Utah Banker 4 It looks like the new year could be very exciting for the banking industry. New U.S. Comptroller Jonathan Gould has already been busy at work streamlining the regulatory burden, and with the confirmation of Travis Hill as the chairman of the FDIC, we could see some significant shifts in the banking landscape in the coming year, particularly in Utah. The FDIC will now begin to work its way through a backlog of bank applications. In Utah, we have applications from Ford, General Motors, Edward Jones, Stellantis, One Main, Nissan, PayPal and Mercury. (By the time this article is published, there will likely be others.) The world recognizes the great work and commitment from Utah policy leaders to make Utah the best place in America to headquarter and operate a bank, and that could result in unprecedented expansion. But it isn’t all roses for Utah’s banks. The legal dispute between state-chartered banks and the State of Colorado took a bizarre twist late in 2025, which could be devastating to state-chartered banks throughout America. This ruling will have to be resolved in 2026. Hopefully, the 10th District will re-hear the issue and fix the damage it has done to the dual banking system. The FDIC, OCC, ABA, BPI, ICBA, all 50 state banking associations and 20 state attorneys general wrote briefs encouraging the 10th District to reverse course and restore the level playing field Congress intended to establish between national banks and state-chartered banks. If they don’t, we will have to appeal to the Supreme Court or go back to Congress for additional clarity. In 2026, a couple of unresolved rulemakings could have a significant impact on the industry and the economy. After more than a decade of debate, Section 1071 — the small business data collection and reporting rule — will likely be implemented. There is a fairly even split in Congress between those who want to see this misguided Dodd-Frank remnant repealed and those who will fight for it to their last breath. Given that stalemate, implementation of a final rule may be inevitable, and it will be painful and expensive. The rule governing access to customer data (Section 1033) will also likely come to a head in the next year, as it too has been delayed by administrative complexities and fierce debates over information security. We will also see the evolution of policies related to digital assets. The Genius Act of 2025 was the first and simplest domino to fall in this space, and it has already generated a massive battle over the meaning of a straightforward prohibition on the payment of interest and rewards on stablecoin balances. This breach of good-faith negotiation doesn’t bode well for the more complex issues and negotiations coming in the market structure bill of 2026. And who knows, is this the year we will finally get some consensus and clarity around the Community Reinvestment Act? CRA has been punted back and forth over the last eight years, with each of the last two administrations repealing the work of the former and replacing it with their vision of community reinvestment. The heart of the problem here is that the banking industry looks nothing like the industry that existed when CRA was first passed in the ‘70s. As regulators try to stretch the CRA regulations to fit the current nature of the industry, they inevitably extend beyond the law as it is written, which is inherently unstable ground in a post-Chevron world. At some point, Congress is going to have to do their job and codify what CRA should look like in the modern banking world. Bankers are eager to reinvest in their communities, but the regulations must be simple and predictable to navigate. We will continue to promote a flexible and predictable model that is driven by those who best understand the needs of our communities. We will also have to react and respond to advancements in artificial intelligence, the escalation of fraud, the ongoing battle between inflation and interest rates, and the horrific state of the U.S. national debt. So hold on to your hats, the new year will likely be an exciting and challenging one for the banking industry. BY HOWARD HEADLEE, President and CEO, Utah Bankers Association The Bottom Line
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