Worldwide: Financial Services

The Second Circuit's decision upholding preemption of New York's mortgage escrow-interest law conflicts with First and Ninth Circuit rulings, while the OCC has issued regulations siding with the Second Circuit. With certiorari petitions pending and ten states now challenging the OCC's authority, the stage is set for a Supreme Court showdown over the scope of national bank preemption and state consumer financial law authority.

The SEC has proposed rescinding its 2010 pay-to-play rule that restricted political contributions by investment advisers and their employees to government officials. After nearly sixteen years of enforcement, the Commission now characterizes the rule as having "significant unintended consequences" with draconian penalties for minor violations, proposing instead to rely on existing antifraud provisions to address pay-to-play practices.

The OCC and FDIC have announced a final rule that redefines "unsafe or unsound practice" under Section 8 of the Federal Deposit Insurance Act and revises the framework for Matters Requiring Attention (MRAs). Taking effect November 2, 2026, the rule establishes new regulatory standards governing when agencies may identify unsafe or unsound practices, narrowing the scope to focus on material financial risks and compliance with banking laws while creating separate supervisory communications for less significan