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
On March 21, Securities and Exchange Commission (SEC) Acting Chairman Mark T. Uyeda delivered remarks at the inaugural roundtable of the Crypto Task Force in Washington, D.C., addressing the complex legal issues surrounding the classification of crypto assets under federal securities laws. Uyeda highlighted the ongoing challenges in applying the Supreme Court’s “Howey test” to crypto assets, a test originally established in 1946 to determine what constitutes an investment contract. He noted the varying interpretations among courts regarding the nuances of the Howey decision and emphasized the need for clear guidance from the SEC. Uyeda advocated for the use of notice-and-comment rulemaking or explanatory releases, rather than enforcement actions, to provide clarity for market participants. He concluded by expressing his anticipation for the discussions to follow, underscoring the importance of the roundtable in addressing these critical issues. For more information, click here.
On March 20, the Office of the Comptroller of the Currency (OCC) announced that it will no longer examine its regulated institutions for reputation risk. According to the OCC’s “Categories of Risk,” reputation risk is the risk to earnings or capital arising from negative public opinion, which can affect an institution’s ability to establish new relationships or services, or continue servicing existing relationships. The decision to no longer examine reputation risk comes in the wake of the introduction of the Financial Integrity and Regulation Management (FIRM) Act, which aimed to eliminate reputational risk as a component of the supervision of depository institutions. For more information, click here and here.
On March 19, U.S. Representative Maxine Waters (D-CA) wrote to Acting Director Russell Vought of the Consumer Financial Protection Bureau (CFPB) to express profound concern over his March 12 directive instructing CFPB personnel to cease all work related to diversity, equity, and inclusion (DEI). Waters argued that this directive undermines statutory obligations and conflicts with federal principles of fairness and nondiscrimination. She highlighted that the directive violates multiple federal statutes, including the Dodd-Frank Act, the Home Mortgage Disclosure Act (HMDA), and the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA). Waters emphasized that the cessation of DEI-related data collection obstructs the CFPB’s ability to enforce these laws and hinders efforts to combat discriminatory practices. She demanded immediate clarification and rescission of the directive portions that conflict with federal law, and warned of potential congressional oversight action if the directive is pursued further. For more information, click here.
On March 19, the Federal Housing Administration (FHA) issued Mortgagee Letter 2025-08, which rescinds several previous policy changes related to appraisal review and reconsideration of value updates, as well as appraisal fair housing compliance and general appraiser requirements. Specifically, this letter rescinds the policies outlined in Mortgagee Letters 2024-07, 2024-16, and 2021-27, effectively restoring the previous guidelines. The rescission is part of an effort to reduce regulatory burdens and align with the administration’s broader goals to foster economic stability. The changes are effective immediately and will be incorporated into the forthcoming update of the U.S. Department of Housing and Urban Development (HUD) Handbook 4000.1. For more information, click here.
On March 17, the OCC announced that it has granted conditional approval for SmartBiz Loans to transform the business model of CenTrust Bank, N.A., located in Northbrook, IL. This approval follows SmartBiz Loans’ acquisition of CenTrust Bank, N.A., which has since been renamed SmartBiz Bank, N.A. The approval allows SmartBiz Bank, N.A. to expand its small business lending activities on a nationwide scale. The OCC’s conditional approval includes several stipulations, including: the bank must notify the San Francisco Supervisory Office at least 60 days in advance of any significant deviations from its business plan and obtain written approval from the OCC; the bank must maintain loan concentrations in line with its business plan; the bank must maintain a tier 1 leverage ratio of no less than 11.0% during its first three years of operation; the bank must receive a $6 million capital injection from its parent company immediately after the transaction’s consummation; the bank must file an Interagency Biographical and Financial Report and receive OCC approval for any new executive officers or directors during its first two years of operation; the bank must submit a draft Community Reinvestment Act (CRA) Strategic Plan within 90 days of the transaction’s closing and a finalized plan within 12 months; the bank must adhere to all representations and commitments made during the application process. For more information, click here.
On March 17, 108 members of Congress sent a letter to HUD Secretary Scott Turner expressing grave concerns over recent actions and plans that threaten HUD’s ability to enforce fair housing and civil rights laws. The letter highlights reports that HUD intends to terminate half of its staff, including 77% of the Office of Fair Housing and Equal Opportunity (FHEO) staff, and has already terminated at least 780 employees. According to letter, these actions, driven by executive orders from the Trump administration, aim to dismantle Diversity, Equity, Inclusion, and Accessibility (DEIA) offices and reduce the federal workforce, posing significant risks to HUD’s statutory obligations. The letter underscores the critical role of FHEO in enforcing various civil rights laws and demands detailed information on staffing levels, planned layoffs, and the impact on HUD’s capacity to enforce fair housing laws. For more information, click here.
On March 14, the U.S. District Court for the District of Maryland issued an order in the case of Mayor and City Council of Baltimore v. CFPB. The court granted the plaintiffs’ motion for leave to file a supplemental reply but denied their motion for a temporary restraining order, which was construed as a motion for a preliminary injunction. The plaintiffs, including the Mayor and City Council of Baltimore and the Economic Action Maryland Fund, sued the CFPB and Vought, in February 2025, arguing that the defunding of the agency violated the Administrative Procedure Act (APA). For more information, click here.
On March 14, William J. Pulte was sworn in as the fifth director of the U.S. Federal Housing Finance Agency (FHFA) during an agency ceremony. Appointed by President Donald J. Trump, Pulte will serve a five-year term overseeing the regulation and conservatorship of Fannie Mae and Freddie Mac, as well as the regulation of the Federal Home Loan Bank System. Pulte emphasized his commitment to ensuring the safety and soundness of the housing markets to make homeownership accessible for more Americans. For more information, click here.
On March 13, the U.S. District Court for the District of Maryland issued a temporary restraining order (TRO) in the case of State of Maryland v. United States Department of Agriculture. The court found that the federal government’s mass termination of probationary employees without providing the required notice to the states violated the reduction in force (RIF) procedures mandated by federal law. The court concluded that these terminations were not based on individualized assessments of employee performance but were instead collective layoffs constituting RIFs. As a result, the court granted the plaintiffs’ motion for a TRO, staying the terminations for 14 days and ordering the reinstatement of the affected employees to their previous positions. The court emphasized the importance of the states receiving advance notice to manage the consequences of mass layoffs and found that the plaintiffs were likely to succeed on the merits of their claims under the APA. For more information, click here.
On March 13, the CFPB submitted a post-summary judgment memorandum in the U.S. District Court for the Northern District of Illinois in the case against FDATR, Inc. The CFPB had alleged that FDATR and its owners violated the Telemarketing Sales Rule (TSR) by engaging in deceptive and abusive telemarketing acts or practices and the Consumer Financial Protection Act of 2010 (CFPA) by engaging in deceptive acts or practices relating to its student-loan debt-relief and credit-repair services. The memorandum was filed in response to the court’s request for additional briefing on restitution and civil money penalties following the granting of summary judgment. The CFPB argued that the Supreme Court’s decisions in Liu v. SEC and SEC v. Jarkesy do not restrict restitution to FDATR’s net profits nor infringe on the Seventh Amendment right to a jury trial for civil money penalties. The CFPB contended that it seeks legal restitution, which should be based on the total harm to consumers, amounting to $2,117,133.28, and that the court is authorized to impose civil money penalties without a jury. The CFPB requested the court to award a civil money penalty of $41,123,897, calculated based on the number of violations and statutory factors. For more information, click here.
On March 13, the Massachusetts Fair Housing Center, Intermountain Fair Housing Council, San Antonio Fair Housing Council, Inc., and Housing Research and Advocacy Center filed a class action lawsuit in the U.S. District Court for the District of Massachusetts against HUD, Turner, the U.S. DOGE Service, and Acting Administrator Amy Gleason. The plaintiffs allege that HUD’s abrupt termination of 78 Fair Housing Initiatives Program (FHIP) grants on February 27, 2025, was arbitrary, capricious, and unlawful, severely impacting their ability to combat housing discrimination. The termination has allegedly forced these organizations to halt critical programming, lay off staff, and face potential closure, undermining their efforts to ensure fair housing. The plaintiffs seek injunctive relief to reinstate the grants and prevent further unlawful terminations. For more information, click here.
On March 11, the Consumer and Governmental Affairs Bureau of the FCC released a public notice seeking comments on a petition filed by the Ecommerce Innovation Alliance and other petitioners. The petition requests a declaratory ruling on whether consumers who have given prior express written consent to receive text messages can claim damages under the TCPA for telemarketing texts received outside the hours of 8:00 a.m. to 9:00 p.m. Additionally, the petitioners seek a waiver of Section 64.1200(c)(1) of the commission’s rules regarding mobile phone solicitations to wireless numbers or, alternatively, clarification on the assumption that the NPA-NXX is indicative of the called party’s location for wireless numbers. Comments are due by April 10, and reply comments by April 25. For more information, click here.
On March 7, the OCC issued a significant update regarding the involvement of national banks and federal savings associations in cryptocurrency activities. Interpretive Letter 1183 reaffirms the permissibility of various crypto-asset activities and aims to streamline the regulatory process for banks engaging in these activities. Interpretive Letter 1183 confirms that national banks and federal savings associations can engage in the following cryptocurrency activities, including: banks are permitted to provide custody services for crypto-assets such as holding and managing digital assets on behalf of customers; banks can hold dollar deposits that serve as reserves backing stablecoins under certain conditions; and banks can act as nodes on distributed ledger networks such as verifying and processing transactions on blockchain networks. One of the most notable changes in Interpretive Letter 1183 is the rescission of the requirement for OCC-supervised institutions to obtain supervisory nonobjection before engaging in the specified cryptocurrency activities. Previously, banks had to demonstrate that they had adequate controls in place and receive explicit approval from the OCC. This change is intended to reduce the regulatory burden on banks and encourage responsible innovation in the cryptocurrency space. For more information, click here.
On March 20, the Arkansas governor signed Act 347 into law, known as the Earned Wage Access Services Act. This legislation aims to regulate earned wage access (EWA) providers, defined to include a person engaged in the business of offering earned wage access, but not an employer that advances a portion of earned wages directly to employees or independent contractors. Under the act, providers are not deemed to be engaging in lending, money transmission, or debt collection if they comply with the act’s requirements, including: implementing procedures to respond to customer questions; disclosing all fees associated with the EWA services and informing consumers of their rights under the agreement before entering into a contract; offering at least one reasonable option to obtain proceeds at no cost; disclosing that tips are voluntary and not contingent on the provision of services; allowing customers to cancel the use of the EWA services at any time without incurring a cancellation fee. For more information, click here.
On March 20, the State of Arkansas enacted Act 343, which amends the Credit Reporting Disclosure Act of 1989. This amendment clarifies the content required for a notice of adverse action. Specifically, Arkansas Code § 4-93-104(a) has been revised to mandate that the notification of adverse action must be in writing and include: a statement of the action taken, the name and address of the creditor, and the name and address of the consumer reporting agency that provided the report. For more information, click here.
On March 18, the Arkansas General Assembly enacted House Bill 1238, amending the statutory foreclosure laws to allow mortgagors to recover reasonable attorney’s fees in certain circumstances. Specifically, under the new Section 18-50-118 of the Arkansas Code, a mortgagor can recover these fees if a court sets aside a statutory foreclosure sale due to the mortgagee’s failure to strictly comply with foreclosure provisions. However, the bill also outlines exceptions where attorney’s fees cannot be awarded, such as when the mortgagor and mortgagee reach a mutual resolution, the mortgagor files for bankruptcy, or the mortgagee acted in good faith under specific conditions. For more information, click here.
On March 17, the District of Columbia, along with 27 states, filed an amicus brief in the case of Insurance Marketing Coalition Limited. v. FCC supporting a petition for rehearing en banc. The petition aims to challenge the Eleventh Circuit panel’s decision that vacated the FCC’s 2023 Order, known as the One-to-One Rule. The 2023 Order adopted a new definition of “prior express written consent” that would have prohibited consumers from giving consent to receive marketing calls from more than one company at a time or about products and services that were not “logically and topically associated with” those promoted on the website. The Eleventh Circuit held that the FCC exceeded its authority under the Telephone Consumer Protection Act because the consent restrictions conflicted with the ordinary meaning of “prior express consent.” In their brief, the amici states claim they have invested substantial resources into combating robocalls through legislation, public-private partnerships, and aggressive legal action. However, the states claim these efforts are hampered by the interstate nature of robocalls. The amici argue that the FCC’s one-to-one consent rule is a vital complement to state efforts. For more information, click here.
On March 17, the Idaho Legislature enacted House Bill No. 149, amending Chapter 31, Title 26 of the Idaho Code to introduce Section 26-31-211A, which provides for consumer privacy in mortgage applications. This new section defines “mortgage trigger leads” and outlines prohibited practices related to the solicitation of consumers for residential mortgage loans based on such leads. Specifically, it mandates clear disclosures about the solicitor’s lack of affiliation with the initial lender or broker and the source of the consumer’s information. It also prohibits using mortgage trigger leads to solicit consumers who have opted out of prescreened offers or are on “do-not-call” lists. Violations of this section are deemed violations of the Idaho Consumer Protection Act. For more information, click here.
On March 13, the Utah Legislature passed H.B. 279, known as the Earned Wage Access (EWA) Services Act. To operate as an EWA provider in Utah, entities must register with the Division of Consumer Protection and comply with several consumer protection measures. Notably, “providers” is defined to include a person engaged in the business of offering earned wage access, but not an employer that advances a portion of earned wages directly to employees or independent contractors. If signed by the Governor, the act will take effect on May 7. For more information, click here.
