To keep you informed of recent activities, below are several of the most significant federal and state events that have influenced the Consumer Financial Services industry over the past week.
Federal Activities:
On February 3, President Trump designated Secretary of the Treasury Scott Bessent as acting director of the Consumer Financial Protection Bureau (CFPB). In the press release announcing his designation, Bessent stated, “I look forward to working with the CFPB to advance President Trump’s agenda to lower costs for the American people and accelerate economic growth.” This move comes after Rohit Chopra, who had been serving as the director of the CFPB since 2021, confirmed his departure in a letter to Trump dated February 1. For more information, click here.
On January 30, the CFPB released its updated list of consumer reporting companies for 2025. The list includes nationwide consumer reporting companies as well as several other companies that focus on specific market areas, consumer segments, and types of users. According to the CFPB, consumers can use the list to know about the kinds of personal financial information that is collected for credit and other consumer reports, request their consumer reporting data, dispute inaccuracies, and block access to their credit reporting data through security freezes. For more information, click here.
On January 29, the CFPB released a report analyzing the auto lending market’s impact on servicemembers. This report indicates that servicemembers face heightened financial challenges in the auto lending market, including higher loan amounts, interest rates, and monthly payments. Despite these challenges, servicemembers were less likely to experience vehicle repossessions. According to the CFPB, debt is especially concerning for servicemembers as it may jeopardize their chance to receive and maintain a national security clearance. In addition, servicemembers who fail to pay their debts also face unique consequences such as military disciplinary action, delayed career progression, and termination from employment. While there are federal protections like the Servicemembers Civil Relief Act (SCRA) and the Military Lending Act (MLA), these have limitations. The SCRA provides protections for obligations created before active duty, and the MLA excludes from its definition of “consumer credit” any credit transaction that is expressly intended to finance the purchase of a motor vehicle when the credit is secured by the vehicle being purchased. For more information, click here.
On January 29, former U.S. Senator Kelly Loeffler appeared before the Senate Committee for her confirmation hearing as Trump’s nominee for administrator of the Small Business Administration (SBA). Loeffler expressed her gratitude for the nomination and emphasized her commitment to supporting America’s 33 million small businesses. Drawing on her extensive experience in business and her tenure in the Senate, she highlighted the critical role small businesses play in the U.S. economy, creating jobs and driving innovation. Loeffler pledged to cut red tape, modernize the SBA, and focus on transparency and accountability. She also committed to addressing disaster relief and empowering entrepreneurs from diverse backgrounds. If confirmed, she aims to restore the SBA’s founding mission of empowering small businesses and fostering economic growth. For more information, click here.
On January 28, Chairman Tim Scott (R-S.C.) announced the formation of working groups within the Senate Banking Committee to address key issues impacting the U.S. economy and Americans nationwide. These groups, led by Banking Committee Republicans, aim to build consensus and advance solutions in several critical areas. The working groups will focus on long-term reauthorization and reform of the National Flood Insurance Program, protecting Main Street investors by reforming the shareholder proposal and proxy advisor process, and enhancing the transparency and efficacy of federal financial regulatory agencies. Senators John Kennedy (R-La.), Mike Rounds (R-S.D.), Bill Hagerty (R-Tenn.), and Thom Tillis (R-N.C.) will lead these initiatives, respectively. For more information, click here.
On January 28, FINRA, a not-for-profit organization dedicated to investor protection and market integrity, published its 2025 Regulatory Oversight Report, providing member firms with critical insights to enhance their compliance programs. The report, which reflects FINRA’s commitment to transparency, covers 24 topics, including new areas such as the third-party risk landscape, sales practice compliance regarding complex products, extended hours trading, artificial intelligence, and investment fraud. It also addresses updates on cybersecurity, Regulation Best Interest, and other key regulatory areas. For more information, click here.
On January 28, Bessent was sworn in as the 79th secretary of the Treasury by Supreme Court Justice Brett M. Kavanaugh. As secretary, Bessent will oversee the Treasury’s mission to maintain a strong economy, foster growth, create job opportunities, and manage the government’s finances, while also strengthening national security by combating economic threats. Bessent brings with him more than 40 years of experience in global investment management and a background in academia and various leadership roles. For more information, click here.
On January 27, the U.S. Court of Appeals for the Fifth Circuit issued a significant opinion vacating the Federal Trade Commission’s (FTC) Combating Auto Retail Scams Trade Regulation Rule (CARS Rule). The decision came in response to a petition filed by the National Automobile Dealers Association (NADA) and the Texas Automobile Dealers Association (TADA), challenging the procedural validity of the rule. The petitioners argued that the FTC violated its own regulations by failing to issue an advance notice of proposed rulemaking (ANPRM) before promulgating the CARS Rule. They also contended that the FTC’s cost-benefit analysis was arbitrary and capricious. The CARS Rule, promulgated by the FTC, aimed to address perceived deceptive practices in the motor vehicle sales industry, including bait-and-switch tactics and “junk fees.” The rule included four main provisions: a prohibition on specific kinds of misrepresentations; a series of disclosure requirements; a prohibition on valueless “add-ons”; and a requirement to obtain express, informed consent from consumers before charging for any item. For more information, click here.
On January 27, the U.S. Attorney’s Office for the Southern District of New York announced that PEKEN GLOBAL LIMITED, the Seychelles-based operator of KuCoin, pled guilty to operating an unlicensed money transmitting business. KuCoin, one of the world’s largest cryptocurrency exchanges, failed to implement effective anti-money laundering (AML) and know-your-customer (KYC) programs, did not report suspicious transactions, and did not register with the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN). As part of the plea agreement, PEKEN will pay nearly $300 million in penalties, exit the U.S. market for at least two years, and remove its founders, Chun Gan and Ke Tang, from any management roles. For more information, click here.
On January 23, Trump signed Executive Order 14178, aimed at strengthening American leadership in digital financial technology. The order outlines policies to support the growth and use of digital assets, blockchain technology, and related innovations while protecting economic liberty. Key provisions include promoting open access to blockchain networks, supporting the development of dollar-backed stablecoins, ensuring fair access to banking services, and providing regulatory clarity. The order also prohibits the establishment and use of Central Bank Digital Currencies (CBDCs) within the U.S. Additionally, it revokes previous executive orders and frameworks related to digital assets and establishes the president’s Working Group on Digital Asset Markets to propose a federal regulatory framework and evaluate the creation of a national digital asset stockpile. For more information, click here.
On January 23, the Securities and Exchange Commission (SEC) published Staff Accounting Bulletin No. 122, which rescinds the interpretive guidance included in Section FF of Topic 5 in the Staff Accounting Bulletin Series, specifically addressing the accounting for obligations to safeguard crypto-assets an entity holds for its platform users (Topic 5.FF). This bulletin, effective January 30, clarifies that the statements in staff accounting bulletins are not rules or official interpretations of the SEC but represent the practices followed by the Division of Corporation Finance and the Office of the Chief Accountant in administering the disclosure requirements of federal securities laws. For more information, click here.
On January 16, Senators Ron Wyden and John Fetterman wrote to then Federal Deposit Insurance Corporation (FDIC) Chairman Martin J. Gruenberg and Vice Chairman Travis Hill, expressing their support for the FDIC’s proposed rule to strengthen recordkeeping for custodial accounts with transactional features. The senators emphasized the importance of this rule in protecting consumers’ access to their savings, particularly in light of the increasing use of fintech accounts as primary banking services. They highlighted the recent issues faced by users of Synapse Financial Technologies, who experienced delays and confusion in accessing their funds due to inadequate recordkeeping. The proposed rule aims to ensure that FDIC-insured depository institutions maintain accurate, daily updated records of the true owners of deposits, thereby safeguarding consumers and enhancing trust in the financial system. The senators urged the FDIC to finalize the rule promptly to address these emerging risks and support the growth of innovative financial services. For more information, click here.
State Activities:
On January 31, lawmakers in Wyoming voted down House Bill 195, which aimed to protect residents’ credit scores from being impacted by medical debt. The bill, presented by Representative Karlee Provenza, D-Laramie, sought to prohibit medical facilities and collection agencies from reporting medical debt to credit bureaus. The committee voted 5-3-1 against the bill, citing concerns from opponents about the potential financial strain on health care facilities and the need for broader health care cost reforms. For more information, click here.
On January 29, the California Privacy Protection Agency’s (CPPA) Enforcement Division reached a settlement with Key Marketing Advantage, LLC (KMA), a Connecticut-based data broker, for failing to register and pay the annual fee required by the Delete Act. The CPPA’s Board unanimously approved the settlement, which includes a $55,800 fine and injunctive terms to ensure compliance. This action is part of an ongoing effort to enforce data broker registration compliance, with businesses facing fines of $200 per day if they fail to register by January 31. The Delete Act mandates data brokers to register and pay fees to fund the California Data Broker Registry and the development of the Delete Request and Opt-Out Platform (DROP), which will allow consumers to delete their personal information from all data brokers with a single request starting in 2026. For more information, click here.
On January 29, the New York City Department of Consumer and Worker Protection (NYC DCWP) published the final rules relating to debt collectors in The City Record. The amended rules take effect October 1. The NYC DCWP also published FAQs to provide general information and guidance on the amended rules. For more information, click here.
On January 23, California Governor Gavin Newsom announced that 270 state-chartered banks, credit unions, and mortgage lenders and servicers have committed to providing mortgage relief for property owners affected by the devastating firestorms in Los Angeles and Ventura Counties. This commitment, which follows a similar announcement by five major lenders, includes a 90-day forbearance on mortgage payments without reporting to credit agencies, as well as additional relief options. The initiative, supported by the California Bankers Association, the California Credit Union League, and the California Mortgage Bankers Association, aims to offer immediate financial relief to impacted homeowners, allowing them to focus on recovery without the burden of mortgage payments. For more information, click here.
On January 22, as part of New York Governor Hochul’s 2025 State of the State, she announced that the New York Department of Financial Services (DFS) has proposed new regulations to enhance consumer protections against unfair overdraft fees. The proposed regulations include prohibitions on charging overdraft fees for transactions under $20, capping the number of daily overdraft fees, and eliminating multiple fees for the same transaction. For more information, click here.
On January 16, the Council of the District of Columbia enacted the “Fairness and Stability in Housing Amendment Act of 2024” (D.C. Act 25-694). Key provisions include establishing a permanent Reverse Mortgage Foreclosure Prevention Program, expanding its coverage to include condominium and homeowners association fees, and extending eligibility to spouses of reverse mortgage holders. The act also updates the Rental Housing Act of 1985 by refining voluntary agreement procedures, removing the mayor’s authority to issue certificates of assurance, and improving the appeals process for rental housing disputes. The act aims to provide greater transparency, efficiency, and fairness in housing-related matters across the district. For more information, click here.
On January 10, the Alaska Legislature introduced Senate Bill 39 that aims to amend the state’s Small Loan Act. This proposed legislation seeks to implement significant changes, including the introduction of a predominant economic interest test, the repeal of Alaska’s payday loan law, and amending the maximum interest rate that can be charged on loans up to $25,000. For more information, click here.