Weekly News Briefing on Community Banking - August 3, 2025

Community Bank Performance

State-Chartered Banks on the Rise: The share of community bank assets under state charters grew from 62% in 2000 to 79% in 2025, reflecting greater reliance on state oversight for smaller institutions (Source: banknews.com).

CRA Evaluations Released: The OCC published Community Reinvestment Act (CRA) performance evaluations for 15 national banks and federal savings associations, assessing their community credit efforts (Source: occ.gov).

Regulatory Changes

Proposed CRA Rule Rescission: Federal banking agencies proposed repealing the 2023 CRA final rule, aiming to simplify compliance for community banks while preserving community investment mandates (Source: aba.com).

FDIC Threshold Adjustments: The FDIC proposed adjusting regulatory thresholds for inflation, potentially reducing reporting burdens for community banks under specific asset size categories (Source: fdic.gov).

Opposition to Crypto Charter: Regulators face pressure to deny Circle’s national trust bank charter application, labeled “the most dangerous” due to risks of integrating crypto with traditional banking. The ICBA strongly opposes, citing threats to community bank stability (Sources: americanbanker.com, independentbanker.org).

Push for Lending Relief: Federal initiatives aim to increase bank lending, but state regulators highlight CFPB mortgage rules as barriers for community banks, urging relief to improve access (Source: bankingdive.com).

Congressional Support for Supervision: Congressman Meuser met with Federal Reserve Vice Chair Michelle Bowman to discuss supervision, reinforcing support for community banks amid regulatory shifts (Source: fdic.gov).

2025 Audit Shifts: Regulatory exam tones and content for 2025 are evolving, with ongoing scrutiny of critical issues for community banks (Source: aba.com).

Technology Adoption

Tech Spending Concerns: Community banks may be overspending on technology. New guidance recommends reviewing tech budgets to cut costs, save time, and reduce operational challenges (Source: bankingdive.com).

Weekly News Briefing on Community Banking - July 27, 2025

Regulatory Changes

Navigating new rules is critical, with challenges and simplifications on the horizon. Industry groups like the American Bankers Association are contesting a Biden-era 1033 rule via lawsuit, citing risks to sensitive data exposure; the Kentucky Bankers Association and a community bank are co-plaintiffs (aba.com, July 25).

The FDIC has finalized tweaks to assessment regs under the Community Bank Leverage Ratio, designed to ease capital compliance for smaller players (fdic.gov, July 8).

Proposed revisions to capital rules under the Economic Growth and Regulatory Paperwork Reduction Act incorporate updated accounting standards, potentially altering reporting for community banks (federalregister.gov, July 24).

The OCC's new guidance promotes responsible innovation in fintech for midsize and community banks, while upholding supervisory expectations (July 14).

Technology Adoption

Tech is no longer optional—it's a survival tool, though hurdles persist. Almost all community bank executives see embedded finance as vital, but legacy systems complicate API integrations; more than half are eyeing banking-as-a-service (BaaS) despite regulatory heat (bankingdive.com, July 9).

Agile, tech-savvy community banks are primed for lending growth, capitalizing on customer-focused digital strategies (July 1).

A recent roundtable explored AI's potential in fraud detection and risk management, stressing the need to align innovation with compliance (consumerfinancialserviceslawmonitor.com, July 22).

Fraud Prevention

Rising threats demand proactive measures, especially with AI disruptions. OpenAI's Sam Altman cautions that generative AI is eroding standard bank fraud tools, forecasting a major crisis without swift adaptations (americanbanker.com, July 22).

The Atlanta Fed is tackling escalating check fraud via initiatives and possible regs, pushing banks to strengthen consumer safeguards (atlantafed.org, July 24).

Payments fraud, particularly checks across channels, tops concerns; banks should refresh controls in light of 2025 updates (oncourselearning.com, July 8).

A financial crime report flags ongoing struggles in fraud tech and compliance, positioning these as priorities for next year (thepaymentsassociation.org, July 15).