New executive order signals shift in fintech regulations

By Theron Kelso

In May 2026, President Trump signed an executive order titled Integrating financial technology innovation into regulatory frameworks. The EO marks a notable shift in the federal government’s approach to fintech oversight. The directive aims to modernize existing regulations so digital assets and emerging financial technologies can operate more effectively within traditional banking and payment systems.

How the executive order could reshape fintech regulation

The EO could significantly alter the compliance environment for fintech organizations in several key ways:

• Rule modernization: Regulations originally designed for in-person, branch-based banking will be revisited to better align with digital-first financial services.
• Reducing regulatory complexity: The order seeks to address overlapping and inconsistent requirements across agencies that can slow innovation and inadvertently favor heavily capitalized legacy institutions.
• Promoting collaboration: The EO prioritizes creating pathways for product partnerships between fintech firms, traditional banks and regulators.
• Establishing the United States as a fintech leader: By refining its regulatory posture, the U.S. aims to maintain its position as a global leader in financial innovation.

How does the EO impact access to Federal Reserve payment systems?

The Federal Reserve has been directed to evaluate whether non-bank fintech companies should be allowed direct access to its payment accounts and systems.

As part of this review, the Fed will evaluate:

• It’s legal authority to grant access to payment accounts and payment services.
• Existing legal and regulatory constraints that restrict access.
• Whether or not the Fed can expand eligibility.
• If the 12 Federal Reserve Banks can act independently when denying or granting access.

The Fed has 120 days to deliver its findings and recommendations for potential reform.

If policy changes are enacted, they could allow eligible non-bank fintechs to participate directly in core payment infrastructure, significantly reducing or eliminating their reliance on intermediary sponsor banks for clearing and settlement. However, direct participation would also introduce greater operational risk and regulatory accountability, making it essential for firms to fully understand the implications. 

A review of fintech regulations

The executive order also directs leaders of major federal financial regulators — including the SEC, OCC, FDIC, CFPB, CFTC and NCUA — to conduct a comprehensive review of their oversight frameworks within 90 days. 

The purpose of the reviews is to identify:

• Regulations, orders, no-action letters and other items that impede fintech firms from partnering with federally regulated institutions. 
• Regulations that hinder the application processes for fintech firms seeking bank charters, credit union charters, deposit or share insurance and other federal licenses, registrations and authorizations.

Regulators are also instructed to balance innovation interests with safety, consumer and investor protection, market integrity, financial stability and oversight.

Within 180 days, the leaders of these regulators must work with the White House to implement the changes identified in the review.

Expanding definition of fintech

The order adopts a broad description of fintech, defining it as a non-bank entity that uses technology to deliver or support financial products and services. This includes activities such as: 

• Payment processing
• Lending
• Deposit-taking
• Digital banking
• Digital asset-related services
• Securities and commodities market activities
• Blockchain-based services

What are the market implications?

When changes spurred by the EO are put into action, impacts on the market could include:

• More competition: Lower barriers may enable more fintech to challenge traditional institutions.
• Accelerated innovation: Simplified and more consistent regulatory processes could accelerate product development and deployment.
• Expanded financial access: Both customers and businesses stand to benefit from faster payments and broader service options.

While the executive order may create a friendlier environment for fintech growth, it could also introduce new complexities. Fintech firms that enter more heavily regulated areas will face more compliance obligations and need a plan to manage that risk, similar to traditional financial institutions.

Key considerations for fintechs

For fintechs, this executive order represents both opportunity and responsibility. Rather than simplifying the regulatory landscape, it reshapes it.

• Adjusting to regulatory change: Businesses should prepare to revisit licensing strategies, update risk and governance frameworks and stay closely aligned with regulatory developments as agencies implement reforms.
• More growth opportunities: Easier access to partnerships, licenses and potentially payment infrastructure could enable faster expansion.
• Payment infrastructure could be transformative: If direct access to Federal Reserve systems becomes a reality, it would significantly reduce dependencies on traditional banking intermediaries while improving speed and efficiency.
• Regulatory scrutiny will remain: In an environment of accelerated innovation, core areas such as Anti-Money Laundering (AML), Know Your Customer (KYC), cybersecurity and consumer protection will continue to demand strong controls.
• Balancing state and federal regulations: Accounting for evolving federal rules and existing state-level regulations will require strategic legal maneuvering.

At Wipfli, we’re dedicated to helping fintech firms and financial institutions navigate risk and regulatory compliance while continuing to focus on growth. Start a conversation.

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