May 24, 2026 to May 30, 2026

This is Queen Street Analytics' weekly digest of regulatory developments, legislative discussions and other government-related news for professionals in the financial industry, banking, credit unions, insurance, payment processing, fintech, credit card issuing, asset management, venture capital, private equity, and crypto-currencies. Once a week, we break down the most important updates in this space in under five minutes.

Want to track other GR news in adjacent industries? Don’t miss this week’s updates in ICT & Cybersecurity. Also consider subscribing to our Finance - Ottawa edition covering critical GR news north of the border.

📋 In This Week's Newsletter

• 🏛️ This Week's Congressional Calendar
• 🇺🇸 Federal Government News
• 📜 Legislative Updates
• 📚 What We're Reading This Week

This Week's Congressional Calendar

• House Financial Services Committee to Review Prudential Regulators: The House Financial Services Committee will hold a hearing on 'Oversight of Prudential Regulators' on June 4, 2026, in Rayburn 2128.
• House Subcommittee to Examine Federal Privacy Law Legislation: The House Energy and Commerce Subcommittee on Commerce, Manufacturing, and Trade will convene on June 3, 2026, to review proposed federal privacy and data security law.

Federal Government News

Major Overhaul Proposed to Federal Financial Assistance Regulations

The Office of Management and Budget (OMB) released a proposed rule revising government-wide policies for federal financial assistance, joined by multiple agencies spanning health, defense, and finance. The rule aims to increase transparency and accountability in grantmaking, clarify regulatory structure, and reduce administrative burden for recipients. Substantial changes include eliminating fixed amount awards, revising merit review and risk review processes, introducing discriminatory event services and disparate-impact liability prohibitions, incorporating new requirements on Buy America and procurement practices, restricting federal funding for certain social policy categories, and strengthening fraud controls. The regulation also sets out streamlined framework for uniform updates and public participation. Comments are due July 13, 2026, with final implementation targeting October 1, 2026, for FY2027 awards.

Sources: www.federalregister.gov

Federal Reserve Proposes Payment Account Rules Without Interest, Sets Public Comment Period

The Federal Reserve Board issued a notice of proposed rulemaking to amend Regulation D, formally creating a new category of special-purpose 'Payment Accounts' at Reserve Banks. As proposed, Payment Account holders would be ineligible for interest on account balances and barred from participating in excess balance accounts. The rule is designed to prevent these non-traditional accounts from being used as stores of value or investment, limiting balance sheet expansion. Comments are due by July 27, 2026. Relatedly, potential effects on monetary policy, parity with other accounts, and practical implementation of closing balance limits are specifically raised for feedback.

Sources: www.federalregister.gov

White House Details Multi-Agency Fraud Enforcement and Recovery Actions

The Trump administration announced an expanded crackdown on fraud spanning Medicaid, procurement, immigration, and pandemic relief programs. Initiatives highlighted include suspension of high-risk providers, $1.3 billion in deferred Medicaid reimbursements for California, criminal charges for major fraud rings, launch of a national whistleblower program, and expansion of the DOJ's National Fraud Enforcement Division. Further, over $22 billion in fraudulent pandemic loans were referred for collection by the Small Business Administration. The administration promised further efforts to recover taxpayer funds through audits and targeted enforcement.

Sources: www.whitehouse.gov

Federal Reserve Issues Payment System Risk Policy Proposal: New Payment Account Access and Closing Balance Limits

The Federal Reserve Board published proposed revisions to its Payment System Risk (PSR) Policy and Account Access Guidelines. The changes introduce 'Payment Accounts' for clearing and settling transactions with standardized risk requirements, including a closing balance limit not to exceed $1 billion, no discount window access, no interest paid, and prohibited use for certain services or correspondent relationships. The proposal seeks comment on these parameters, review timelines, BSA/AML compliance duties, and eligibility. The Board notes that legal eligibility for Reserve Bank accounts remains at the Bank's discretion. Public input is sought on operational, risk, and competitive effects.

Sources: www.federalregister.gov

SEC Approves LCH SA Margin and Default Fund Risk Framework Update for CDSClear

The Securities and Exchange Commission approved a rule change by LCH SA to amend the CDSClear risk framework, adjusting how it sets default fund levels and calculates spread margin for credit default swaps. Notable modifications include recalibrating stress scenarios for plausibility, introducing a fixed 10-year rolling lookback period for margin calculations, and updating model documentation per LSEG template standards. According to LCH SA, these updates will decrease the default fund size significantly while continuing to exceed cover-2 standards and maintain margin adequacy.

Sources: www.federalregister.gov

Legislative Updates

Bill to Prohibit Brokers and Investment Advisers With China Ties From Registering With the SEC

Bill 9028 would amend federal securities laws to bar brokers, dealers, and investment advisers with certain connections to the People's Republic of China from registering with the Securities and Exchange Commission. The bill was referred on May 26, 2026, to the House Committee on Financial Services.

Sources: www.congress.gov

Third-Space Renovation Grant Pilot Program Bill Referred to Two Committees

Bill 9032 would direct the Secretary of Commerce to establish a pilot grant program for renovation and development of 'third spaces.' The legislation was referred on May 26, 2026, to both the House Transportation and Infrastructure and Financial Services Committees for consideration.

Sources: www.congress.gov

What We're Reading This Week

• Americans Are Falling Behind on Their $1.25 Trillion Credit-Card Bill: Credit-card delinquency rates have risen as Americans face mounting household debt burdens.
• Consumers Are Struggling. Here's What That Means for the Fed: Rising consumer stress is being watched closely by the Federal Reserve ahead of key monetary policy decisions.
• Private credit roundup: paper losses deepen at lenders: Asset managers are reporting deepening unrecognized losses in the private credit sector.
• Trump Wants to Create More Banks. Many Firms Are Heeding His Call.: An increasing number of fintech and crypto firms are seeking new bank charters under recent policy signals.
• Crypto companies without EU licences face prosecution, French regulator warns: France's regulator cautions that cryptocurrency firms operating without EU licenses may face prosecution.
• Once investor darlings, Australian banks get reality check on mortgage change: Australian banks face shifting investor sentiment as mortgage markets evolve.
• Student Loan Repayments Are Being Overhauled. What Borrowers Should Know.: Student loan repayment options are changing, affecting millions of borrowers nationwide.

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