July 2026 Financial Reporting, Governance, and Risk Management
Message from Sydney Garmong, partner, national office
Whether you were attending a cookout, watching fireworks, or spending other quality time with family and friends, we hope the Fourth of July holiday provided relaxation.
As expected in the evolution of digital assets and more regulatory proposals, we again decided this month warrants a new section, “From the federal agencies: Implementing the GENIUS Act.” This time, I proposed to title the section “From the federal agencies: It’s stable GENIUS,” but again, I was overruled.
On Monday, which was July 20, I decided to check my calendar as I had a feeling this day was a milestone. Yes, it was the date when the Sarbanes-Oxley Act of 2002 was signed into law. Next year will mark the 25th anniversary.
The Securities and Exchange Commission (SEC) proposal “Semiannual Reporting” (S7-2026-15) closed on July 6. That proposal would permit issuers to elect semiannual reporting, replacing three quarterly Form 10-Q filings with a single midyear Form 10-S. The SEC received more than 66,000 comment letters, so that certainly signals high interest. We have begun to analyze the comment letters and will report back.
July 20 also marked the date that the SEC’s comment period closed on its filer status proposal “Enhancement of Emerging Growth Company Accommodations and Simplification of Filer Status for Reporting Companies” (S7-2026-18). The proposal would simplify the filer status framework by largely moving to a large accelerated filer/nonaccelerated filer structure and would extend many emerging growth company/smaller reporting company accommodations to nonaccelerated filers. The comment letters are lighter than those for semiannual reporting. We are waiting for all the comment letters to be posted to analyze and report back.
Two of the largest American Institute of Certified Public Accountants (AICPA) conferences for our industry are just around the corner. This year, the AICPA banking conference and AICPA credit unions conference will occur concurrently, Sept. 14-16, 2026, at the Marriott Marquis, Washington, D.C.
This year’s conferences bring a focus on AI and digital assets. For those who attend on-site, the AICPA offers two preconference workshops: “Personal AI Mastery 2.0: Smarter Living Through Intelligent Tech” and “Demystifying Digital Assets: A Practical Introduction.” Both are included in the conference registration.
A few general sessions of interest:
- Welcome remarks from Mark Zandi, chief economist at Moody’s Analytics
- “U.S. Real Estate Market Update,” Douglas Duncan, former chief economist at Fannie Mae
- “The Power of the Assist,” Lea Olsen, founder of Rethink the Win
- “The Future After AI: Opportunities and Risks in the Age of Artificial Intelligence,” Jason Schenker, president of Prestige Economics and chair of the Futurist Institute
Here are the discount codes for registering to earn up to 21.5 CPE credits:
- The 2026 AICPA Conference on Banks & Savings Institutions. Use the code “BAN26” to save $100 on the in-person or the virtual option. This discount may be applied in addition to the early bird discount of $150 – for a total savings of $250 off the regular registration fee – for those who register by Friday, July 31, 2026.
- The 2026 AICPA Conference on Credit Unions. Use the code “CU26” to save $100 on the in-person or the virtual option. This discount may be applied in addition to the early bird discount of $150 – for a total savings of $250 off the regular registration fee – for those who register by Friday, July 31, 2026.
We hope to see you in September in Washington, D.C. That is not a misprint – the conferences are moving back into D.C. proper. We look forward to keeping you informed and welcome any feedback.
FDIC board approves multiple proposals to modernize supervisory and assessment frameworks
On June 25, 2026, the Federal Deposit Insurance Corp. (FDIC) board approved three notices of proposed rulemaking addressing deposit insurance assessments, resolution planning requirements, and the disclosure of confidential information. Collectively, the proposals would revise deposit insurance assessment thresholds and rate schedules, raise the applicability threshold for resolution submissions from $50 billion to $100 billion while streamlining filing requirements, and amend Part 309 governing the disclosure of confidential supervisory information. According to the FDIC, the proposals are intended to modernize several long-standing regulatory frameworks, better reflect changes in the banking industry, and improve the efficiency of supervisory and resolution processes while preserving the agency’s core safety and soundness objectives.
Taken together, the proposals represent one of the FDIC’s most significant rulemaking packages of 2026 and reflect a broader effort to tailor regulatory requirements while maintaining the strength of the Deposit Insurance Fund and the agency’s resolution planning framework. Institutions, particularly regional and larger banking organizations, could be affected by revisions to assessment methodologies, resolution planning expectations, and the handling of confidential supervisory information. Comments are due Aug. 31, 2026.
Fed issues initial findings from 2025 triennial payments study
On July 1, 2026, the Federal Reserve Board (Fed) released initial findings from its 2025 triennial payments study. The report shows that the total number of noncash payments reached 236.6 billion in 2024, with cards accounting for more than three quarters of payments by number and automated clearinghouse (ACH) accounting for the majority of payments by value. The Fed also said check use and ATM cash withdrawals continued to decline.
The study provides useful context for payment trends as banks, credit unions, and payment providers continue to invest in card, ACH, and digital payment capabilities. It also shows that ACH remains central to payment volume by value, while the continued decline in check usage reinforces the long-term shift away from paper-based payments.
Fed releases 2026 stress-test results
On June 24, 2026, the Fed released the results of its annual stress test and said the large banks tested remained well positioned to weather a severe recession and continue lending to households and businesses. The board said the 32 banks tested stayed above minimum common equity Tier 1 capital requirements, even after more than $708 billion in modeled losses under the hypothetical scenario. The Fed also said the current stress-test-related capital requirements will stay in place until 2027.
The results continue to point to a resilient large-bank capital base, even under a sharply adverse scenario. At the same time, the Fed’s decision to keep current capital requirements in place while refining the transparency and accountability of the stress-test process shows that the policy conversation remains active.
OCC issues lending and loan portfolio risk management handbook booklet
On June 25, 2026, the Office of the Comptroller of the Currency (OCC) issued the Comptroller’s Handbook booklet “Lending and Loan Portfolio Risk Management” and rescinded certain prior materials. The booklet provides guidance on lending risks and risk management practices across the life cycle of a loan, as well as portfolio-level oversight. It is one of the OCC’s more significant supervisory updates in the June cycle because it will guide examiner expectations going forward.
The booklet is relevant across the federal banking system because it frames how the OCC expects institutions to manage credit exposure, underwriting, monitoring, and portfolio-level risk. Although it is a handbook issuance rather than a rule, it is the type of supervisory guidance that can shape examination priorities and internal risk management practices.
OCC clarifies filing decision process
On June 17, 2026, the OCC issued Bulletin 2026-27 to clarify the standards it uses when deciding how to act on filings submitted by national banks, federal savings associations, and other OCC-supervised institutions. The bulletin explains that the agency may approve, conditionally approve, deny, or return a filing when it is materially deficient or lacks sufficient information. The OCC said the bulletin is intended to improve public understanding of how filings are decided under applicable laws, regulations, and policy.
The bulletin does not create a new filing regime but gives institutions a clearer picture of how the OCC approaches corporate and licensing submissions. For banks pursuing mergers, charter changes, or other corporate transactions, the completeness and quality of each filing remain central to the agency’s review.
Banking agencies and NCUA issue guidance on lending to individuals not legally authorized to work in the U.S.
On July 13, 2026, the FDIC, the OCC, and the National Credit Union Administration (NCUA) issued interagency guidance in accordance with an executive order, “Restoring Integrity to America’s Financial System,” which reminds supervised financial institutions of existing obligations with respect to credit risk management, particularly as it relates to borrowers who are not legally authorized to work in the United States.
This interagency guidance reinforces regulators’ expectation that institutions incorporate legal work authorization status into credit risk assessments when it could materially affect a borrower’s ability to repay. The guidance underscores the need to ensure underwriting policies, credit risk governance, and portfolio monitoring appropriately capture repayment risks tied to employment authorization while maintaining consistent, well-documented lending practices.
FinCEN updates Section 314(b) guidance to encourage fraud information sharing
On June 12, 2026, the Financial Crimes Enforcement Network (FinCEN) issued updated guidance clarifying how financial institutions can share information with each other under Section 314(b) of the USA PATRIOT Act. The updated fact sheet says the guidance is intended to support information sharing to identify fraud, money laundering, terrorist financing, sanctions evasion, and related criminal activity. FinCEN also noted that the new guidance replaces prior material and rescinds earlier guidance and an administrative ruling.
This is a practical development for banks and credit unions because it reinforces the use of Section 314(b) as an anti-fraud and illicit finance tool, not just a traditional anti-money laundering (AML) resource. The guidance is also notable for explicitly linking fraud detection to the broader information-sharing framework FinCEN wants institutions to use.
FinCEN issues supplemental alert on fuel smuggling and tax evasion schemes
On June 30, 2026, FinCEN issued a supplemental alert warning financial institutions about fuel smuggling and tax evasion schemes on the southern border associated with Mexico-based cartels. The alert describes the typologies involved, highlights red flags, and instructs institutions to reference the alert in suspicious activity reports using the designated key term. FinCEN issued the alert alongside a Treasury sanctions action and in coordination with other federal partners.
The alert underscores the degree to which FinCEN’s priorities continue to focus on border-related illicit finance, cartel activity, and cross-border tax evasion. For institutions with correspondent banking, money services business, trade finance, or remittance exposure, the alert provides additional indicators to support suspicious activity monitoring and reporting.
Fed proposes changes to banks’ anti-money laundering program requirements
On July 7, 2026, the Fed requested comment on a proposal to amend banks’ anti-money laundering program requirements. The proposal would align the Fed’s requirements with the separate AML/countering the financing of terrorism (CFT) proposals issued by four other agencies, require banks to allocate resources based on risk, and incorporate FinCEN’s AML priorities into bank risk assessments. The Fed said the proposal would keep supervision and enforcement focused on significant failures to implement an AML program once one is in place.
The proposal is important because it shows the agencies moving toward a more explicitly risk-based AML framework while still preserving core program expectations. For banks, the practical impact would be a stronger link between enterprise AML programs and the specific risks identified in the institution’s customer base and activity profile. Comments are due Sept. 8, 2026.
Agencies finalize joint data standards rule under the Financial Data Transparency Act
On June 11, 2026, the Fed announced a final rule establishing data standards for certain information collections submitted to financial regulatory agencies. The FDIC, OCC, NCUA, Consumer Financial Protection Bureau, Federal Housing Finance Agency, Commodity Futures Trading Commission (CFTC), Securities and Exchange Commission, and Department of the Treasury posted corresponding issuances the same week.
The rule is part of the implementation of the Financial Data Transparency Act of 2022 and is designed to improve interoperability by standardizing identifiers for legal entities and other data elements across agencies. The Fed said the final rule is generally similar to the August 2024 proposal, with changes reflecting public feedback.
For financial institutions, the significance is less about a new substantive policy requirement than about the direction of regulatory data reporting. Over time, the agencies’ move toward common data standards should make regulatory submissions more consistent and machine-readable, while also setting the stage for broader alignment in information collection across the federal financial regulatory system.
Banking agencies and NCUA request comment on customer identification program requirements for permitted payment stablecoin issuers
On June 18, 2026, FinCEN, the FDIC, the OCC, the Fed, and the NCUA jointly requested comment on a proposed rule requiring permitted payment stablecoin issuers to maintain an effective customer identification program under the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act. The agencies said the proposal would treat those issuers as financial institutions under the Bank Secrecy Act and would require customer identification standards comparable to those that already apply to banks and credit unions. Comments are due Aug. 21, 2026.
The proposal is one of the clearest signs yet of how the federal banking agencies intend to fold stablecoin activity into existing compliance expectations. For institutions watching digital asset developments, the proposal reinforces that customer identification, recordkeeping, and illicit finance controls are becoming central design features of the regulatory framework rather than after-the-fact compliance overlays.
OCC seeks comment on proposed GENIUS Act reporting forms and instructions for permitted payment stablecoin issuers
On June 11, 2026, the OCC issued Bulletin 2026-24, proposing new weekly and quarterly reporting forms for permitted payment stablecoin issuers and foreign payment stablecoin issuers registered with the OCC under the GENIUS Act. The bulletin lays out the reporting structure the OCC would expect from issuers subject to its jurisdiction and reflects the agency’s effort to translate the new statutory framework into operating requirements.
The bulletin is part of the OCC’s broader stablecoin rulemaking package and shows that the agency is moving beyond broad policy statements into reporting, supervision, and data-collection mechanics. For institutions that may participate in stablecoin issuance or related arrangements, the filing forms are an early indicator of the recurring information the OCC expects to receive once those activities are underway. Comments are due Aug. 11, 2026.
OCC proposes AML/CFT and sanctions compliance standards for OCC-supervised stablecoin issuers
On June 22, 2026, the OCC issued Bulletin 2026-28 proposing AML, CFT, and sanctions compliance standards for OCC-supervised permitted payment stablecoin issuers. The proposal would require covered issuers to comply with the Bank Secrecy Act, relevant GENIUS Act provisions, and applicable FinCEN and Office of Foreign Assets Control requirements. It also would create a supervision and enforcement framework for AML/CFT programs.
The proposal shows that the OCC is treating stablecoin issuers as part of the existing financial crime compliance perimeter rather than creating a wholly separate digital asset framework. That approach is likely to keep AML, sanctions, governance, and reporting controls at the center of any stablecoin-related operating model supervised by the OCC. Comments are due July 24, 2026.
FASB proposes targeted hedge accounting improvements
On June 17, 2026, the FASB issued a proposed Accounting Standards Update (ASU), “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Interest Rate Risk Hedging and Net Investment Hedging.” The proposal would permit entities to hedge interest rate risk for held-to-maturity debt securities in fair value and cash flow hedges, expand the definition of the Secured Overnight Financing Rate (SOFR) benchmark to permit any tenor of SOFR, and allow certain float-to-float cross-currency swaps with different reset dates to qualify as net investment hedging instruments. The proposal could be particularly relevant to banks and credit unions that use hedge accounting to manage interest rate risk in securities portfolios and other balance sheet exposures. Comments are due Aug. 17, 2026.
FASB proposes changes to investment company fair value reporting
On July 1, 2026, the FASB issued a proposed ASU, “Fair Value Measurement (Topic 820): Investment Companies With Equity Securities Subject to Contractual Sale Restrictions.” For investment companies within the scope of Topic 946, the proposal would require the effect of a contractual sale restriction to be considered when measuring the fair value of an equity security and would require disclosure of the amount of the discount attributable to the restriction. The FASB noted that current guidance can produce fair value measurements that overstate net asset value and distort performance reporting and management fees. The proposal could be relevant to financial institutions with affiliated investment companies, funds, or asset management operations. Comments were due July 17, 2026.
SEC chair outlines 2026 regulatory agenda
On July 7, 2026, Chair Paul Atkins issued a statement outlining the commission’s 2026 regulatory agenda, describing continued efforts to advance the agency’s core mission of protecting investors, facilitating capital formation, and maintaining fair, orderly, and efficient markets. The agenda highlights initiatives related to modernizing the regulatory framework, establishing rules and regulations for crypto assets, and enacting reforms to the public company disclosure regime intended to reduce compliance burdens while maintaining investor protections.
SEC chair remarks on disclosure and shareholder proposal reforms
On July 9, 2026, Atkins addressed the Society for Corporate Governance Conference about the public company disclosure regime and the shareholder proposal process. Atkins identified reforming Regulation S-K as a priority and discussed a potential “materiality overlay” that would permit companies to omit information otherwise required by a line item when the information is not material. He also noted the SEC is evaluating the role of the Division of Corporation Finance (Corp Fin) in the Rule 14a-8 no-action process and the rule more broadly, including the federal role in regulating shareholder proposals and the rule’s relationship with state corporate law.
SEC chair reflects on U.S. market history and regulatory approach
On June 30, 2026, Atkins delivered remarks at the Economic Club of New York and, in recognition of the United States’ 250th anniversary, traced the nation’s free-enterprise and capital markets tradition through ideas of Thomas Jefferson, Adam Smith, and other historical figures. Atkins connected these themes to the SEC’s “ACT strategy” of advancing regulatory frameworks, clarifying jurisdictional lines, and transforming the rulebook by returning to first principles including clear and restrained rules, materiality-based disclosure, and enforcement focused on meaningful investor protection.
SEC updates capital markets statistics
On July 1, 2026, the Division of Economic and Risk Analysis published updated statistics and visualizations covering key segments of the U.S. capital markets. In the first quarter of 2026, 99 IPOs raised more than $22 billion, representing an approximately 86% increase in proceeds from the first quarter of 2025. During the same period, 264 follow-on registered offerings raised more than $44.2 billion, compared with 250 offerings raising more than $40.4 billion in Q1 of 2025.
SEC staff updates interpretation on business combination disclosures
On June 23, 2026, Corp Fin issued a new Securities Act interpretation addressing registration and disclosure considerations for exchange-listed rights issued in connection with a business combination.
SEC commissioner discusses capital markets and transatlantic cooperation
On June 13, 2026, Commissioner Mark Uyeda delivered remarks in Kraków, Poland, about the historical ties between the United States and Poland and the role of free enterprise and capital markets in supporting economic growth. Uyeda also highlighted the SEC’s current priorities of refocusing disclosure requirements on financial materiality, modernizing the registered offering process, and expanding accommodations for smaller and newer companies.
SEC and CFTC request comment on derivatives framework harmonization
On June 18, 2026, the SEC and the CFTC issued two joint requests for public comment. The agencies seek input on modernizing and streamlining data-reporting frameworks for security-based swap and swap markets. They also request comment on further clarifying and harmonizing derivatives product definitions. Comments on each request are due Aug. 24, 2026.
PCAOB names director of enforcement and investigations
On June 15, 2026, the PCAOB announced that George G. Demos was named director of its Division of Enforcement and Investigations. In this role, Demos will oversee the PCAOB’s investigations of rules violations and enforcement of professional standards and applicable securities regulations. Demos previously was a litigation partner and served as senior counsel in the SEC’s Division of Enforcement, where he led investigations and prosecutions involving accounting fraud, insider trading, and market manipulation. William Ryan, who had served as acting director since December 2025, will return to his role as the division’s chief counsel.
PCAOB seeks input on standard-setting and research agendas
On June 23, 2026, the PCAOB announced a public comment period seeking stakeholder input on potential future areas of focus for its standard-setting and research agendas and on its overall standard-setting process. This is the first time the PCAOB has issued a request for comment specifically on those agendas and processes. The request also seeks input on how the SEC’s proposed optional semiannual reporting framework could affect PCAOB standards. Comments are due Aug. 7, 2026.
PCAOB staff launches firm consultation process
On June 25, 2026, the PCAOB announced a new firm consultation process, led by its Office of the Chief Auditor, to provide registered public accounting firms with more timely and consistent guidance. Under the process, firms may submit questions directly to PCAOB staff and receive informal staff views regarding the implementation of new standards and the application of existing auditing, attestation, quality control, ethics, and independence standards and rules. The PCAOB does not plan to make individual consultation requests public but might publish broader guidance on frequently asked questions or matters with wider applicability.
PCAOB announces chief auditor departure
On June 26, 2026, the PCAOB announced that Chief Auditor Barbara Vanich would depart the organization on July 15, 2026, after more than 17 years of service. Vanich, who has served as chief auditor since October 2022, helped lead several significant standard-setting and implementation initiatives including the adoption of QC 1000, “A Firm’s System of Quality Control”; the development of implementation resources for new standards; the PCAOB’s first request for input on potential future standard-setting and research priorities; and the launch of a firm consultation process. The PCAOB said it has begun a search for her successor.
AICPA and CIMA report continued growth in sustainability assurance
On June 29, 2026, the AICPA and CIMA and the International Federation of Accountants released the sixth annual edition of their global study on sustainability disclosure and assurance practices. The study found that 75% of the large global companies reviewed obtained assurance over at least some sustainability disclosures in 2024 and that audit firms performed 59% of sustainability assurance engagements globally. The study also found increasing use or planned use of International Sustainability Standards Board standards and European Sustainability Reporting Standards, indicating continued movement toward greater standardization and integration of sustainability information with financial reporting. The findings provide additional context for financial institutions with international operations, voluntary sustainability reporting, or audit committee oversight of sustainability information.
CAQ and Audit Committee Council comment on semiannual reporting proposal
On June 26 and July 6, 2026, respectively, the CAQ’s Audit Committee Council (ACC) and the CAQ submitted comment letters to the SEC on its proposed optional semiannual reporting framework. The ACC supported allowing companies to elect semiannual reporting, emphasizing that management and the audit committee, informed by stakeholder outreach, should determine the appropriate reporting frequency and that financial information must remain reliable regardless of the cadence. The CAQ supported efforts to reduce unnecessary public company reporting burdens but recommended that the SEC further study whether those burdens primarily result from reporting frequency, the volume of required interim disclosures, or other factors. The CAQ also highlighted potential implications for auditor involvement, the timing of annual audit work, internal control over financial reporting, and the timely detection and remediation of misstatements and control deficiencies.
CAQ comments on proposed QC 1000 targeted amendments
On July 9, 2026, the CAQ submitted a comment letter supporting the PCAOB’s targeted proposed amendments to QC 1000, “A Firm’s System of Quality Control.” The CAQ said the proposed changes would improve alignment with other quality management standards, reduce unnecessary implementation complexity, and maintain accountability for achieving the reasonable assurance objective of firms’ quality control systems. Among other changes, the CAQ supported eliminating the design-only requirement for registered firms that do not perform PCAOB engagements, rescinding the external quality control function requirement, providing greater flexibility in assigning quality control roles, refining the evaluation of engagement and quality control deficiencies, permitting firms to select their annual evaluation date, reducing the documentation retention period to five years, and maintaining the standard’s current effective date. The CAQ also encouraged the PCAOB to issue additional implementation guidance, including frequently asked questions, and provide further opportunities for practitioner input.
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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