By Monica C. Meinert
After years of playing defense against an onslaught of misguided, poorly tailored regulation, the tides have turned at last, and the banking industry is now in a position to advance the ball in a positive direction for the nation’s banks, ABA President and CEO Rob Nichols told bankers in December during the annual meeting of ABA’s Government Relations Council in Washington, D.C.
With a new crop of leaders in Washington now firmly in place, and with an effort to right-size regulation underway, the banking sector is well-positioned heading into 2026, even as some new and old challenges remain on the policy radar.
A productive 2025
In Nichols’ own words, 2025 was a highly productive year for the banking sector.
On the legislative side, the industry notched several key victories, including securing several critical tax provisions in the budget reconciliation bill, including a permanent Section 199A deduction, the enactment of a modified version of the Access to Credit for our Rural Economy Act (or ACRE), a longstanding ABA priority, and the extension and enhancement of several tax credits. In addition, ABA advocacy helped keep several problematic provisions out of the final bill, including a bank tax, a financial transaction tax, and proposals to limit the deduction for corporate state and local taxes paid.
ABA played an active role as the Genius Act setting stablecoin rules moved through Congress, focusing its efforts on maintaining a level playing field between banks and stablecoin providers. Banker advocacy led to a ban on interest paid by stablecoin issuers, limitations on non-financial companies’ ability to issue stablecoins, a confirmation that deposit insurance will not be extended to stablecoins, and further clarity around bank use of tokenized deposits.
Separately, ABA also succeeded in moving a bipartisan bill to prevent credit reporting firms from selling mortgage applicant information to lenders who then barrage those same consumers with unwanted solicitations.
On the regulatory front, bankers also saw significant progress.
“A year ago, we were facing about 14 different rules from the CFPB and other agencies that were not fit for purpose, were misguided, and were not appropriately tailored,” Nichols notes. “Most of those are now gone, and our industry is on the offense on the regulatory front.”
Among the rules that have been rescinded are the CFPB’s overdraft rule, which was overturned by a Congressional Review Act resolution in Congress; the Dodd-Frank Act Section 1071 rule on small business data collection; and the 2023 Community Reinvestment Act final rule.
As 2025 came to a close, ABA worked to submit comments on changes to the 1071 and 1033 final rules. In November, the CFPB issued a re-proposal of 1071 that, in the words of ABA EVP Ginny O’Neill “is far more modest,” and increases the threshold for reporting data from 100 loans up to 1,000—a move that will exempt significantly more community banks.
These developments, along with the recission of several pieces of problematic guidance, including 67 guidance documents issued by the CFPB under the previous administration, mean bankers are better positioned to serve their customers, clients and communities in 2026.
And the agencies show no signs of slowing down.
Meet the players
The driving force behind the effort to right-size banking regulation is the U.S. Treasury Department, under the leadership of Secretary Scott Bessent.
“We’ve never had a Treasury secretary play as hands-on a role with regard to regulatory right-sizing as Scott Bessent,” Nichols notes. “He is spending more time rationalizing the regulatory architecture than any Treasury secretary in history.”
The effort is yielding positive results for bankers.
“It’s a very different environment,” adds ABA EVP Hugh Carney. “When we talk to regulators now, they’re actually listening. There’s been a dramatic shift in the tone at the top.” In addition, Carney says, “there’s been significant downsizing in staffing at the agencies. “This is changing how the agencies behave.”
No agency has seen more changes since the Trump administration came to power than the long-embattled CFPB. Its current acting director, Russell Vought, who is also the head of the White House Office of Management and Budget, has been on a crusade to dismantle the agency since stepping into the role early in 2025.
He has tried to limit the Bureau’s funding by arguing that it could not draw any more money from the Federal Reserve to fund its operations. A federal judge rejected that claim in January, and the CFPB received $145 million in new funding. It’s still a dramatically different agency today.
“Vought is determined to downsize this agency,” O’Neill says. “Ultimately, the courts are going to have their say in what’s permitted, but that will take a lot of time. In the meantime, the staff has been told ‘pens down.’” She adds: “Vought cannot, on his own, kill this agency. He can reshape it dramatically.”
While the regulatory apparatus in Washington is being reshaped in ways that could have long-term ripple effects for bank regulation, midterms are looming. That could spell potential changes in Congress that trigger more oversight for the agencies and a slowdown in the administration’s regulatory right-sizing.
Areas of opportunity
But ABA policy experts still see a window of opportunity in 2026, and one major opportunity on the agenda is the chance to index regulatory thresholds.
“The election last year was premised on fighting inflation—inflation was top-of-mind,” explains ABA’s Carney. “People understood when we started talking about indexing that a dollar in 1992 is not reflective of what it is today. These ideas have gained traction on Capitol Hill and with regulators.”
One potential hiccup in the process is the potential for a fragmented approach if regulators and lawmakers fail to coordinate their indexing efforts. “However indexing moves forward, we will want a single standard,” Carney says. (ABA continues to advocate for thresholds to be indexed to nominal GDP, as opposed to the Consumer Price Index, which the FDIC recently referenced in a unilateral push to index some of its supervisory thresholds.)
“There is a lot of congressional interest on this issue,” adds Frank Pigulski, ABA VP for congressional relations, with several potential champions. However, “many of the proposals we’re seeing are isolated,” Pigulski notes. “We need them to be broad-based and across the board. We need everything all at once—all the thresholds, including Durbin. We don’t want to have to come back to Congress every few years to get this done.”
As ABA looks to advance these and other priorities in the leadup to the midterms, Nichols emphasizes the importance of ABA’s longstanding commitment to working with anyone and everyone with an interest in building a strong economy, supported by a robust, highly competitive banking sector. “We have to be militantly bipartisan, and we are,” he says.
Old and new challenges
Still, while dynamics have shifted inside the Beltway, Nichols acknowledges that the banking industry still faces some existential challenges in 2026. In particular, “we have more battles with other industrial sectors than we have in a long time.”
Among the most high-profile of these battles is the fight with the “crypto bros” and the new payments players that are emerging and attempting to gain legitimacy and payments system access by seeking bank charters. As 2025 came to a close, the OCC conditionally approved five national trust charters to digital asset companies—a move that prompted ABA to raise public concerns. “We are concerned that expanding the trust charter in this way, particularly for entities that may not engage in traditional fiduciary activities, could blur the lines of what it means to be a bank and create opportunities for regulatory arbitrage,” Nichols says.
It’s a drum ABA will continue to beat as the Senate debates crypto market structure legislation in 2026, and as regulators look to implement the Genius Act, which is set to take effect in 2027. In particular, ABA is pushing for the market structure bill to close a loophole in the Genius Act that some crypto companies are using to offer interest-like “rewards” that threaten to draw away bank deposits.
But while the rules of the road are still being shaped and debated, “what’s important to remember is nobody’s waiting,” says ABA SVP Brooke Ybarra. “Payment stablecoin issuers already do the things they do today. Core providers are not waiting until 2027 to launch their products. There’s a sense of ‘it’s a race, and we need to get out there now.’”
Another friction point lies between banks and telecom companies, who have done a lackluster job at responding to the growing threat of fraud. As banks work to protect their customers, telecoms have failed to do their part to rein in the spoofing of bank names on caller ID
“We need to create a stronger framework to hold these companies accountable and make it more difficult to perpetrate fraud in our names,” says ABA EVP Jess Sharp. “Legislation is going to be a big part of that process.”
The good news is that bipartisan support for the fight against fraud is growing in Congress. Sen. Ruben Gallego (D-Ariz.) and Sen. Bernie Moreno (R-Oh.) recently introduced a bill to require social media companies to take down ads that result in fraud or help bad actors perpetrate fraud.
“There are lots of potential dance partners,” Sharp notes. “The challenge is going to be focusing on a couple high-value solutions and using all the tools in the toolbox to go get them.” Banker advocacy will be critical to advancing potential solutions, and he encourages bankers to engage with their lawmakers and be active in responding to ABA grassroots alerts. “It’s going to be a big year in the fight against fraud.”
Early 2026 has also revived some old policy challenges in the credit card space. Previously attempted proposals imposing interest rate caps and government routing mandates are back on the threat list. ABA is already busy using facts and data to show that the proposals will “harm the very people they are intended to help,” says Nichols.
Moving the chains
As the industry begins a fast-paced, high-stakes year, ABA and its members will have a critical role to play in shaping the future of banking policy in the U.S. As the only banking trade group representing banks of all sizes, “we’ll sometimes get calls from the White House, from Treasury, or from the Hill that the other trades won’t, because they want the view of the whole sector,” Nichols says.
From a strategy perspective, he notes that “our starting point on major initiatives is to try and get everyone together,” including banking trades of all stripes.
The rationale behind that approach is simple: “When we’re balkanized and divided, we’re weaker,” he says. “When the banking sector is united and aligned, we’re stronger.”
