As 2026 gets underway, one theme keeps showing up in banking headlines: who gets access, and under what conditions. Whether it’s fintechs or crypto companies chasing bank charters, the Fed reconsidering access to its payment rails, or regulators sharpening expectations around technology and fraud, the lines between banks, fintechs, and regulators are being redrawn faster than most playbooks were written. Here’s what community banks and credit unions need to know from January’s biggest developments.
The race to secure a bank charter continues to accelerate, as fintechs and crypto firms push deeper into regulated banking territory. Payments giant PayPal has applied for an industrial bank charter, joining a growing list of nonbanks seeking direct access to deposits, payments infrastructure, and lower funding costs. Organizers have also filed applications with the OCC and FDIC to establish VALT Bank, a de novo digital bank focused on serving “digitally demanding” small and midsized businesses in the U.S.
Crypto and technology aligned banking efforts are gaining momentum as well. Erebor Bank recently received conditional approval from the FDIC for deposit insurance, clearing a major hurdle toward launching a federally insured bank designed to serve crypto, technology, and venture backed firms. At the same time, the OCC has signaled openness to national trust bank charters for digital asset companies such as Circle, Paxos, Ripple, and BitGo, reigniting debate over whether these charters allow firms to operate core banking and payments services without taking traditional deposits. Meanwhile, some fintechs are gaining access through acquiring banks, with Enova announcing plans to acquire Grasshopper Bank.
The surge in charter activity highlights just how strategically valuable regulated bank status has become. While new entrants may target deposits, payments, and tech savvy SMB customers, their regulatory journeys also underscore the complexity and cost of compliance that community FIs already manage every day. Institutions that modernize their infrastructure and strengthen correspondent and fintech partnerships can lean into their charter advantages while letting newer entrants absorb the growing pains.
Read more about Acceleron’s correspondent banking charter in progress.
Read about Acceleron’s partnership to bring international payment automation and non-interest income to Service Credit Union:
As interest in bank charters grows, regulators are also reconsidering how access to core infrastructure is granted. The Federal Reserve is seeking public input on the concept of a “skinny” master account, which is a limited form of access to Fed services that would stop short of the full privileges granted to traditional banks. Under the proposal, eligible institutions could access certain payment services without receiving interest on balances or participating in all Fed facilities.
The idea has emerged amid ongoing legal and policy debates over master account access, particularly involving novel charters and crypto focused institutions. Supporters say a tiered approach could limit ways for firms to get bank-like access without full oversight, while critics worry partial access could still create new risks. While exploratory, the discussion alone marks a meaningful shift in how access to the payment system could be structured. The final rule is expected to be issued by the end of 2026.
Full master account access has long been a defining advantage of regulated institutions. Any move toward limited access for nontraditional firms could lower barriers for new entrants while raising questions about risk. Community FIs will want to stay engaged in the rulemaking process to ensure their voices are heard and that access to critical infrastructure remains fair and risk appropriate.
Federal Reserve Governor Michelle Bowman outlined a more detailed regulatory relief agenda for community banks, calling for clearer separation between how smaller institutions and larger regional banks are supervised. She argued that community banks should operate under a framework better aligned with their business models, risk profiles, and local focus.
Bowman highlighted proposals to adjust regulatory thresholds not only by asset size, but also by indexing them to nominal GDP, which reflects both economic growth and inflation. Indexing thresholds would help preserve the original intent of banking rules as the economy grows, rather than letting inflation quietly pull more community banks into higher regulatory tiers. She also called for indexing statutory thresholds consistently across federal regulators and modernizing reporting and application requirements to reduce unnecessary burden.
While these ideas would not change current rules, they signal growing momentum toward more tailored oversight for community banks. Institutions should continue to stay the course on compliance and risk management while monitoring whether these proposals translate into future regulatory or legislative action.
Against this backdrop, leadership changes are further shaping regulatory tone. The U.S. Senate has confirmed Travis Hill as Chair of the Federal Deposit Insurance Corporation. Hill, previously FDIC Vice Chair, has been a vocal critic of overly burdensome regulation and has emphasized the need for clearer, more predictable supervisory standards, particularly for smaller institutions.
His confirmation comes amid broader regulatory recalibration across federal banking agencies, including efforts to streamline supervision and reassess capital requirements for mid-size banks.
Leadership at the FDIC has real downstream effects on exams, enforcement posture, and supervisory tone. While clearer expectations and a more predictable supervisory approach could ease some compliance friction for well managed community institutions, banks should not expect a pullback from core safety and soundness standards. Staying disciplined on risk management and compliance will remain essential as supervisory priorities evolve.
Read the top 5 pillars of an effective AML program from our Co-Founder and Chief AML Officer Sarah Beth Felix:
Federal banking regulators issued a preliminary draft of a new AI cybersecurity risk profile clarifying how banks should manage risks tied to artificial intelligence as AI becomes embedded in core systems and security operations. The Cybersecurity Framework Profile for Artificial Intelligence builds on previous work by the National Institute of Standards and Technology (NIST). The focus is on managing new vulnerabilities introduced when AI enters an institution’s digital ecosystem.
The draft outlines three priority areas. First, banks are expected to secure AI system components with controls similar to core banking systems, and to verify third party AI models to prevent manipulation. Second, the profile highlights using AI to strengthen cyber defenses, such as automating alert triage in security operations centers. Third, it calls for updating defenses against AI enabled attacks, including deepfake driven social engineering used to trick employees into authorizing fraudulent wire transfers. The NIST is seeking public comments on the preliminary draft until the end of January.
For community banks and credit unions, AI is no longer treated as experimental. Regulators are signaling that AI systems must be governed, secured, and monitored like critical infrastructure, including when tools come from third parties. Institutions using AI for fraud, payments, or compliance should expect closer scrutiny of controls, vendor oversight, and staff training as AI driven risks continue to evolve.
Those expectations are reinforced by a sharp rise in fraud. The FBI reports that banks are facing a surge in account takeover incidents, with reported activity rising by roughly 250 percent. Criminals are using stolen credentials, social engineering, and malware to gain account access, often moving quickly to initiate unauthorized transfers before detection systems can respond.
The spike is occurring alongside expanded digital banking and faster payment capabilities. While these tools improve customer experience, they also widen the attack surface, making account takeover one of the fastest growing and most costly fraud vectors.
Account takeover fraud strains fraud teams, increases reimbursement exposure, and can erode customer trust. The trend underscores the need for layered controls, strong authentication, and heightened monitoring around high risk activities like wires and account changes.
7. Bank M&A Rebounds in 2025 as Strategic Consolidation Regains Momentum
Strategic pressures are also reshaping the competitive landscape. Bank M&A activity rebounded in 2025, with roughly 170 deals announced during the year, and a combined volume of $47 billion. That is up more than a third from the year before.
Among the most consequential deals are Huntington Bancshares’ acquisition of Cadence Bank, the continued integration of Fifth Third Bank and Comerica, and the merger of Pinnacle financial Partners and Synovus Financial, each reshaping competitive dynamics in key markets.
Consolidation is back, but selectively. Well capitalized banks with strong strategy are finding paths forward, while others will feel the ripple effects through competition, correspondent shifts, and customers comparing their experience to larger institutions. Community banks that clarify their long term strategy will be better positioned as these dynamics continue to play out.
Read more about the importance of having multiple correspondent banks to mitigate de-risking:
Finally, even small operational issues are drawing attention. As the circulation of pennies continues to decline, the U.S. Treasury and state policy groups are offering clearer guidance on how cash transactions may be rounded when exact change is unavailable. According to guidance summarized by the National Conference of State Legislatures, retailers should round cash transactions to the nearest five cents based on the final digit of the total price, including taxes.
Under the guidance, totals ending in one, two, six, or seven cents are generally rounded down, while totals ending in three, four, eight, or nine cents are rounded up. The NCSL also notes a narrow exception for very small purchases, advising that transactions totaling exactly $0.01 or $0.02 may be rounded up to $0.05. Importantly, the rounding guidance applies only to cash transactions, not electronic or card payments.
For community banks and credit unions, the penny shortage is more than a curiosity; it shows up in branch operations, cash services, and merchant conversations. Institutions that support local retailers may field questions about coin availability and rounding practices, making it helpful for frontline staff to understand how rounding works in practice. More broadly, the issue underscores the continued shift away from physical cash toward electronic payments, even as community FIs remain an important source of cash services for customers and small businesses.
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