Maryland Legal Alert for Financial Services

In This Issue

FDIC Introduces Two-Phase Approach for Deposit Insurance Applications

Corporate Transparency Act Update: Final Rule Provides Permanent Exemptions from Beneficial Ownership Information Reporting

CFPB Ends Publication of Unverified Consumer Complaint Narratives in Consumer Complaint Database

FDIC Introduces Two-Phase Approach for Deposit Insurance Applications

On August 10, 2026, the Federal Deposit Insurance Corporation (FDIC) announced a new two-phase approach for evaluating deposit insurance applications to encourage new bank formations and make the application process more efficient. The FDIC will now place greater emphasis on preparation before filing. Additionally, applicants must simultaneously submit application materials to the FDIC and the Office of the Comptroller of Currency or other applicable state chartering authority.

Phase 1: Applicants must submit a comprehensive business plan, credible financial projections with supporting assumptions for the first three years of operations, and the identities of qualified management and directors. The FDIC will issue a contingent authorization within 120 days of receiving a substantially completed application. 

Phase 2: Within 12 months following the contingent authorization, applicants must submit supplementary materials as specified in the revised provisions, including final organizational documents, final risk management and compliance policies and procedures, internal operating controls, updated financial projections, and additional required documentation. Applicants are encouraged to submit materials on a rolling basis as they become available to facilitate timely ongoing review. Once an applicant notifies the FDIC that the institution is ready to commence operations, the FDIC will verify that all pre-opening conditions have been satisfied.

Applicants are strongly encouraged to meet with FDIC staff and other applicable regulatory agencies prior to filing a Phase 1 application to facilitate open communication. Throughout the process, the FDIC coordinates with other regulatory agencies regarding the application. The FDIC expects applicants to submit robust and complete Phase 1 applications. Applicants should not rely on post-filing revisions to cure or supplement deficiencies in Phase 1 applications. 

For specific required documents in Phase 1 and Phase 2, please refer to the FDIC’s guidance on its two-phase approach for processing deposit insurance applications: FDIC’s Two-Phase Approach for Processing Deposit Insurance Applications. 

For more information concerning this topic, please contact Christopher R. Rahl or Peri L. Schuster.  

Contact Christopher R. Rahl | 410-576-4222

Contact Peri L. Schuster | 410-576-4005

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Corporate Transparency Act Update: Final Rule Provides Permanent Exemptions from Beneficial Ownership Information Reporting

The United States Congress passed the Corporate Transparency Act (CTA) in 2021 to combat money laundering, terrorist financing, tax fraud, and other illicit activities. Among other provisions, the CTA provides that “reporting companies”—corporations, limited liability companies, and other entities created by the filing of a document with a state’s secretary of state or similar office—must file beneficial ownership information (BOI) reports containing information regarding their beneficial owners and key decision makers with the Financial Crimes Enforcement Network (FinCEN), a division of the U.S. Treasury Department.

The CTA’s reporting requirements became effective on January 1, 2024, but were ultimately suspended by FinCEN on March 2, 2025, in an announcement that followed two nationwide injunctions issued by federal district courts in litigation challenging the CTA’s constitutionality. That suspension was formalized on March 26, 2025, in an interim final rule (Interim Rule) redefining “reporting company” that effectively exempted the vast majority of corporations, LLCs, and similar entities from the BOI reporting requirements applicable to U.S. persons.

FinCEN has now issued a final rule (Final Rule) superseding the Interim Rule and further curtailing the BOI reporting rules. Effective August 14, 2026, the Final Rule permanently adopts and expands on the Interim Rule with the intent to minimize unnecessary burdens on U.S. persons.

Key provisions of the Final Rule include:

• Exempting domestic reporting companies from BOI reporting requirements;
• Exempting foreign reporting companies from BOI reporting requirements of any U.S. person who is a beneficial owner or company applicant of the foreign reporting company;
• Exempting any foreign pooled investment vehicle from BOI reporting requirements with respect to any U.S. person who exercises substantial control over the entity; and 
• Eliminating the requirement for any U.S. person to update or correct information previously provided to obtain a FinCEN ID, whether as a beneficial owner or company applicant.

Foreign reporting companies remain obligated to report BOI for their non-U.S. person beneficial owners and company applicants. The Interim Rule, as adopted by the Final Rule, allows foreign companies to file their initial or updated BOI reports by the later of 30 days after the date of publication of the Interim Rule (March 26, 2025) or 30 days after their registration to do business in the U.S. Willful violations of this reporting rule may result in a reporting company becoming subject to criminal penalties.
The Final Rule also states that FinCEN will delete from its database previously reported BOI of U.S. domestic entities and persons that, had the Final Rule been in effect as of January 1, 2024, would not have been required to be reported. Public notice will be given upon completion of such deletions from the database.

According to FinCEN, the Final Rule is expected to result in approximately $18 billion saved in reporting costs for exempted domestic reporting companies, U.S. persons, and company applicants.

FinCEN’s issuance of the Final Rule solidifies the significant shift in CTA reporting requirements set forth in the Interim Rule last year, relieving millions of domestic entities and U.S. persons from BOI reporting obligations.

For more information about this topic, please contact Christopher R. Rahl, Peri L. Schuster and James J. McKittrick.

Contact Christopher R. Rahl | 410-576-4222

Contact Peri L. Schuster | 410-576-4005

Contact James J. McKittrick | 410-576-4134

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CFPB Ends Publication of Unverified Consumer Complaint Narratives in Consumer Complaint Database

Since 2015, the Consumer Financial Protection Bureau (CFPB) has been publishing unverified consumer complaint narratives and visualizations in the Consumer Complaint Database (CCD) at its discretion. On August 14, 2026, the CFPB announced its decision to cease publication of unverified consumer complaint narratives. The CFPB explained that this decision was motivated by several concerns: the narratives present one-sided consumer perspectives and fail to provide a balanced and accurate view of the company; publicizing such complaints provides minimal utility, causes confusion, and misleads consumers; and the publications harm the reputations of companies. Many published complaints do not allege violations of the law, and the CFPB’s complaint process does not verify the accuracy of the consumer’s allegations prior to publication. In conclusion, publishing consumer narratives in the CCD provides a biased presentation that does not accurately reflect the full circumstances of each situation.

The CFBP will continue to maintain the CCD in compliance with the Dodd-Frank Wall Street Reform and Consumer Protection Act.

For more information concerning this topic, please contact Christopher R. Rahl or Peri L. Schuster.

Contact Christopher R. Rahl | 410-576-4222

Contact Peri L. Schuster | 410-576-4005

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