Banking and Finance Law Daily Wrap Up, WORTH NOTING—Other regulatory, legislative, litigation, and industry developments, (Feb 20, 2026)

By WK Editorial Staff

A weekly roundup of other items of interest to the banking and finance law community.

DEBT COLLECTION—In a non-precedential opinion, the U.S. Court of Appeals for the Ninth Circuit held the district erred in granting summary judgment to a law firm on a consumer’s Fair Debt Collection Practices Act (FDCPA) claim. The law firm conceded it mistakenly pursued garnishment of the consumer’s Social Security benefits, but invoked the FDCPA’s bona fide error defense, which required the firm to establish the violation was unintentional, resulted from a bona fide error, and occurred despite the maintenance of procedures reasonably adapted to avoid the violation. The Ninth Circuit held that the firm’s asserted mistake was not objectively reasonable as a matter of law because the firm knew the garnished funds consisted entirely of direct-deposited Social Security benefits that were immune from garnishment but continued to defend the garnishment for months, arguing that federal regulations protected only two months’ worth of benefits from garnishment. “[T]hose regulations do not limit, override, or diminish the broader statutory exemption for Social Security benefits,” the court said. “Given the clarity of the governing law, Goodman’s position lacked any objectively reasonable basis in law” (Huffman v. JP Morgan Chase Bank, Nos. 24-5653, 24-7348 (9th Cir. Feb. 12, 2025)).

ENFORCEMENT ACTIONS—The Office of the Comptroller of the Currency has announced the termination of several enforcement actions after determining that the institutions involved had met the requirements necessary for closure. The OCC explained that it issues terminations when a bank has demonstrated compliance with all articles of a prior action, when outdated or irrelevant articles no longer apply, or when unresolved provisions have been incorporated into a new action. In its February 2026 release, the OCC reported ending a Formal Agreement with First Federal Savings Bank of Kentucky, originally issued in August 2024. In that August 2024 Formal Agreement, the OCC found unsafe or unsound practices related to strategic planning, succession planning, liquidity risk management, and interest rate risk management, and required the bank to adopt comprehensive corrective programs in each area. The agency also terminated a Formal Agreement with Hiawatha National Bank in Wisconsin, which had been in place since October 2024. In the Hiawatha National Bank Formal Agreement, the OCC cited deficiencies in liquidity oversight, annual credit review processes, risk rating, independent loan review, and allowance for credit losses, requiring the bank to strengthen its risk management and credit administration frameworks. Additionally, the OCC ended a March 2024 Formal Agreement with Minnstar Bank, National Association in which the OCC identified unsafe practices involving concentrations of credit, underwriting, appraisals, Allowance for Credit Losses methodology, incentive compensation, capital planning, and liquidity risk management, as well as violations of lending limits and rules governing loans to executive officers. The OCC also terminated its November 2023 Formal Agreement with North Side Federal Savings and Loan Association of Chicago. In this 2023 Formal Agreement, the OCC found unsafe or unsound practices in board and management oversight, earnings, IT management, sensitivity to market risk, and consumer compliance, along with violations of the Truth in Lending Act and Flood Disaster Protection Act. Finally, the OCC closed its August 2022 Formal Agreement with Unity National Bank of Houston following the institution’s satisfaction of the required corrective measures. Regarding the Unity National Bank of Houston Formal Agreement, the OCC identified unsafe or unsound practices related to strategic and capital planning, credit risk management, Allowance for Loan Loss in Lending methodology, corporate governance, and internal controls.

FEDERAL RESERVE SYSTEM—The Federal Reserve Board will hold a hybrid public outreach meeting on March 26, 2026, as part of its review of regulations under the Economic Growth and Regulatory Paperwork Reduction Act (EGRPRA). EGRPRA requires the Fed, with input from the public, to review its regulations at least once every 10 years to identify any outdated, unduly burdensome, or otherwise unnecessary regulatory requirements applicable to certain supervised institutions. The outreach meeting is intended as an opportunity for stakeholders to present their views on the regulatory categories applicable to Fed-supervised: applications and reporting; powers and activities; international operations; consumer protection; directors, officers and employees; money laundering; rules of procedure; safety and soundness; securities; banking operations; capital; and the Community Reinvestment Act. Individuals interested in providing oral comments, either virtually or in person, must register by March 19, 2026.asset custody, issue and orchestrate stablecoins, and manage stablecoin reserves under federal oversight once final approval is granted. Moreover, the company stated that the conditional approval positions it to provide businesses with regulatory clarity, institutionalgrade compliance, and nationwide scale within a federal framework. asset custody, issue and orchestrate stablecoins, and manage stablecoin reserves under federal oversight once final approval is granted. Moreover, the company stated that the conditional approval positions it to provide businesses with regulatory clarity, institutional grade compliance, and nationwide scale within a federal framework.

FINANCIAL TECHNOLOGY—The Office of the Comptroller of the Currency has issued conditional approval allowing Bridge to organize a federally chartered national trust bank. According to Bridge’s announcement, the charter would authorize the company to offer digitalasset custody, issue and orchestrate stablecoins, and manage stablecoin reserves under federal oversight once final approval is granted. Moreover, the company stated that the conditional approval positions it to provide businesses with regulatory clarity, institutional-grade compliance, and nationwide scale within a federal framework.asset custody, issue and orchestrate stablecoins, and manage stablecoin reserves under federal oversight once final approval is granted. Moreover, the company stated that the conditional approval positions it to provide businesses with regulatory clarity, institutionalgrade compliance, and nationwide scale within a federal framework.

LAW FIRM NEWS—Morgan Lewis has announced the addition of partners Matthew Martel and Joseph Sconyers to its Boston office, strengthening the firm’s litigation platform and financial services capabilities. Lewis and Martel bring decades of experience advising leading financial institutions in complex litigation, regulatory inquiries, investigations and enforcement actions, and risk management matters, with a reputation for delivering practical, business-focused outcomes. “Financial institutions continue to navigate heightened litigation risk and regulatory scrutiny,” said Firm Chair Jami McKeon. McKeon stated that the pair’s “combined experience, deep industry relationships, and collaborative approach enhance our ability to serve major financial institutions in Boston and across key markets.” Martel has more than 25 years of experience representing global financial institutions in state and federal litigation, government investigations and enforcement actions, and bankruptcy and restructuring matters. Sconyers is a seasoned litigator focused on complex disputes involving structured financial products

LAW FIRM NEWS—Willkie Farr & Gallagher LLP has added banking and financial services regulatory lawyer Patrick R. Hanchey as a partner in the Corporate & Financial Services Department in the firm’s Dallas office. Hanchey advises banks and financial institutions on state and federal banking laws, high-stakes regulatory matters, enforcement actions and other corporate transactions. He has been recognized by various legal directories for his standout work in banking and finance matters, and he is a frequent contributor to leading banking industry publications. Firm Chairman Matthew Feldman said “Patrick is a skilled lawyer whose practice intersects transactional, regulatory and enforcement work in the banking and financial services space. His deep experience with state and federal banking laws and regulations will prove a valuable addition to our team’s capabilities, and we are thrilled to welcome him to Willkie.”

LAW FIRM NEWS—Buchanan Ingersoll & Rooney’s Financial Institutions, Bankruptcy and Real Estate section has added Jon Mooney as a shareholder in its Pittsburgh office. Mooney focuses his practice on capital markets transactions. Mooney has particular expertise in trade receivables financing, ranging from factoring to complex securitization structures. He has represented banks and private credit funds as receivables purchasers or financiers, as well as the seller/borrower in receivables transactions throughout the United States, Canada and Europe. “Jon is a great addition to the section. His experience aligns with the work we do for our clients, and we’re excited to have him join the team,” said Sean Girdwood, co-chair of the Financial Institutions, Bankruptcy and Real Estate Section.

PRUDENTIAL REGULATION—The Federal Reserve Board has released the latest edition of its Bank Holding Company Supervision Manual. The over-1400-page manual documents guidance over supervision of bank holding companies and their nonbank subsidiaries for maintaining financial strength, as well as determining the effects or consequences of transactions between a holding company or its nonbanking subsidiaries and its subsidiary banks. The latest supplement reflects decisions of the Board of Governors, new and revised statutory and regulatory provisions, supervisory guidance, and instructions that the Division of Supervision and Regulation has issued since the publication of the November 2024 supplement. Specifically, the manual has been revised to align with the Board’s June 23, 2025, announcement that reputational risk will no longer be a component of examination programs in its supervision of banks and holding companies.

PRUDENTIAL REGULATION—The Federal Reserve Board has updated its Commercial Bank Examination Manual, which presents examination objectives and procedures that Fed examiners follow in evaluating the safety and soundness of state member banks. The manual is intended as guidance for planning and conducting bank examinations. The Fed’s revised manual reflects decisions of the Fed, new and revised statutory and regulatory provisions, supervisory guidance, and instructions that the Division of Supervision and Regulation has issued since the publication of the May 2022 supplement.

Attorneys: Robert T. Mills (Mills & Woods Law PLLC) for Bruce E. Huffman. Elliot H. Scherker (Greenberg Traurig, PA) for JPMorgan Chase Bank, N.A. Kelley M. Jancaitis (Broening Oberg Woods & Wilson, PC) for Goodman Law Group, LLP. Sean Girdwood, Jon Mooney (Buchanan Ingersoll & Rooney). Matthew Martel, Jami McKeon, Joseph Sconyers (Morgan, Lewis & Bockius LLP). Matthew Feldman, Patrick R. Hanchey (Willkie Farr & Gallagher LLP).

Companies: Bridge; First Federal Savings Bank of Kentucky; Goodman Law Group, LLP; Hiawatha National Bank in Wisconsin; JPMorgan Chase Bank, N.A.; Minnstar Bank, National Association; North Side Federal Savings and Loan Association of Chicago; Unity National Bank of Houston

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