Trump moves up federal quantum-encryption deadlines; How the federal student-loan overhaul may impact banks—and more top stories in Bank Hours - LinkedIn

Sign up here to receive American Banker's complete Bankers' Hours newsletter — delivered to your inbox every morning. Trump moves up federal quantum-encryption deadlines The federal government recently shortened its deadlines for replacing the encryption that guards sensitive data, responding to a year of research that suggests computers able to break today's codes are coming faster than experts previously expected. President Trump signed two executive orders on the subject on June 22. One focused on defense, titled "Securing the Nation Against Advanced Cryptographic Attacks," sets earlier deadlines for federal agencies to move their most sensitive systems onto encryption a quantum computer cannot crack. Banks are not named in the order, and it does not require them to do anything, but the financial industry runs on exactly the kind of encryption the order is racing to replace. More here. How the federal student-loan overhaul may impact banks Extensive changes to the federal student-loan program, authored last year by congressional Republicans, took effect last week. Among the revisions: the Graduate Plus loan program, which many Americans have long tapped to pay for graduate school, is being phased out. There are new caps on the amount of borrowing allowed for graduate students, though the limits are higher for students heading into certain professional fields. There are also new caps on the allowable amount of borrowing by parents. The $10.8 billion private student-loan market is expected to grow substantially, potentially offering a new opportunity for big banks, several of which exited the market over the last 10 to 15 years. More here. Okla. bank pounces on court-ordered sale of shares in N.M. rival A community bank in Oklahoma is on the verge of acquiring a New Mexico competitor, thanks to a complex legal saga involving a shareholder with massive debts. Bank7 Corp., the Oklahoma City parent company of Bank7, has entered an agreement to buy 71% of Century Financial Services Corp., the Santa Fe-based owner of Century Bank. The purchase — which is not yet final — would increase Bank7's total assets from $1.9 billion to $3.4 billion, as well as expand its footprint into New Mexico. "I think it's a very compelling opportunity for them." — Piper Sandler analyst Nathan Race. More here. Sign up here to receive American Banker's complete Bankers' Hours newsletter — delivered to your inbox every morning. Bowman: Low-risk AI usage should get lighter regulatory touch The Federal Reserve's top regulator said she is steering global regulatory standards around artificial intelligence toward a framework that is tailored based on bank size and riskiness.  Fed Vice Chair for Supervision Michelle Bowman addressed the topic of AI while introducing a new report on best practices for AI adoption from the Financial Stability Board — a transnational regulatory policy group — on Tuesday morning.  "We need to ensure these practices support responsible innovation across the financial system while maintaining appropriate safeguards, especially for higher-risk applications." — Michelle Bowman, Federal Reserve vice chair for supervision. More here. Tokenized deposits may be coming, but it's not a slam-dunk Prudential regulators and the Securities and Exchange Commission appear to be moving closer to establishing rules for tokenized bank deposits sometime next year, which would allow banks to offer blockchain-based deposits at scale and compete more directly with crypto firms. Market observers said that timeline is achievable and could mark a significant step forward for the banking industry, though key regulatory and operational questions remain unresolved.  "This gives banks another tool in their toolbox to be able to compete with crypto and fintech firms, which helps banks and potentially levels the playing field." —Graham Steele, University of North Carolina Chapel Hill School of Law. More here. Sign up here to receive American Banker's complete Bankers' Hours newsletter — delivered to your inbox every morning.