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
State Activities
Federal Activities:
On July 4, President Donald Trump signed the “Big, Beautiful Bill,” which included changes to federal student loan policies. The bill reduces the number of repayment plans to two, eliminating income-based options and introducing a fixed-rate program. It sets lifetime borrowing caps of $100,000 for graduate students and $200,000 for medical and law students, while also capping Parent PLUS loans at $65,000. Additionally, the bill limits deferments and forbearance opportunities and eliminates loan forgiveness programs. Borrowers currently in the SAVE program must transition to a new plan by mid-2028 or be automatically enrolled in a discretionary income-based Repayment Assistance Plan. These changes primarily affect new borrowers, leaving existing borrowers largely unaffected. For more information, click here.
On July 3, the Federal Deposit Insurance Corporation (FDIC) released the summer edition of its Consumer Compliance Supervisory Highlights, detailing the results of its 2024 examinations of approximately 2,800 state-chartered banks and thrifts. The report highlights that 97% of these institutions received satisfactory ratings for compliance with federal consumer financial protection laws. The FDIC identified 1,275 violations, with the Truth in Lending Act and the Flood Disaster Protection Act being the most frequently cited. The report also notes a 14% increase in consumer complaints, with credit cards and checking accounts being the most common issues. The FDIC’s enforcement actions in 2024 included $5.6 million in civil penalties and $33.3 million in voluntary restitution to consumers. For more information, click here.
On July 3, U.S. Senator Cynthia Lummis introduced comprehensive digital asset tax legislation aimed at modernizing the tax code to better accommodate the digital economy. The legislation includes a $300 de minimis rule for small transactions, eliminates double taxation for digital asset miners and stakers, and aligns digital asset lending with securities lending rules. It also addresses wash sales, allowing digital assets to be treated similarly to securities, and introduces a mark-to-market election for digital asset traders. Additionally, the bill defers income recognition for mining and staking until the sale of assets and removes appraisal requirements for charitable contributions of actively traded digital assets. Estimated to generate $600 million in revenue over a decade, the bill seeks to simplify compliance and encourage innovation in the digital asset space. For more information, click here.
On July 1, the Treasury Inspector General for Tax Administration (TIGTA) released a report highlighting the need for improvements in tracking and safeguarding seized digital assets by the IRS Criminal Investigation (IRS-CI). The evaluation revealed that IRS-CI often failed to adhere to established guidelines, such as completing seizure memorandums for all digital assets and including essential information in these documents. Additionally, deficiencies were found in the management and safeguarding of seized assets, including inadequate monitoring of virtual wallets for criminal activity and inaccuracies in the Asset Forfeiture Tracking and Retrieval System (AFTRAK). TIGTA made six recommendations to enhance the processes for safeguarding and disposing of seized digital assets, with IRS-CI agreeing to five and partially agreeing to one. These recommendations include ensuring adherence to memorandum requirements, establishing a robust inventory system, and updating internal guidelines to include specific time frames for documentation and record updates. IRS-CI’s partial agreement pertains to preserving the form of seized digital assets, acknowledging potential challenges in returning assets to their original form. For more information, click here.
On June 26, Dan Meuser, chairman of the Subcommittee on Oversight and Investigation, sent a letter to Fred W. Gibson, acting inspector general of the Federal Reserve System and Consumer Financial Protection Bureau (CFPB). The letter requests an investigation into the CFPB under former Director Rohit Chopra, alleging that the CFPB exceeded its statutory mandate and engaged in ideological targeting of businesses. Concerns raised include the expansion of CFPB’s authority under various consumer protection laws and increased coordination with state attorneys general. More recently, the CFPB’s operational capacity was diminished due to the passage of Trump’s “Big Beautiful Bill,” which significantly reduced the funding cap the CFPB can request from the Federal Reserve, thereby limiting its financial resources and regulatory reach. For more information, click here and here.
On June 24, the Department of Housing and Urban Development (HUD) issued a request for information to gather public input on the impact of buy now, pay later (BNPL) lending on housing affordability and stability. The Federal Housing Administration (FHA) is seeking insights to understand how BNPL loans, which are typically zero-interest and repaid in a few installments, might affect borrowers’ financial profiles and the ability of FHA-approved mortgagees to assess long-term homeownership sustainability. This inquiry is part of HUD’s efforts to ensure that FHA single-family mortgage insurance policies remain effective in the evolving financial landscape. Comments are invited until August 25, and will help determine if policy changes are needed to maintain sound mortgage underwriting standards. For more information, click here.
On June 16, the Federal Communications Commission (FCC) issued a proposed rule aimed at enhancing caller ID authentication for non-IP networks. This initiative seeks to mandate that providers relying on non-IP technology implement effective caller ID authentication frameworks, as required by the TRACED Act. The FCC proposes criteria to evaluate these frameworks’ development, availability, and effectiveness, and suggests repealing the current extension from caller ID authentication obligations for non-IP networks. The proposal includes a two-year compliance timeline for providers to either transition to IP networks or adopt non-IP authentication frameworks. Public comments are invited until July 16, with reply comments due by August 15. For more information, click here.
State Activities:
On July 1, the Louisiana legislature enacted House Bill No. 582, which will take effect on August 1. This legislation amends and enacts provisions related to deferred presentment transactions and small loans in Louisiana. It revises definitions, adjusts finance charges and fees, and establishes a new method for calculating the maximum outstanding principal balance. Additionally, the law prohibits certain actions, such as reporting negative customer information to credit bureaus. For more information, click here.
On July 1, the Louisiana legislature enacted the “Louisiana Earned Wage Access Services Act.” This law regulates consumer-directed earned wage access services, establishing definitions and mandating certain actions by service providers, such as clear disclosure of fees and consumer rights, while prohibiting practices like using credit scores for eligibility and charging late fees. Providers must comply with privacy laws and submit annual reports detailing their operations, including revenue and consumer complaints, to the Office of Financial Institutions. Enforcement falls under the Unfair Trade Practices and Consumer Protection Law, with penalties for noncompliance, including nullification of agreements if reports are not timely submitted. The first report is due by March 1, 2027. For more information, click here.
On June 30, Louisiana Governor Jeff Landry signed Senate Bill No. 61 into law. This legislation amends and reenacts sections R.S. 22:1508, 1509, and 1510, focusing on the use of credit information in underwriting or rating certain personal insurance policies. It mandates insurers to disclose credit information obtained during the application process and requires notification to consumers if adverse actions are taken based on such information. Additionally, insurers must file their scoring models with the Department of Insurance for review by the commissioner to ensure compliance. The act will become effective on July 1, 2026. For more information, click here.
On June 30, California Governor Gavin Newsom signed Assembly Bill No. 130 into law, which introduces significant changes to the Civil Code concerning subordinate mortgages. The law requires mortgage servicers to certify compliance with legal requirements before initiating nonjudicial foreclosures and mandates that borrowers be informed of their rights to seek court intervention if they suspect unlawful practices. The law empowers courts to halt foreclosure sales and provide equitable remedies if violations are found, although it maintains the validity of sales to bona fide purchasers despite noncompliance. The law became effective upon signature. For more information, click here.
On June 26, Rhode Island Governor Daniel McKee signed House Bill 5184 into law. This act prohibits credit bureaus from reporting a consumer’s medical debt, thereby shielding individuals from potential negative impacts on their credit scores due to medical expenses. Additionally, the law prevents the filing of execution and attachment against a consumer’s principal residence for judgments based on medical debt, offering further protection to homeowners facing medical financial obligations. Medical debt is defined under this act as any obligation to pay for health care services, products, or devices owed to health care facilities or professionals. The act is set to take effect on January 1, 2026. For more information, click here.
