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President Trump issued Executive Order 14405 (the “Order”) on May 19, 2026 titled Integrating Financial Technology Innovation into Regulatory Frameworks. The Order directs federal financial regulators to review and update regulations, guidance, and supervisory practices to support financial technology innovation and reduce barriers to entry for non‑bank fintech firms. It follows earlier actions establishing federal digital asset policy and a Strategic Bitcoin Reserve.
Stated Policy Objectives
The Order states that it is the policy of the United States to streamline regulatory processes, reduce unnecessary barriers to entry, and promote collaboration among fintech firms, federally regulated financial institutions, and federal financial regulators. It describes fintech firms as contributors to expanded access to financial services and economic opportunity. It also asserts that federal regulations should be updated to support the integration of digital assets and emerging technologies into traditional financial services and payment systems. The Order highlights concerns about fragmented or outdated regulatory requirements that may favor incumbent institutions.
Definition of “Fintech Firm”
The Order defines a fintech firm as any non‑bank company that uses or develops technology to offer or support financial products or services. The definition is broad and includes payment processing, lending, deposit‑taking, derivatives, investment management, brokerage services, underwriting, capital markets activities, custodial and fiduciary services, digital banking, digital asset services, securities and commodities activities, and blockchain‑based services. The Order incorporates by reference the financial activities listed in section 4(k)(4) of the Bank Holding Company Act.
Regulatory Review and Streamlining
Section 3 directs each federal financial regulator, including the CFPB, SEC, NCUA, CFTC, FDIC, and OCC, to conduct a review within 90 days of existing regulations, guidance, supervisory practices, and application processes. The review must identify items that could be updated to facilitate innovation and competition, including those that impede partnerships between fintech firms and federally regulated institutions. Agencies must also identify opportunities to streamline application processes for fintech firms seeking bank or credit union charters, deposit or share insurance, or other federal licenses and registrations.
The Order instructs agencies to balance innovation with safety and soundness, consumer and investor protection, market integrity, financial stability, and oversight. Within 180 days, each regulator is directed to take steps to encourage innovation based on the review, in consultation with the Assistant to the President for Economic Policy.
Access to Federal Reserve Payment Services
Section 4 requests that the Board of Governors of the Federal Reserve System conduct a comprehensive evaluation of the legal, regulatory, and policy framework governing access to Reserve Bank payment accounts and payment services by uninsured depository institutions and non‑bank financial companies, including firms engaged in digital assets and other novel activities. The Federal Reserve is asked to report within 120 days on:
- the legal authority to extend direct access to such firms
- options for expanding access subject to risk management requirements
- legal impediments to direct access and potential legislative or regulatory solutions
- whether individual Reserve Banks may act independently in granting or denying access and what policies should ensure consistent evaluation of applications
If the Federal Reserve determines that existing law permits expanded access, the Order requests that it establish transparent application procedures and make determinations on complete applications within 90 days.
Broader Context
The White House Fact Sheet describes the Order as part of a broader effort to position the United States as a global leader in financial innovation. It asserts that current rules governing access to payment services and third‑party risk management requirements may favor incumbents and that many financial regulations were designed for a brick‑and‑mortar environment. The Administration frames the Order as an attempt to modernize regulatory frameworks to reflect digital‑age financial services.
What This Means for Financial Institutions
Anticipated Regulatory Changes
The 90‑day review period means that by mid‑August 2026, each named regulator must complete its assessment. The 180‑day deadline for taking steps to encourage innovation extends into mid‑November 2026. Institutions should expect proposed rulemakings, updated guidance, or revised supervisory expectations to emerge on that timeline, particularly in areas involving bank‑fintech partnerships and chartering processes.
Third‑Party Risk Management and Bank‑Fintech Partnerships
The Order’s focus on regulations that impede partnerships suggests that existing interagency guidance on third‑party risk management, including the 2023 joint guidance issued by the OCC, FDIC, and Federal Reserve, may be revisited. Institutions with existing or planned fintech partnerships should anticipate potential adjustments to due diligence and oversight expectations. Current requirements remain in effect unless formally amended.
BSA/AML Considerations
Although the Order does not directly address Bank Secrecy Act or anti‑money laundering obligations, the potential expansion of Federal Reserve payment system access to non‑bank fintechs raises questions about the applicable AML/CFT framework for new direct participants. If non‑bank firms gain direct access, regulators will need to clarify whether and how BSA requirements apply. Institutions that currently serve as intermediaries for fintech payment flows should consider how their obligations may shift if those flows move to direct access models.
Federal Reserve Payment System Access
The Federal Reserve’s 120‑day report, expected by mid‑September 2026, will be a key milestone. The evaluation of whether individual Reserve Banks may act independently in granting access, and the emphasis on consistent evaluation standards, indicates concern about the current decentralized approach. Institutions that rely on privileged access to the Federal Reserve payment system as a competitive advantage should monitor this development closely.
Open Questions
Several issues remain unresolved. The Order does not specify what steps regulators must take after completing their reviews, leaving significant discretion to agency leadership. The Order states that it does not create enforceable rights and that implementation is subject to available appropriations. Any expansion of Federal Reserve access to non‑bank entities may require new legislation or a novel interpretation of existing authority under the Federal Reserve Act. Congressional engagement on these issues remains uncertain.
Conclusion
The Executive Order signals a significant policy direction for fintech regulation and the relationship between traditional financial institutions and non‑bank technology firms. Although the Order is primarily directive, the deadlines for regulatory review and Federal Reserve reporting create concrete milestones that will shape the regulatory landscape in the coming months. Financial institutions should evaluate how potential changes to third‑party risk management expectations, chartering processes, and payment system access may affect their operations and partnerships.
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