🇺🇸 FED Updates Policies to Support Banking Innovation

🔸 The Fed has rescinded the policy statement issued in 2023 that limited innovation activities of member banks supervised by the Fed.

🔸 The old policy required these banks to only engage in activities similar to those of other federally supervised banks, thereby restricting certain new products and services.

🔸 The Fed states that the financial system and perceptions of innovative products and services have changed, making the 2023 policy no longer appropriate.

🔸 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 a “don’t do it” mindset to “prove you can do it safely.” This helps reduce legal uncertainty for banks seeking to innovate.
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