FED UPDATES POLICY TO SUPPORT BANK INNOVATION
🔸 The Fed has retracted its 2023 policy statement that previously restricted the innovative activities of member banks under Fed supervision.
🔸 The old policy required these banks to only engage in activities similar to those of banks supervised by other federal agencies, thereby limiting some new products and services.
🔸 The Fed stated that the financial system and perceptions of innovative products and services have changed, making the 2023 policy no longer suitable.
🔸 The new policy paves a clearer path for both insured and uninsured banks, as long as they are under Fed supervision, to implement innovative activities.
🔸 The Fed is signaling a shift from the mindset of “don’t do” to “prove you can do it safely.” This helps reduce legal uncertainty for banks looking to innovate.
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