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Consortium Stablecoin Issuers: How U.S. Regulators Are Enabling Joint Bank Models

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Consortium Stablecoin Issuers: How U.S. Regulators Are Enabling Joint Bank Models As the U.S. regulatory framework for payment stablecoins continues to take shape, one important structural model is emerging: the bank consortium . Rather than launching a stablecoin independently, multiple financial institutions may form a joint vehicle to share the high costs of technology, reserve management, and compliance infrastructure. Recent proposals from the FDIC , NCUA , and OCC indicate that regulators are actively contemplating these consortium structures as a viable pathway for stablecoin issuance under the GENIUS Act of 2025 . The FDIC’s Streamlined Consortium Application Under the FDIC’s proposed 12 CFR Part 303 , banks participating in a stablecoin consortium may submit a single letter application on behalf of all participating FDIC-supervised institutions rather than filing separate submissions for each bank. To qualify for this streamlined filing, the app...
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Regulatory Review: OCC Proposed Rules Under the GENIUS Act

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OCC Proposed Rules Under the GENIUS Act On March 2, 2026, the Office of the Comptroller of the Currency (OCC) issued proposed rules under the Guiding and Establishing National Innovation for U.S. Stablecoins Act (the GENIUS Act ). The proposal is intended to establish a more comprehensive federal framework for the issuance of payment stablecoins and related digital asset activities. Scope and Structure of the Proposed Framework The OCC proposal applies to a defined set of entities under its jurisdiction and is designed to establish a more unified federal framework for stablecoin issuance and related activities. Covered Entities: The proposal applies to national banks and federal savings associations (and their subsidiaries), federal branches of foreign banks , nonbank federal qualified payment stablecoin issuers (FQPSIs) , and certain state-qualified issuers that exceed the $10 billion issuance threshold ...
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Regulatory Review: FDIC vs. NCUA Payment Stablecoin Frameworks

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FDIC vs. NCUA Payment Stablecoin Frameworks The Guiding and Establishing National Innovation for U.S. Stablecoins Act (the GENIUS Act ), enacted on July 18, 2025 , created the first federal framework for “payment stablecoins” . While the Act is now law, its full implementation still depends on final agency rulemaking. As of March 2026 , the FDIC and NCUA have issued diverging proposals on how financial institutions would apply to issue these assets. Comparative Analysis of Proposed Issuer Requirements Feature FDIC Proposal (Banks ) NCUA Proposal (Credit Unions) Primary Applicant The Parent IDI (Bank) Joint filing by Subsidiary and Parent(s) Application Format Narrative letter application Structured Manual with specific forms ...
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FFIEC 002: Identified Losses and No ACL at FBO Branches

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FFIEC 002: Identified Losses and No ACL at FBO Branches U.S. branches and agencies of foreign banking organizations (FBOs) may elect not to maintain an Allowance for Credit Losses (ACL) at the branch level, but that election does not remove the need to identify credit losses and reflect them appropriately in regulatory reporting. For FFIEC 002 purposes, the key concept is that loans and similar assets must be reported net of identified losses, using either charge-offs or specific reserves that function like charge-offs for supervisory and reporting purposes. Regulatory guidance and reporting framework. The Federal Reserve is the primary federal supervisor for U.S. branches and agencies of FBOs and is the recipient of the FFIEC 002 report. The FFIEC 002 instructions and related Federal Reserve supervisory expectations require branches to maintain sound credit risk management and to report assets in a manner that reflects identified losses. Even when a branch does not ...
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Ensuring Accurate EBITDA in Leveraged Lending

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Ensuring Accurate EBITDA in Leveraged Lending Leveraged lending continues to be a focus area for bank regulators due to the heightened credit risk associated with highly indebted borrowers. A key component of leveraged lending analysis is the calculation of EBITDA, which serves as a proxy for a borrower’s ability to service debt. However, some institutions have miscalculated EBITDA by including cash flows from guarantors, leading to inaccurate leverage ratios and improper loan classification. This post outlines regulatory expectations and examiner focus areas related to EBITDA calculations in leveraged lending. Leveraged lending typically involves borrowers with high levels of debt relative to earnings. Regulatory guidance, including the 2013 Interagency Guidance on Leveraged Lending issued jointly by the OCC, Federal Reserve, and FDIC, emphasizes the importance of consistent and accurate risk identification. One of the most common benchmarks used...
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Key Examination Areas for Collateral-Dependent Loans

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Key Examination Areas for Collateral-Dependent Loans Collateral-dependent loans are a common focus during regulatory examinations, particularly when assessing credit risk and loan loss allowances. These loans rely primarily on the sale or operation of collateral for repayment, especially when the borrower is experiencing financial difficulty. Examiners from the OCC, Federal Reserve, and FDIC expect banks to have clear, well-documented processes for identifying, valuing, and managing these loans in accordance with U.S. GAAP and regulatory guidance. This post outlines the core areas examiners typically review and offers practical insights into meeting supervisory expectations. Understanding Collateral-Dependent Loans Under Accounting Standards Codification (ASC) 326-20-35-5, a loan is considered collateral-dependent when repayment is expected to come substantially from the collateral’s operation or sale, and the borrower is experiencing financial difficulty as of the reporting d...
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ACL Measurement for Collateral-Dependent Loans

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ACL Measurement for Collateral-Dependent Loans Allowance for credit losses (ACL) is a critical component of a bank’s financial and regulatory reporting. While U.S. GAAP under ASC 326-20 allows flexibility in how ACL is measured, regulatory reporting requirements are more specific when it comes to collateral-dependent loans. Some banks have mistakenly applied discounted cash flow (DCF) or probability of default/loss given default (PD/LGD) methods to collateral-dependent loans for regulatory reporting. However, regulatory guidance requires that the ACL for these loans be based on the fair value of the collateral. This post clarifies the correct approach and highlights examiner expectations. Under U.S. GAAP, banks may use various methods to estimate expected credit losses, including DCF, loss-rate, roll-rate, or PD/LGD models. However, when a loan is deemed collateral-dependent, the accounting standard permits, but does not require, measurement based on the fair value of the collate...
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