Banks urge OCC to expand risk tests for nonbank stablecoin issuers
On Friday, the Bank Policy Institute, American Bankers Association, Consumer Bankers Association and Independent Community Bankers of America urged the OCC to expand its review of nonbank stablecoin applicants to include governance, risk management and cybersecurity tests. The request builds on the OCC’s July 27 notice that set out the information issuers must provide under the GENIUS Act.
The groups want non‑IDI applicants to show they have adequate governance, risk‑management procedures, operational resilience, cybersecurity practices and recovery planning. They also seek regular examinations to verify compliance with federal consumer‑protection laws and to assess how issuers manage obligations to stablecoin users after they begin operating. The letter calls for stablecoin‑issuer applications to be open to public comment and for foreign payment stablecoin issuers to meet home‑country capital requirements matching those of domestic issuers. They said the aim is to keep stablecoins useful for payments and settlements without exposing holders to excessive or unnecessary risk. They want the OCC’s assessment to move from checking whether an issuer has adequate operational controls to evaluating how it manages its obligations to stablecoin users once it is operating.
The regulatory work comes as financial institutions prepare for stablecoin activity that remains limited today but is expected to become more significant. Sept. 25 was only the first deadline for this particular OCC proceeding. The agency said in its July notice that it will publish a second notice with a 30‑day comment period.
What we know
The July 27 OCC notice outlined the information prospective issuers would provide under the GENIUS Act, including business plans, financial condition, management, reserves, redemption policies and risk management programs.
Sept. 25 was only the first deadline for this particular OCC proceeding.
The Federal Reserve requested comment on two GENIUS Act proposals, PYMNTS reported Thursday (Sept. 24).
The PYMNTS Intelligence report “Credit Unions Build for Digital Money’s Next Chapter” found in September that 34% of credit unions classified as quick followers said they were operationally prepared to support stablecoins, while only 9% were actively engaged.
Meanwhile, 33% of credit union executives said they expect stablecoins to be very or extremely significant to payments and product strategy in six years, compared with 3% over a three-year period.