The Roundup: State Regulators Nab Former CFPB Staff, FCA Launches Scale-Up Unit, Federal Bank Stress Test Overhaul, “Skinny” Accounts proposed by Governor Waller

Welcome to the PerformLine Regulatory Compliance Roundup, home of the latest news, articles, and reports from our industry, curated for you. Let’s get into it.

In this edition: State Regulators scoop up former CFPB staff, the new FCA Scale-Up Unit, What’s at stake with the new CFPB open banking debate, the Federal Reserve’s bank stress test overhaul, Governor Waller proposes “Skinny” accounts,  and the AFC’s RegTech Revolution webinar you won’t want to miss!

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State regulators snatch up former CFPB staff

State banking regulators are nabbing former staffers of the Consumer Financial Protection Bureau, as they look to bolster consumer protection amid a pullback by the federal agency. State banking departments, including in Illinois and New York, have recently hired employees from the CFPB, which has faced defunding since President Trump took office.  WSJ Risk Journal 

UK Launches Scale-up Unit to Support FinTechs

The UK Chancellor has announced the launch of a new Scale-Up Unit run jointly between the FCA and PRA, aiming to accelerate growth for financial service firms. The Unit will act as a single regulatory touchpoint, offering fast guidance and expert advice so scaling firms can focus on growth, hiring, and investment. This initiative reinforces a critical message for compliance leaders that compliance isn’t just a box to check, it’s a growth enabler. FCA

CFPB Reopens Open Banking Debate: What’s at Stake?

The CFPB’s open banking rule under Section 1033 is facing major shifts as the agency reopens the rule making process, with banks pushing to charge for data access and fintechs arguing consumer control must be preserved. The outcome will determine whether banks or third‑party firms steer the future of financial data sharing and whether compliance becomes a foundation for innovation, or a barrier. American Banker

Fed Moves to Overhaul Bank Stress Tests 

The Federal Reserve voted to advance a major overhaul of its annual stress tests for large banks, offering more transparency into models and scenarios, a move banks have long pushed for. While industry groups call it a win for clarity and capital planning, critics argue the changes could make the tests less credible and weaken bank resilience. Public comments are now open as the regulatory tug-of-war continues. Reuters

A New Era for Payments in the Federal Reserve

Federal Reserve Governor Christopher Waller proposed creating a “payment account”, a simplified version of the Fed’s master account designed to meet the needs of fintechs and other eligible firms focused on payment innovation. Speaking at the Fed’s Payments Innovation Conference, Waller emphasized the central bank must adapt to rapid changes in digital finance and decentralized technologies.

Unlike full master accounts, these “skinny” accounts would offer basic Fed payment services without interest, overdraft protection, or discount window access. They would be capped in size to limit risk to the Fed’s balance sheet and tailored to firms that don’t need the full suite of financial services. Waller noted this is still a prototype idea, and the Fed plans to seek industry feedback soon.

His message to the industry was clear: “Embrace the disruption, don’t avoid it.” Payments Dive

🎙 Upcoming AFC Webinar Wednesday: RegTech Revolution

Don’t miss PerformLine CRO John Zanzarella alongside industry leaders as they explore how innovative RegTech solutions are helping institutions streamline operations, reduce costs, and keep up with evolving regulatory demands. The panel will also unpack how AI is driving new capabilities in monitoring, decision-making, and risk management.

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