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Over my nearly 40 years in public safety, I have seen a dramatic evolution in how public safety handles the ‘paperwork’ side of the job. My career started with punch cards and carbon paper forms in triplicate, moved on to electric typewriters, and eventually, I rode the digital wave as computers, computer software, and various peripherals sought to obliterate pen and paper from our daily lives. I have gone from green screens to graphical interfaces, from floppy disks to CDs and thumb drives, and now, even servers are disappearing as everything seems to be migrating to the cloud. The pace of change has been incredible, and honestly, it has been at times daunting, while also life changing.

In the early days of the digital reformation, back in the mid-1990s, I remember being both excited and a little bit resistant as computer-aided dispatch (CAD) and records management systems (RMS) started making their way into the public safety space. Back then, the technology was still in its infancy—brand new, expensive, and just starting to find its footing in our world. But even in those early days, it was already beginning to reshape how we did business, and I had no way of knowing how significantly those changes would eventually change our operational world.

Forty years might sound like a long time, but the truth is, real momentum in public safety tech has only picked up in the last 20 years. In reality, when it comes to meaningful innovation in law enforcement, the past five to 10 years have been game changing. Tools like body-worn cameras, and now artificial intelligence, are not just new gadgets; they are fundamentally transforming how we operate.

Despite the great strides we have made in developing a myriad of technology-based applications, public safety organizations still face major challenges in finding and implementing CAD and RMS solutions that truly meet their unique operational needs. Although the market is flooded with more software vendors than ever before, and rapid advancements in technology in the last five years have produced a flood of “latest and greatest” solutions, many of these products still fall short of delivering comprehensive functionality and essential analytics across the platform, both of which are cornerstones of operational success.

While a handful of vendors claim to offer “fully customizable” platforms that can be modified to align with our organization’s unique requirements, those promises do not ensure a perfect fit, and many are so cost prohibitive that the organizations who need them the most abandon those options because of fiscal constraints. Even for those organizations who invest in top-tier systems, they still frequently hear a familiar refrain from their teams when asked about the software: “It sucks.”

Honestly, I get it. I have seen systems on the market today that any reputable and knowledgeable tech consultant would deem archaic, considering the level of technology capabilities within the space. Some systems offer just the bare minimum in terms of functionality— at an affordable price—which the overall operational and inefficiency costs cannot offset. Conversely, I have seen top-tier platforms—systems with robust capabilities that can meet or even exceed our needs—that fail to perform at an optimal level.

So why is it that time and again, we still hear the same frustrated utterance from end users:

“This system sucks.”

Why does it seem like so many of our staff members feel this way, and how did we end up in this condition?

Based on my many years of public safety experience and now as part of a national public safety consulting group, I find there are two primary reasons why staff are frustrated with their existing systems:

First, the current system is either homegrown or outdated and cannot meet organizational needs. Though perhaps it was once a top-tier product, technology has advanced, leading to several issues:

• The vendor now promotes a newer product and no longer supports the old one.
• The platform or company was acquired and the product's standing diminished under the new vendor.
• The system is simply too old to remain capable.

Second, we find that poor implementation is to blame:

• Instead of leveraging the new technology to improve various efficiencies, the new system is configured to essentially replicate the agency’s existing processes and workflows, without an assessment of the efficiency or effectiveness of those processes.
• Critical routing, review, and quality assurance processes were not configured properly, resulting in data challenges and inefficiencies.
• Implementation did not leverage cross-system integration and interfaces in an optimal manner.

If the first example is accurate, then your staff are likely correct; you probably need a new system. If they are wrong, however, you may exhaust significant time, resources, and expenses unnecessarily. If the system does not need replacing, but instead, it simply needs to be adjusted to meet your operational needs, this could be a less costly path to pursue, and one that could be accomplished much more quickly.

With that said, how do you know the difference?

How the organization fails their system

When your CAD/RMS is not meeting your needs, the organization needs to ask a critical question from an objective perspective: Is it really the system that sucks, or is it possible that the organization is failing the system.

Organizations can unintentionally pave the way for problems by overlooking key steps and creating a situation where even the most capable system struggles. Not because the technology is flawed, but because of how it is managed and supported internally. Many vendors—with good intentions—will miss critical system architecture and design elements, which diminish the value of the technology implemented. This can occur for several reasons, such as:

1. The organization did not do their due diligence during the evaluation phase. The organization may have rushed the selection process or failed to fully understand what the system could and could not do. Critical features or services they assumed were included may have been left out in the final contract, leading to costly surprises later.
2. The organization did not invest enough people, time, and effort in configuration, implementation, and training. While it seems easy to try to implement a new system with in-house resources, this often leads to problems down the line. Resources are rarely fully dedicated to a project—the project is an ancillary duty. However, these are foundational steps, and cutting corners here almost always leads to long-term issues.
3. The system was never implemented to its full capacity. Organizations often stop short of leveraging all the tools and features available to them, even though the system has the features built in. Whether due to lack of time, lack of training or expertise, resistance to change, or internal silos, the result is the same: underutilization.
4. Instead of addressing system issues head-on, the organization created workarounds. These temporary fixes often become permanent problems, undermining the system’s effectiveness.

How the system is failing the organization

In some cases, the organization may not be to blame, and in those cases, it is the system that is not supporting the organization’s needs. The list that follows provides a distinguishing perspective. When one or more of these circumstances exists, it becomes clear that these are not just minor hiccups or inconveniences, they are fundamental shortcomings. This is the moment of realization, where the perception becomes reality that “the system sucks.” The point where you understand the problems go beyond minor deficiencies, user error, or inadequate organizational support. Sometimes, these gaps cannot be bridged, no matter how much effort, training, or workarounds you throw at them. In these cases, it is not that the organization dropped the ball; it is that the system itself is failing to deliver.

The platform simply lacks the necessary capabilities or support to meet the organization’s needs, and no amount of internal process improvement, reconfiguration, or updates will ever change that. This is where you need to recognize that the problem is rooted in the technology, and overcoming these deficiencies may not be possible without moving on to a new solution.

1. The system lacks critical functionality: First and foremost, the platform fails to deliver essential features needed for day-to-day operations. It truly does not have the capabilities built into the system to meet operational needs. What once satisfied the organization’s needs, now struggles to support its expanding operations and evolving demands. The platform lags behind modern technology standards and user experience expectations.
2. Integrations and interfaces do not work or were never implemented: Promised integrations or interfaces either malfunction, underperform, or were never fully deployed.
3. Promised future features never materialized: Vendors often fail to deliver on “roadmap” commitments, leaving key features perpetually “in development.”
4. The system became a secondary product after acquisition: Following a corporate acquisition, the system or platform is deprioritized by the new vendor, receiving minimal updates or innovation, or is decommissioned altogether.
5. Customer support is ineffective: Support is slow, unresponsive, or unable to resolve issues in a timely or satisfactory manner.

So, where do you go from here? It may be time to evaluate where you are and where you want to go.

This assessment tool is a valuable and proactive step toward making well-informed decisions about your organization’s future CAD/RMS technology needs. Through this quick assessment of your current system, you will gain insight into whether investing in a new platform is justified or if strategic improvements to your existing system could address your operational needs.

After examining both sides, you should have a clearer picture about whether your organization is failing the system, or the system is failing your organization (or in some cases, both may be true). This is where a critical evaluation should begin, and a deeper understanding of where you should focus your efforts needs to be determined. It is possible that now is the time to start looking for a new system—then again, maybe not. Going through an evaluative process can help you determine whether investing in your current system is the right choice, and that decision could result in substantial cost and time savings to your organization.

Key takeaways 

• Differentiate between system limitations and implementation challenges before pursuing replacement 
• Assess how workflows, training, and governance affect CAD and RMS performance 
• Avoid treating system replacement as a default solution to user frustration 
• Use objective evaluation criteria to support defensible technology decisions 
• Plan next steps based on operational needs rather than assumptions 

How BerryDunn can help

BerryDunn helps public safety and local government organizations evaluate, optimize, and plan for their CAD and RMS environments. Our team brings objective insight and deep operational experience to help agencies make informed technology decisions that align systems, processes, and people. Learn more about our team and services. 

Read this if you are a CEO, CFO, COO, or a revenue cycle or payer contracting executive at a provider, medical practice, or hospital that would like to leverage federal health transparency contracted rate data to negotiate better rates. 

Did you know that the contracted rates paid by commercial payers—to you and your competitors—are publicly available? In compliance with federal price transparency requirements, commercial insurers publish detailed, machine‑readable files containing negotiated rates for every provider, CPT code, and plan. These aren’t estimates or survey data—they’re the actual contracted rates, confirmed by providers who have compared them against their own EOBs. 

So why isn’t the data being leveraged? The files are massive—more than 1.5 petabytes of new data published every month, which is the equivalent of roughly 24,000 fully loaded iPhones' worth of raw data. This scale makes it nearly impossible for patients or clinicians to download or analyze the information. Payers and savvy providers, however, can. 

This leads to a simple question: Do you have the data to guide your next negotiation, or are you making decisions based on assumptions?

How transparency data can support contract discussions 

For providers with the necessary technology to leverage these files, pricing transparency has fundamentally changed the balance of information in payer negotiations. Every tax ID's contracted rates—down to routine codes like 99213—are visible in the published files. Regardless of your payment methodology (i.e., fee schedule, percent of charge, DRG), the files disclose the method and the exact rates. 

Your negotiation counterpart can already see how your rates compare to others in your market, how far above or below Medicare you're paid, and where you sit relative to the highest-paid providers in your geographic market. Gaining access to this data and understanding how to interpret the information can put you on a more level playing field.

Available data in transparency files 

These files from insurer transparency portals contain a wealth of data you can leverage for your next negotiation and development of organizational strategy. They typically include: 

• Pricing from 176+ commercial insurers, including all four national carriers (United, Cigna, Aetna, Anthem), the full BCBS ecosystem of 46 plans and 100+ regional payers 
• 10,000+ insurance plans across all 50 states 
• 4 million+ healthcare providers and organizations 
• All billable code types (i.e., CPT, HCPCS, J-codes, MS-DRG, Revenue Codes, NDC) 
• Historical data from August 2023 onward, refreshed monthly 

With the right resources and support, this raw data can be transformed into clear, usable intelligence—not spreadsheets measured in terabytes, but interactive tables and visualizations that decision-makers can act on. 

Practical applications: From data to strategy 

1. Data-enabled, expert-supported contracting
Transparency data enables providers to benchmark their reimbursement against the entire local market—not just anecdotal peers or outdated surveys. 

Using market-level analytics, providers can: 

• See the full distribution of rates as a percentage of Medicare. 
• Identify the highest-paid providers in their market. 
• Understand exactly where their own contracts fall—clearly highlighted within the market. 

This turns negotiations from opinion-based discussions into fact-based strategy. Instead of asking for "more," providers can demonstrate precisely where their rates fall short of market norms and justify targeted counterproposals with objective data. 

However, rate is not the only important contract factor. While rates determine how much you are paid, contract language determines whether, when, and under what conditions you are paid. Strong contract language protects your organization from provisions like unilateral fee schedule changes without written agreement, unreasonable denials and appeal rights, and unfair audit and recoupment policies. 

2. Organization-wide strategic insight 
Pricing transparency isn't just for managed care teams. Hospitals and practices are using this data for: 

• Market intelligence: Identifying competitors with unusually high or low rates, and spotting acquisition or partnership opportunities.
• RCM validation: Confirming payer remittances automatically match contracted amounts. 
• IDR support: Establishing Qualified Payment Amount (QPA) benchmarks using real in-network rates. 
• ACO analysis: Assessing the reimbursement impact of ACO participation. 

For independent practices, this insight is especially critical. Independent providers are key to a healthy, competitive healthcare market, but only when they're negotiating on equal footing.

3. Community transparency and trust 
Transparency data also supports the broader organizational mission of accountability to the communities you serve. 

Understanding how rates vary across markets allows organizations to: 

• Explain pricing differences clearly and confidently. 
• Align reimbursement strategy with access and sustainability goals. 
• Participate more meaningfully in local and regional healthcare discussions. 

When providers understand their own data, they're better positioned to lead—rather than react—to transparency. 

Transparency data in action: A real-world example 

In one dermatology practice, transparency data revealed that routine office visit codes were reimbursed well below market, despite strong outcomes and patient demand. Armed with objective benchmarks, the practice entered negotiations with clear targets tied to the top quartile of local rates. The result was not just improved reimbursement, but a clearer long-term contracting strategy aligned with the practice's growth plans.

BerryDunn can help 

In the next five to 10 years, transparency data is likely to become widely accessible and lose some of its strategic power. Once everyone has it, payers will have no choice but to adopt different contracting strategies. Until then, providers who use this data have a meaningful edge. 

With industry-leading contract expertise, BerryDunn can help you build a strategy that improves both your rates and your contract positions. If your organization is considering using transparency data, our structured approach will provide you with: 

• Visibility into what payers see: The same rate data your counterpart already has 
• Confidence at the negotiating table: Backed by market benchmarks, not guesswork 
• Strategic clarity: Visibility across contracting, growth, and revenue integrity 

To help organizations get started, BerryDunn offers a complimentary sample of market data and a support discussion. Learn more about our services and team.

A new federal executive order aimed at eliminating fraud, waste, and abuse signals a clear shift for healthcare and not-for-profit organizations that receive federal funds. While oversight of federal programs is nothing new, this order formalizes a cross-agency task force and raises expectations around documentation, internal controls, and accountability, particularly for organizations that participate in Medicaid, Medicare, and federal grant and assistance programs.

The message is straightforward: organizations that rely on federal dollars should expect closer scrutiny and should act now to strengthen their compliance posture.

What the new federal executive order means for healthcare and nonprofit organizations

The executive order establishes a task force charged with identifying and reducing fraud, waste, and abuse across all federal benefit, assistance, and grant programs. Importantly, it applies broadly across federal agencies and explicitly includes:

• Federal grants
• Federal assistance programs
• Programs administered directly by federal agencies
• Programs jointly administered with states, such as Medicaid

This means the implications extend well beyond traditional healthcare billing audits. Federally Qualified Health Centers (FQHCs), hospitals, clinics, and not-for-profit organizations that participate in programs such as Head Start, WIC, housing assistance, and other federal grants are all within scope.

Why increased federal oversight matters for federally funded programs now

Federal administrations have long emphasized fraud prevention, but this executive order elevates coordination and enforcement.

Organizations should expect:

• Increased audit activity and agency oversight
• More restrictive language in grant agreements and program participation terms
• Heightened focus on eligibility verification and allowable use of funds
• Greater scrutiny of internal controls and documentation practices

In short, regulators are looking not just at whether policies exist, but whether organizations can prove through documentation that controls are working in practice.

Why documentation and compliance evidence are critical under federal grant oversight

A recurring theme of the executive order is documentation. Policies alone are not enough. Organizations must be able to demonstrate that their controls are consistently followed and supported by evidence.

Key documentation expectations include:

• Evidence of review and approval for grant drawdowns and funding requests
• Documentation supporting patient or beneficiary eligibility
• Proof that expenses charged to grants are allowable and appropriate
• Clinical documentation that supports Medicare and Medicaid billing

For healthcare providers, this reinforces a familiar principle: if it is not documented, it did not happen. The same standard increasingly applies across grant and assistance programs.

Internal controls requirements for federal grants and healthcare programs

The executive order effectively raises the bar on internal controls. While written policies remain important, regulators are focused on whether organizations are applying those controls consistently and correctly.

Strong internal control environments include:

• Clear segregation of duties
• Defined review and approval processes
• Documented evidence of oversight
• Ongoing monitoring and periodic reassessment

For example, if an organization’s policy states that grant drawdowns require supervisory approval, there should be clear documentation showing who reviewed and approved each request.

Controls must be embedded in daily operations, not treated as paperwork exercises.

Subrecipient monitoring risks for federal grants and assistance programs

Organizations that pass federal funds to subrecipients face additional exposure under the executive order. If you receive a grant and distribute funds to partner organizations to meet program objectives, you retain responsibility for compliance.

That includes ensuring subrecipients:

• Follow comparable internal controls
• Maintain adequate documentation
• Meet eligibility and allowability requirements

In practice, this means organizations must actively monitor subrecipients instead of assuming compliance. Weak controls or documentation at the subrecipient level can still result in findings for the primary grant recipient.

Penalties and risks of noncompliance with federal grant and program requirements

The risks associated with inadequate documentation and controls are significant. Depending on the severity of findings, organizations may face:

• Repayment of federal funds
• Financial penalties or damages
• Loss of program eligibility
• Termination from federal programs or grants

In many cases, organizations act as intermediaries, passing federal dollars to beneficiaries. If eligibility documentation is insufficient, the organization, not the beneficiary, bears responsibility for repayment and penalties.

Beyond financial impact, losing eligibility to participate in a major federal program can threaten an organization’s long-term sustainability.

How healthcare and nonprofit organizations should prepare for increased audits

This executive order does not introduce entirely new requirements. It reinforces what organizations should already be doing. However, it creates urgency.

Now is the time to:

• Review and update policies and procedures
• Assess whether controls are implemented consistently in practice
• Identify gaps caused by staff turnover or process changes
• Strengthen documentation standards across programs
• Revisit subrecipient monitoring processes

For many organizations, this is an opportunity to “kick the tires” on compliance programs and make sure documentation aligns with how work actually gets done.

Preparing for increased federal audits, enforcement, and oversight

The federal government is signaling that more oversight is coming. Organizations should expect tighter controls, increased reviews, and less tolerance for undocumented processes.

Preparing now by reinforcing internal controls and documentation can help organizations reduce risk, protect critical funding streams, and demonstrate compliance when auditors come knocking.

The takeaway is clear: it is time to dot the i’s, cross the t’s, and make sure every federal dollar received is fully supported.

Key takeaways

• Federal oversight is increasing. A new executive order establishes a cross-agency task force focused on fraud, waste, and abuse across federal grants, assistance programs, and jointly administered state programs.
• Healthcare and not-for-profits are squarely in scope. Organizations participating in Medicare, Medicaid, FQHC programs, and federal grants or assistance programs should expect heightened scrutiny.
• Documentation matters more than ever. Policies alone are not enough. Organizations must be able to show documented evidence that controls are consistently followed in practice.
• Internal controls must be operational—not theoretical. Review, approval, eligibility verification, and monitoring processes must be embedded in day-to-day operations and supported with clear audit trails.
• Subrecipient compliance is your responsibility. Grant recipients remain accountable for ensuring subrecipients maintain adequate controls and documentation.
• The financial risk is real. Noncompliance can result in repayment of funds, penalties, loss of program eligibility, and the disruption of critical revenue streams.
• Now is the time to act. Organizations should review and update policies, assess control effectiveness, and address gaps before increased enforcement activity begins.

About BerryDunn

BerryDunn is a full-service assurance, tax, and advisory firm serving healthcare organizations and nonprofits nationwide. We work with hospitals, health systems, federally qualified health centers (FQHCs), and mission-driven organizations to navigate complex regulatory, financial, and operational environments.

Our teams bring deep experience in healthcare and nonprofit audits, compliance, and governance, along with specialized grant consulting services that help organizations strengthen internal controls, manage federal funding responsibly, and remain audit-ready. Through a practical, collaborative approach, BerryDunn helps organizations protect critical funding streams and sustain their mission.

Workforce challenges remain one of the biggest threats to rural healthcare sustainability—and they’re not going away on their own. Staffing shortages persist, the workforce continues to age, and demand for care keeps rising. For many rural leaders, this creates a constant state of reaction: hiring under pressure, shuffling roles, and implementing short‑term fixes just to keep services running. 

The organizations making progress are doing something different. Instead of chasing talent in an increasingly competitive market, they’re taking proactive steps to stabilize today’s workforce, grow tomorrow’s pipeline, and remove unnecessary strain from already‑lean teams. That work starts with people, extends into education partnerships, and is reinforced by practical—not experimental—use of technology. 

Strengthening the pipeline through higher education partnerships 

Many rural staffing challenges begin well before recruitment. Clinicians are often trained in urban environments, with limited exposure to rural practice. When it comes time to choose a career path, rural healthcare may feel unfamiliar—or simply unavailable. 

Strategic partnerships with colleges and universities help address this challenge at its source. When rural health systems and academic institutions collaborate, they can recruit students from rural communities, provide early and meaningful rural clinical experiences, expand residency and graduate training capacity, and align education with the realities of rural care delivery. 

These efforts have been shown to improve long‑term retention, particularly for roles that are consistently hard to fill, including primary care physicians, nurses, advanced practice clinicians, behavioral and mental health providers, and key allied health positions. 

These partnerships also create value for academic institutions. Colleges and universities benefit from stronger enrollment pipelines, improved completion and job placement rates, and deeper alignment with regional workforce needs. Faculty gain applied teaching opportunities, students receive hands‑on experience, and institutions reinforce their role as anchor organizations within rural communities. 

The most successful partnerships are built for the long term. Academic partners typically lead curriculum design, accreditation, faculty support, and student recruitment. Health systems contribute paid clinical placements, preceptors, residency or practicum sites, and real‑time insight into workforce demand and care models. Shared funding—through tuition revenue, health system investment, grants, and joint philanthropic support—helps programs remain sustainable. Clear governance structures and shared data ensure these initiatives evolve alongside community needs rather than functioning as one‑time solutions. 

Workforce well-being as a core retention strategy 

Even the strongest workforce pipeline will struggle if today’s clinicians are burned out. Rural healthcare workers face distinct challenges, including chronic understaffing, professional isolation, and limited backup. Many clinicians fill multiple roles while caring for older, higher‑acuity populations. 

Outside the workplace, limited access to childcare, housing, groceries, wellness resources, and other everyday supports can further compound fatigue and burnout. 

Improving retention means addressing both professional and personal realities. Effective strategies often include stabilizing staffing through team‑based care models, optimizing scopes of practice, offering flexible scheduling and protected time off, and investing in community supports such as childcare partnerships, housing assistance, and accessible wellness resources. Equally important are visible leadership engagement, meaningful frontline input into decisions, and opportunities for peer support and professional growth that reduce isolation. 

For rural clinicians, professional success means manageable workloads, access to specialty support, and room to grow. Personal success means being able to build a fulfilling life in the community they serve. When organizations invest in both, careers last longer, retention improves, and communities benefit from greater continuity of care. 

Using AI thoughtfully to relieve—not add to—workforce strain 

As rural health systems look for ways to support overextended teams, artificial intelligence is increasingly part of the conversation. Used well, AI can help reduce workload and administrative burden. Used poorly, it can introduce cost, disruption, and risk. 

In rural settings, the most valuable AI applications tend to be practical rather than cutting‑edge. For example, AI‑enabled decision trees can support centralized scheduling and contact center operations, allowing small teams to accurately route calls and schedule appointments across multiple departments. Embedded visit criteria, provider availability, and location rules reduce training time and cognitive load—an important advantage for lean teams. 

Other proven use cases include ambient clinical documentation, prior authorization support, and selected revenue cycle functions such as coding and denials management. When paired with strong workflows and change management, these tools can meaningfully reduce manual work and after‑hours burden, directly supporting workforce well-being. 

Equally important is knowing what to avoid. Rural organizations are not always the best positioned to act as early adopters or beta testers. Leaders should prioritize vendors with proven healthcare experience, seek references from similar organizations, and favor solutions that integrate with existing systems. Technology works best when it supports optimized operations—not when it is expected to compensate for broken processes. 

An integrated approach to rural healthcare workforce sustainability 

Successful rural healthcare transformation will take more than a single program or policy change. It requires deliberate, coordinated action across care delivery, workforce development, and operations. 

Health systems that invest in workforce well-being can slow burnout and retain the clinicians they already have. Those that build strong partnerships with higher education create a steady pipeline of professionals trained for rural practice. And those that adopt technology thoughtfully can reduce administrative burden and give staff back time and focus for patient care. 

The path forward is clear—but it requires moving beyond crisis management and into long‑term planning. By aligning well-being strategies, education partnerships, and practical innovation, rural health systems can strengthen their workforce today while building a more resilient future for the communities they serve. 

Key takeaways

Rural healthcare workforce sustainability takes action—not quick fixes 

Address staffing challenges at the source. 
Higher education partnerships help build a local, long‑term workforce pipeline aligned with rural realities. 

Treat well-being as a retention strategy. 
Flexible scheduling, team‑based care, leadership visibility, and community supports reduce burnout and improve retention. 

Use AI to simplify work, not complicate it. 
Focus on proven, practical tools that reduce administrative burden and integrate with existing systems. 

Avoid being an early adopter. 
Rural organizations benefit most from solutions with established healthcare track records and peer validation. 

Connect today’s needs with tomorrow’s workforce. 
Sustainable progress happens when well-being, education, and operations work together. 

Rural healthcare transformation consulting

Our experienced consultants have decades of expertise advising rural healthcare providers. We partner with clients to deliver rural healthcare transformation services that are practical, compliant, and sustainable—grounded in firsthand experience with rural delivery models, workforce constraints, and community needs, and aligned with CMS requirements. Learn more about our services and team. 

There has been a recent flurry of proposals surrounding payment stablecoin regulation. In March and April 2026, the Office of the Comptroller of the Currency (OCC) and Federal Deposit Insurance Corporation (FDIC) issued Notices of Proposed Rulemaking (NPR) to implement major provisions of the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act. While this article focuses on the OCC and FDIC proposals, the US Department of the Treasury, the Financial Crimes Enforcement Network, and the Office of Foreign Assets Control have also issued recent proposals on implementing the GENIUS Act.  

The OCC and FDIC proposals, among other reforms, establish regulatory frameworks for the issuance of payment stablecoins. While the OCC proposal is broader and more prescriptive, reflecting its role as the primary regulator for national banks, federal savings associations, nonbank federal issuers, and foreign payment stablecoin issuers, the FDIC proposal is narrower and more bank-centric, focusing on FDIC-supervised insured depository institutions (IDI) and their payment stablecoin subsidiaries. The FDIC proposal also clarifies deposit insurance treatment for stablecoin reserve deposits and affirms how tokenized deposits are treated under existing deposit insurance rules.

While many community banks may not be planning to issue payment stablecoins in the near term, the proposed rules remain relevant because they: 

• Define the permissible role of community banks in the digital asset ecosystem 
• Signal how stablecoins and tokenized deposits may coexist with traditional banking 
• Clarify deposit insurance boundaries, reducing regulatory ambiguity

Key takeaways from the NPRs 

There are five main considerations from the NPRs. Comments on the OCC’s proposal are due by May 1, 2026, and comments on the FDIC’s proposal are due by June 9, 2026. 

1. A new federal framework for payment stablecoin issuance 

The proposed rules operationalize the GENIUS Act by creating detailed standards for Permitted Payment Stablecoin Issuers (PPSIs)—entities approved to issue payment stablecoins. For FDIC-supervised institutions, a PPSI must be a subsidiary of an IDI and is subject to full FDIC supervision. 

Key policy guardrails include: 

• Narrowly defined activities limited largely to issuing and redeeming payment stablecoins, managing required reserves, and providing related custody services 
• Strict one-to-one reserve backing, requiring each outstanding stablecoin to be fully supported by highly liquid assets
• Explicit prohibitions against paying interest or yield to stablecoin holders, preventing payment stablecoins from functioning as deposit substitutes
• Under the FDIC’s NPR, PPSIs are prohibited from providing credit to their customers to purchase payment stablecoins. The OCC’s NPR does not explicitly prohibit this activity. 
• PPSIs are generally required to redeem a payment stablecoin within two business days. 

For community banks, the structure reinforces that stablecoin issuance is not a casual extension of deposit-taking, but rather a regulated, capital-sensitive activity requiring governance, systems, and risk management comparable to other significant lines of business. 

2. Reserve assets: Conservative by design 

One of the most consequential aspects of the proposals is their treatment of reserve assets backing payment stablecoins. The OCC and FDIC propose a conservative list of eligible reserve assets, including: 

• Cash and balances at Federal Reserve Banks 
• Demand deposits at insured institutions 
• Short-term US Treasury securities (93 days or less) 
• Certain Treasury-backed repurchase and reverse repurchase agreements 
• Certain securities issued by registered investment companies invested solely in otherwise permitted reserve assets 

Reserve assets must be: 

• Valued at fair value (with cash at par)
• Identifiable and segregated, particularly if multiple stablecoin “brands” are issued
• Continuously monitored to ensure reserves never fall below outstanding issuance
• Published on the PPSI’s website monthly, with the report examined by a registered public accounting firm. Under the FDIC’s NPR, the registered public accounting firm will issue a written report of findings to the PPSI’s audit committee, or board of directors, if there is no audit committee. Both proposals also require confidential reporting on reserve assets, among other information, weekly, as well as quarterly reports of financial condition.

For community banks, this matters even if the bank does not issue stablecoins. Banks may be asked to hold reserves on behalf of PPSIs, creating potentially large, volatile deposit balances with specific operational and liquidity considerations. Both proposals explicitly seek comment on whether various limits should apply to stablecoin reserve deposits to mitigate safety and soundness risks.

3. Deposit insurance clarified: No pass-through coverage 

The FDIC’s NPR squarely addresses an area of confusion by proposing amendments to the FDIC’s deposit insurance rules. Under the proposal: 

• Deposits held as reserve assets for payment stablecoins are insured only to the PPSI, as corporate deposits 
• Payment stablecoin holders do not receive pass-through FDIC insurance 
• Reserve deposits are aggregated with other deposits of the PPSI at the same bank and insured up to the standard $250,000 limit 

This clarification reinforces an important principle for banks: payment stablecoins are not insured deposits, and banks must avoid marketing or structuring arrangements that imply otherwise. The proposal aligns deposit insurance treatment with the GENIUS Act’s prohibition against representing stablecoins as FDIC-insured.

4. Tokenized deposits remain deposits 

Separately, the FDIC uses this rulemaking to confirm that tokenized deposits are still deposits for purposes of the Federal Deposit Insurance Act. The form of recordkeeping—whether traditional or distributed ledger-based—does not change the legal status of a deposit. 

This is a significant assurance for community banks exploring: 

• Distributed ledger technology for internal settlement 
• Tokenized representations of deposit balances 
• Real-time or programmable payment innovations 

As long as the product meets the statutory definition of a “deposit,” it remains eligible for FDIC insurance and depositor preference, regardless of the technology used. 

5. Capital, governance, and operational expectations 

The proposals set meaningful expectations around: 

• Capital planning, including a $5 million minimum for de novo PPSIs and ongoing capital commensurate with risk 
• An operational backstop equal to 12 months of expenses, separate from reserve assets 
• Robust risk management, IT security, AML, and audit requirements, many modeled on existing banking standards 

Importantly, the OCC and FDIC also propose to deconsolidate PPSI subsidiaries for regulatory capital purposes, ensuring that parent banks are not required to hold capital in excess of what the PPSI itself must maintain—while reserving supervisory authority to prevent “capital arbitrage.” 

What community banks should do now 

Even if stablecoin issuance is not imminent, community banks should: 

• Assess potential exposure to stablecoin reserve deposits and custodial activities 
• Monitor how peers and core providers are engaging with tokenization and stablecoin infrastructure 
• Ensure marketing and disclosures clearly distinguish deposits from non-deposit digital assets 

The proposals make clear that stablecoins will coexist with the banking system—but firmly within traditional prudential boundaries. For community banks, the rule offers clarity, guardrails, and opportunity, while underscoring that innovation must be anchored in safety, soundness, and transparency. As always, please don’t hesitate to reach out to your BerryDunn team if you have any questions.