Banking and Finance Law Daily Wrap Up, FINANCIAL TECHNOLOGY—American Fintech Council urges Congress to codify banking laws in FY 2026 NDAA, (Dec 9, 2025)
Organizations Mentioned:American Fintech Council
By A. Bryan Gerepka
Congress now has the chance to codify practical, risk-based reforms that empower community banks while strengthening consumer-focused innovation, the organization says.
The American Fintech Council (AFC) is urging Congress to use the National Defense Authorization Act (NDAA) to codify bipartisan banking laws that protect, strengthen, and support responsible partnerships between community banks and financial technology (fintech) companies.
In a Dec. 8, 2025, letter to the leaders of the U.S. Senate and House of Representatives, the group pressed the lawmakers to “seize the moment” and ensure that the final NDAA text for Fiscal Year 2026 includes the community banking and regulatory tailoring legislation advanced this year by the House Financial Services Committee. The bills include the FAIR Exams Act (H.R. 940), SMART Act (H.R. 4437), TRUST Act (H.R. 4478), Advancing the Mentor-Protégé Program for Small Financial Institutions Act (H.R. 3709), FIRM Act (H.R. 2702), TAILOR Act (H.R. 3380), and the Community Bank Deposit Access Act (H.R. 5317).
These bills would deliver significant updates to community-bank supervision and bank-fintech partnerships, AFC wrote. They would collectively modernize the supervisory framework, promote risk-based oversight, enhance regulatory clarity, reduce burdens for well-managed community banks, strengthen minority- and rural-serving institutions, and ensure that bank-fintech partnerships continue to support consumer access, the group added.
More importantly, AFC continued, codifying these provisions is essential to locking in durable, bipartisan reforms that focus regulatory supervision on material risks, protect bank-fintech partnerships from political swings, encourage competition, and secure consumer access to responsible financial products nationwide.
“Regulatory clarity is essential for a modern financial system, and Congress now has the chance to codify practical, risk-based reforms that empower community banks while strengthening consumer-focused innovation,” said Ian P. Moloney, AFC’s Chief Policy Officer. “While we are greatly encouraged by the work conducted by leaders at the FDIC, the OCC, and the Federal Reserve, codifying these efforts in statute will provide durable regulatory frameworks, reinforce ongoing supervisory modernization, and help ensure that responsible bank-fintech partnerships continue to deliver safe, affordable financial products nationwide.”
“Congress has a rare opportunity to strengthen community banking and protect the responsible fintech partnerships that millions of consumers rely on,” added Phil Goldfeder, CEO of AFC. “As negotiations on the NDAA conclude, lawmakers should seize the moment and deliver long-overdue modernization that makes our financial system safer, more innovative, and more reflective of consumers’ banking habits.”
Background. In the AFC’s March 31, 2025, letter to the House Financial Services Committee and throughout the year, the group outlined its principles in support of updated community-banking legislation. According to AFC, each bill improves transparency, promotes consistent supervisory expectations, and enables institutions, particularly community banks and fintech partners, to compete effectively in a rapidly evolving financial landscape.
Bill summaries. The following is the AFC’s summary of each bill:
FAIR Exams Act (H.R. 940). The FAIR Exams Act establishes an Office of Independent Examination Review within the Federal Financial Institutions Examination Council to review material supervisory determinations issued by the federal banking agencies. The bill allows all financial institutions to appeal supervisory findings without fear of retaliation. It also requires that bank examiners complete examinations within 60 days of the exit interview and share all materials used to support the supervisory determination with the institution under review.
SMART Act (H.R. 4437). The SMART Act provides well-managed and well-capitalized financial institutions with assets under $10 billion targeted regulatory relief by instituting alternating limited-scope examinations and combining safety and soundness exams with consumer compliance reviews to streamline oversight and reduce burdens.
TRUST Act (H.R. 4478). The TRUST Act raises the consolidated asset threshold from $3 billion to $10 billion for insured depository institutions to qualify for an 18-month examination cycle.
Advancing the Mentor-Protégé Program for Small Financial Institutions Act (H.R. 3709). The Advancing the Mentor-Protégé Program for Small Financial Institutions Act directs the Department of the Treasury to establish a mentor-protégé program that pairs large financial institutions with small, rural, and minority depository institutions. The goal of the program is to enhance the capacity of small institutions to serve customers and potentially act as financial agents.
FIRM Act (H.R. 2702). The FIRM Act prohibits the use of “reputational risk” as a factor in the supervision of depository institutions. The bill aims to eliminate this subjective metric, prevent politicization of bank supervision, and ensure regulatory focus remains squarely on material risks related to safety and soundness.
TAILOR Act (H.R. 3380). The TAILOR Act requires federal financial regulators to consider an institution’s risk profile and business model when issuing new regulations or taking supervisory actions. Agencies must tailor rules that minimize unnecessary burdens, especially for low-risk institutions, such as community banks. The legislation also mandates using simplified reporting for eligible institutions, requires regulators to conduct a retrospective review of past rules to identify opportunities for tailoring, and directs agencies to submit a comprehensive report to Congress on efforts to modernize bank supervision.
Community Bank Deposit Access Act (H.R. 5317). The Community Bank Deposit Access Act clarifies that custodial deposits facilitated through bank-fintech partnerships are recognized as distinct from brokered deposits.
The AFC is a standards-based trade association that represents the largest fintech companies and innovative banks offering embedded finance solutions. According to the group, its mission is to promote a transparent, inclusive, and customer-centric financial system by supporting responsible innovation in financial services and encouraging sound public policy.
Companies: American Fintech Council
LegislativeActivity: BankingOperations CommunityDevelopment FederalReserveSystem FinancialStability FinTech Privacy PrudentialRegulation