software tools used in SOC 2 examinations
On March 31, 2026, the AICPA issued FAQs addressing the effect of software tools on SOC 2 examinations. The resource notes that software tools designed to help service organizations prepare for and undergo SOC 2 examinations have become more common and provides nonauthoritative guidance on selected practice issues arising from their use. Given financial institutions’ continuing reliance on third-party technology and service providers, the FAQs could be useful reference points for practitioners and stakeholders involved with controls reporting.
From the Center for Audit Quality (CAQ)
CAQ highlights investor views on trust in the audit
In its March 2026 Audit Insider, published in late March, the CAQ highlighted findings from its Annual Institutional Investor Survey and noted that investor confidence in the audit remains strong but is closely tied to independence, regulatory oversight, and rigorous standards. The publication frames those findings as important as the profession responds to expanding expectations for assurance, technological change, and evolving reporting demands.
Portions of AICPA materials reprinted with permission. Copyright 2026 by AICPA.
FASB materials reprinted with permission. Copyright 2026 by Financial Accounting Foundation, Norwalk, Connecticut. Copyright 1974-1980 by American Institute of Certified Public Accountants.
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Federal banking agencies request comment on proposals to revise capital framework, federal agencies issue proposals to implement GENIUS Act, and more.
FDIC and NCUA publish Q4 25 results, banking agencies focus on regulatory burden reduction, SEC and CFTC announce MOU on coordination, and more.
Banking agencies focus on supervisory appeals, Fed finalizes 2026 stress-test scenarios, NCUA announces 2026 supervisory priorities, and more.
Federal banking agencies request comment on proposals to revise capital framework, federal agencies issue proposals to implement GENIUS Act, and more.
FDIC and NCUA publish Q4 25 results, banking agencies focus on regulatory burden reduction, SEC and CFTC announce MOU on coordination, and more.
Banking agencies focus on supervisory appeals, Fed finalizes 2026 stress-test scenarios, NCUA announces 2026 supervisory priorities, and more.