August 2026 Financial Reporting, Governance, and Risk Management
Message from Kara Baldwin, partner, financial services audit leader
As summer begins to wind down, the signs of fall are already starting to appear. Students are returning to classrooms, college football is kicking off, NFL fans are finalizing their fantasy rosters, and many of us are trying to squeeze in one last vacation before calendars fill up again.
For those of us in the financial institutions industry, the changing season also signals the approach of two of the most anticipated events of the year: the American Institute of CPAs (AICPA) Conference on Banks & Savings Institutions and the AICPA Conference on Credit Unions, which will be held concurrently Sept. 14-16 in Washington, D.C. These conferences provide a valuable opportunity to hear directly from regulators, standard-setters, and industry leaders on the accounting, auditing, regulatory, and risk management issues shaping the industry. We are excited to both moderate and present at a number of sessions in both conferences. As we prepare for those discussions, this month’s briefing highlights developments from the Securities and Exchange Commission (SEC), banking regulators, the Financial Accounting Standards Board, the Public Company Accounting Oversight Board, and the AICPA that are likely to be top of mind in the months ahead.
The August briefing provides a full slate of financial reporting, governance, and risk management developments for financial institutions to consider. We note several important regulatory and standard-setting updates, including the SEC’s creation of a specialized Financial Reporting and Accounting Unit within its Division of Enforcement, Division of Corporation Finance interpretation updates, the banking agencies’ proposed amendments to Community Reinvestment Act rules, the issuance of the Office of the Comptroller of the Currency’s Bank Accounting Advisory Series, and the AICPA’s issuance of Statement on Auditing Standards No. 150 on external confirmations.
Finally, we want to acknowledge the recently announced strategic investment from KKR into Crowe. As a result of this transaction, Crowe LLP will remain a licensed CPA firm and continue to provide attest services, including audits and reviews, while the newly formed Crowe Advisory LLC will provide tax, advisory, and other nonattest services. While our structure is evolving, our commitment to our clients is not. You should continue to expect the same focus on quality, responsiveness, practical insight, and service that has long defined our work.
I hope you find this month’s briefing useful, and as always, we welcome your questions, perspectives, and feedback.
Fed issues FOMC statement
On July 29, 2026, the Federal Open Market Committee (FOMC) voted 9-3 to maintain the target range for the federal funds rate at 3.5% to 3.75%. The committee said that recent indicators suggest economic activity continues to expand at a solid pace, labor market conditions remain stable, and the unemployment rate remains low, although inflation continues to be somewhat elevated. The FOMC also reaffirmed its commitment to supporting maximum employment and returning inflation to its 2% objective over the longer run.
Although the committee left interest rates unchanged, the statement continues to provide important insight into the Federal Reserve (Fed) assessment of economic conditions and the direction of monetary policy. For banks and other financial institutions, the decision helps frame expectations for funding costs, loan pricing, deposit strategies, and balance sheet management.
Banking agencies issue joint proposal amending the Community Reinvestment Act rules
On July 31, 2026, the Federal Deposit Insurance Corp. (FDIC) and the Office of the Comptroller of the Currency (OCC) proposed targeted changes to their Community Reinvestment Act (CRA) rules to better align the framework with the statute, improve how community development grants are directed, reduce burden for banks, and provide greater clarity on how to obtain CRA consideration. The agencies said the proposal would keep the core 1995 structure in place while making substantive, technical, and process-oriented changes. Comments are due Oct. 13, 2026.
The proposal is one of the more significant CRA developments because it could change how banks document eligible lending and community development activity, particularly for smaller and community-focused institutions.
Banking agencies issue joint statement on handling highly sensitive information during bank examinations
On July 16, 2026, the Fed, FDIC, and OCC issued a joint statement describing enhanced security procedures for highly sensitive information reviewed during bank examinations. The agencies said the approach may include reviewing materials on-site rather than transferring them onto agency systems and is intended to reduce cybersecurity risk while preserving examiner access. They also said they will notify affected banks of any potential or confirmed material breach involving confidential supervisory information as soon as practicable, and no later than 72 hours after discovery unless legal restrictions apply.
This is a meaningful operational development for institutions because it puts a sharper spotlight on how confidential exam materials are stored, transmitted, and accessed during supervisory reviews. It also signals that cybersecurity and supervisory confidentiality are being managed together more explicitly rather than as separate control issues.
Banking agencies and the NCUA issue enforcement policy supporting Venezuela’s economic recovery and earthquake relief
On July 31, 2026, the Fed, FDIC, OCC, and National Credit Union Administration (NCUA) issued a joint statement establishing a temporary enforcement policy intended to facilitate financial services supporting Venezuela’s economic recovery and humanitarian relief following recent earthquakes. Under the policy, eligible institutions providing authorized financial services to persons or entities in Venezuela generally will not face supervisory or enforcement action related to Bank Secrecy Act (BSA) requirements, provided they maintain an applicable BSA compliance program, make reasonable efforts to comply with BSA requirements, have not been subject to certain recent BSA enforcement actions, and remain compliant with applicable Office of Foreign Assets Control (OFAC) sanctions requirements. The agencies’ policy applies to authorized financial services provided from July 31, 2026, through Jan. 29, 2027, and complements a similar policy issued by the Financial Crimes Enforcement Network (FinCEN) on July 27.
The statement provides targeted regulatory flexibility for financial institutions that choose to facilitate authorized transactions involving Venezuela while maintaining core BSA and sanctions controls. Importantly, it does not suspend BSA obligations or provide blanket relief: institutions must continue making reasonable compliance efforts and knowing, willful, or intentional violations remain outside the policy’s protection. The action reflects an effort by the agencies to reduce regulatory uncertainty that could otherwise discourage financial institutions from supporting humanitarian relief, reconstruction, and financial stability in Venezuela.
OCC updates BAAS
On Aug. 14, 2026, the OCC released its annual update to the Bank Accounting Advisory Series (BAAS), which covers a variety of topics and promotes consistent application of accounting standards among national banks and federal savings associations. The BAAS is updated annually to address accounting questions, newly issued and updated accounting standards, and emerging issues observed through March 31. This edition of the BAAS includes new questions on nonaccrual loans, grants received by banks, and acquired loans as well as substantive updates to existing questions. The OCC also has made minor edits to existing entries and has renumbered others. The OCC notes that these edits do not alter prior conclusions or interpretations from prior editions.
The BAAS does not represent official rules or regulations of the OCC. Rather, it represents the OCC’s Office of the Chief Accountant’s interpretations of GAAP and regulatory guidance based on the facts and circumstances presented. While the BAAS is published by the OCC, the information in the BAAS is relevant to all financial institutions.
OCC issues revised CBLR framework
On July 30, 2026, the OCC issued a revised compliance guide for the community bank leverage ratio (CBLR) framework as part of its effort to provide regulatory relief for community banks. According to the OCC, the framework could free up about $64 billion to support Main Street lending and 95% of community banks are eligible. The guide updates the agency’s materials on a simplified capital measure for qualifying community banking organizations.
The CBLR framework remains one of the cleaner regulatory capital options for eligible community banks and the updated guide should make it easier to use and explain internally. The broader message is that the OCC is still pushing for simplification where it can do so without changing the underlying prudential objective.
OCC requests comment on proposed rulemaking on the availability of OCC information
On Aug. 3, 2026, the OCC requested comment on a proposed rule that would make structural and substantive changes to the agency’s rules governing the disclosure of OCC information. The OCC said the proposal is meant to better balance confidentiality needed for candid supervision with limited disclosure where appropriate to support business operations, public confidence, and accountability. The proposal would amend the OCC’s disclosure rules in 12 CFR 4.
For institutions, this is less about a change in day-to-day business conduct and more about the supervisory information environment around examinations, applications, and other OCC interactions. It is nevertheless important because disclosure and confidentiality rules shape how comfortable institutions can be in sharing information during supervisory processes. Comments are due Oct. 5, 2026.
Fed requests comment on proposals modernizing mutual banking organization and insider-lending rules
On July 31, 2026, the Fed requested comment on two proposals intended to modernize long-standing rules affecting banks. One proposal would update the framework for mutual banking organizations, which are owned by depositors rather than shareholders, and would provide greater flexibility for certain mutual institutions to raise capital while reducing procedural burden. The second proposal would modernize Regulation O, the Fed’s rule governing credit to bank insiders, by updating outdated thresholds, indexing dollar amounts to economic growth, and simplifying application of the rule while preserving safeguards against preferential treatment.
Together, the proposals reflect the Fed’s broader effort to update legacy frameworks that many institutions view as outdated or operationally cumbersome. For financial institutions, the mutual-bank proposal is especially relevant for depositor-owned organizations that may want more flexibility in capital planning, while the Regulation O proposal matters for governance, conflicts management, and insider-credit compliance. Comments for both proposals are due Oct. 5, 2026.
FDIC board approves proposal to amend regulations regarding lending limits for bank insiders
On July 31, 2026, the FDIC board approved a notice of proposed rulemaking that would raise and index thresholds for certain lending limits for executive officers and other insiders of FDIC-supervised institutions. The FDIC said the proposal is intended to align its thresholds with the Fed’s proposed Regulation O changes, update dollar limits to reflect inflation and economic growth, and simplify compliance through future automatic adjustments. Comments are due Oct. 5, 2026.
For banks, the proposal matters because insider-lending controls touch governance, compliance, and board oversight, and the FDIC is moving in step with the Fed to avoid divergent treatment across agencies. Even though the change is largely technical, it still could affect policy limits, tracking systems, and how institutions explain the rule to directors and executive officers.
NCUA finalizes 11 rules under Deregulation Project
On Aug. 5, 2026, the NCUA finalized 11 rules as part of the agency’s Deregulation Project, marking the first group of final rules issued under the initiative. The changes address a broad range of credit union requirements including surety and guarantor requirements, loans to other credit unions, service to underserved areas, community and corporate credit union chartering, excess and non-member share insurance disclosures, eligible obligations, service contracts, and third-party servicing of indirect vehicle loans. The rules are intended to eliminate requirements the NCUA considers obsolete, burdensome, duplicative, or more appropriately treated as guidance.
The final rules represent a meaningful step in the NCUA’s broader deregulatory agenda because they convert several regulatory relief proposals issued earlier this year into final requirements. Of particular operational significance are changes involving eligible obligations and indirect vehicle lending, which could provide credit unions greater flexibility in purchasing loans and managing indirect auto portfolios serviced by third parties. The package also reduces or eliminates several procedural, disclosure, and chartering requirements. The final rules become effective Sept. 8, 2026.
FinCEN permanently ends beneficial ownership reporting requirements for U.S. companies
On Aug. 11, 2026, FinCEN issued a final rule permanently removing the requirement for U.S. companies and U.S. persons to report beneficial ownership information (BOI) to FinCEN under the Corporate Transparency Act. The final rule makes permanent the exemptions previously established through interim relief. FinCEN also announced that it will delete previously reported BOI submitted by U.S. persons that are now exempt. Foreign entities that qualify as reporting companies remain subject to BOI reporting requirements but are required to report beneficial ownership information only for foreign individuals.
FinCEN issues alert on fraud schemes targeting federal student aid
On July 24, 2026, FinCEN issued an alert urging financial institutions to detect, prevent, and report suspicious activity connected to fraud schemes targeting federally administered student aid programs. The alert is aimed at helping institutions identify typologies and red flags tied to misuse of federal student aid. FinCEN also pointed institutions to the accompanying Treasury materials and alert resources.
The alert is important for institutions with consumer activity, money movement exposure, or account openings tied to education-related disbursements because it gives them a current typology to incorporate into monitoring and Suspicious Activity Report review. It also reinforces that FinCEN continues to focus on fraud as a major illicit finance risk, not just a secondary issue inside the anti-money laundering program.
FASB adds project on targeted improvements to goodwill impairment testing
At its July 29, 2026, board meeting, the FASB added a project to its technical agenda to address the level at which goodwill is tested for impairment and the frequency of such testing. The project follows feedback received through the FASB’s 2025 agenda consultation. The board has not yet proposed specific amendments to generally accepted accounting principles.principles.
The project could be relevant to banks and other financial institutions that carry acquisition-related goodwill because any future amendments could affect how and when goodwill impairment assessments are performed.
SEC establishes Financial Reporting and Accounting Unit
On Aug. 5, 2026, the SEC announced the creation of a new Financial Reporting and Accounting Unit within its Division of Enforcement. The specialized unit will focus on investigating and pursuing financial reporting fraud, accounting misconduct, and auditing-related violations.
SEC’s CorpFin updates Corporation Finance Interpretations
On July 9, 2026, the SEC’s Division of Corporation Finance (CorpFin) updated its Corporation Finance Interpretations addressing beneficial ownership reporting under Exchange Act Sections13(d) and 13(g), Schedule 13D, proxy rules and Schedules 14A/14C, Regulation Crowdfunding ongoing reporting requirements, and tender offer rules and schedules.
On July 21, 2026, CorpFin issued a new interpretation addressing the use of digital attestations for investor representations regarding accredited investor status in Rule 506(c) offerings of tokenized securities.
SEC highlights FASB proposed taxonomy guide for Regulation S-X schedules
On July 15, 2026, the SEC announced that the FASB published a proposed Taxonomy Implementation Guide for investment companies, including Regulation S-X schedules for business development companies. The guide illustrates the use of key-value pairs to tag nonnumeric, investment-specific information in schedules of investments. Comments were due to the FASB by Aug. 10, 2026.
SEC staff discontinues Rule 14a-8 no-action responses
On Aug. 14, 2026, CorpFin issued a statement further updating its approach to Rule 14a-8 shareholder proposal matters. The division previously announced that it will not respond to no-action requests to exclude shareholder proposals under Rule 14a-8, except for those relying on Rule 14a-8(i)(1). The Aug. 14 statement expands that approach as the division will discontinue all Rule 14a-8 no-action responses, including those under Rule 14a-8(i)(1), and will no longer issue non-objection letters for Rule 14a-8(j) notices. Under Rule 14a-8(j), companies must continue submitting required notices through the Shareholder Proposal form.
SEC announces roundtable on 24-hour trading
On July 23, 2026, the SEC announced it will hold a public roundtable on Sept. 17, 2026, to discuss preparations for progressing toward 24-hour trading in U.S. equity markets. Topics will include operational readiness, market resiliency, investor protection, and other opportunities and challenges associated with expanded trading hours. Members of the public may submit comments on the matter.
SEC proposes new electronic delivery framework
On July 16, 2026, the SEC proposed Regulation E-Delivery, which would permit issuers, broker-dealers, investment advisers, investment companies, and other market participants to electronically deliver required disclosures without first obtaining affirmative investor consent, while preserving investors’ ability to request paper delivery. Comments on the proposal are due Sept. 21, 2026.
Chair Paul Atkins, Commissioner Mark Uyeda, and Commissioner Hester Peirce each issued statements supporting the proposal. They characterized it as a modernization of the SEC’s disclosure framework that would enhance investors’ access to information while maintaining investor choice through an ongoing paper delivery option.
SEC commissioner addresses crypto vaults and lending strategies
On July 22, 2026, Peirce issued a statement addressing how federal securities laws may apply to crypto vaults and onchain lending strategies. Peirce said that moving activities onchain does not, by itself, place them outside the securities laws and that the analysis will depend on the specific structure, activities, facts, and circumstances, including potential securities, investment company, and investment adviser considerations.
PCAOB seeks comment on draft 2026-2030 strategic goals and objectives
On July 20, 2026, the PCAOB issued a request for public comment on draft goals and objectives for its 2026-2030 strategic plan. The draft is organized around three priorities: advancing audit quality and investor protection, clarifying expectations and the bases for PCAOB decisions, and transforming how oversight is delivered.
The draft plan includes six goals addressing modernization of standard setting and implementation, inspections and registration, enforcement, stakeholder engagement, the use of technology and data, and organizational effectiveness. The final plan could shape the PCAOB’s standard-setting, inspections, and enforcement priorities over the next five years. Comments are due Sept. 4, 2026.
AICPA issues SAS No. 150 on external confirmations
On July 13, 2026, the Auditing Standards Board issued Statement on Auditing Standards No. 150, “External Confirmations.” The standard requires auditors to perform external confirmation procedures for cash and cash equivalents held by third parties unless specified conditions exist. It also updates the guidance to address the widespread use of intermediaries, provides guidance on directly accessing information maintained by a knowledgeable external source, and establishes revised conditions for using negative confirmation requests.
The standard is effective for audits of financial statements for periods ending on or after Dec. 15, 2028, with early adoption permitted. The changes will directly affect audits of nonissuer financial institutions and other entities conducted under AICPA auditing standards. It also could affect the confirmation process at financial institutions that respond to auditors’ requests, serve as intermediaries, or facilitate auditor access to information maintained by third parties.
CAQ and Audit Committee Council comment on SEC filer status proposal
On July 20, 2026, the CAQ and its Audit Committee Council (ACC) submitted comment letters to the SEC on its proposal “Enhancement of Emerging Growth Company Accommodations and Simplification of Filer Status for Reporting Companies.” The letters support the SEC’s objective of simplifying filer status requirements and reducing unnecessary regulatory costs while expressing concern that portions of the proposal could extend accommodations too broadly.
The CAQ letter emphasizes that auditor attestation under Section 404(b) of the Sarbanes-Oxley Act provides meaningful investor protection and notes that the CAQ does not support a five-year exemption from the requirement for newly public companies regardless of size.
The ACC letter similarly expresses concern about the proposed increase in the large accelerated filer threshold and emphasizes the importance of effective internal control over financial reporting and independent auditor attestation. The letters encourage the SEC to consider more targeted alternatives that reduce burden while preserving the reliability, comparability, and transparency of financial information.
CAQ highlights institutional investors’ use of AI
On July 29, 2026, the CAQ highlighted findings from its latest Institutional Investor Survey on the use of artificial intelligence in investment research and decision-making. The survey found that 68% of institutional investors report extensive or moderate use of AI and that 83% expect their use of the technology to increase during the next two years. Common applications include analyzing earnings calls, summarizing management’s discussion and analysis and risk disclosures, extracting financial and operational metrics, and evaluating other qualitative disclosures.
At the same time, only 33% of respondents said they mostly or completely trust the output produced by their AI tools, with concerns including inaccurate results, data quality, and limited transparency into how conclusions are reached. The findings underscore the continued importance of human judgment and reliable, consistent, and decision-useful corporate reporting as AI becomes more integrated into investment analysis.
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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