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 May 29, the U.S. District Court for the District of Columbia received a joint stipulation from the Securities and Exchange Commission (SEC) and defendants Binance Holdings Limited, BAM Trading Services Inc., BAM Management US Holdings Inc., and Changpeng Zhao, agreeing to dismiss the civil enforcement action filed by the SEC. Initially charged with various securities law violations, including operating unregistered exchanges and misleading investors, the defendants faced allegations of deceptive practices and evasion of U.S. securities laws. The SEC’s decision to dismiss the case reflects a policy choice and does not indicate its stance in other proceedings. The dismissal is with prejudice concerning the conduct alleged in the amended complaint, and the defendants have waived any rights to seek reimbursement of legal fees related to the litigation. For more information, click here.
On May 29, the SEC’s Division of Corporation Finance issued a statement providing clarity on the application of federal securities laws to certain protocol staking activities within proof-of-stake (PoS) networks. The statement clarifies that staking crypto assets, referred to as “Covered Crypto Assets,” on PoS networks does not constitute the offer and sale of securities under the Securities Act of 1933 or the Securities Exchange Act of 1934. The division’s view covers various staking activities, including self-staking, self-custodial staking with a third party, and custodial arrangements, emphasizing that these activities are administrative or ministerial rather than entrepreneurial or managerial. Consequently, participants in these protocol staking activities are not required to register transactions under the Securities Act or seek exemptions from registration. For more information, click here.
On May 29, House Committee on Financial Services Chairman French Hill introduced the bipartisan Digital Asset Market Clarity (CLARITY) Act, aiming to establish a comprehensive regulatory framework for digital assets in the U.S. Co-sponsored by key figures including House Committee on Agriculture Chairman G.T. Thompson and House Majority Whip Tom Emmer, the legislation seeks to provide long-overdue clarity to the digital asset ecosystem, emphasizing consumer protection and fostering American innovation. The CLARITY Act is designed to protect consumers, promote transparency, and close regulatory gaps, ensuring the U.S. remains a global leader in digital asset innovation. The bill reflects a collaborative effort across party lines to deliver certainty and clarity to digital asset entrepreneurs and markets, supporting a more inclusive financial future. For more information, click here.
On May 28, in the U.S. District Court for the Eastern District of Kentucky, the Consumer Financial Protection Bureau (CFPB) filed a motion to stay proceedings in the case against them by The Monticello Banking Co. and others. The CFPB requested the stay to allow the agency time to conduct a new rulemaking process under § 1071 of the Dodd-Frank Act to reconsider the Small Business Lending Rule issued on March 30, 2023. The CFPB plans to extend compliance deadlines for all regulated entities, potentially postponing the earliest compliance date by one year, and will not prioritize enforcement under the 2023 rule during this period. The CFPB argues that staying the case will conserve court resources and prevent unnecessary litigation, as the new rulemaking could resolve the issues at hand. Despite the plaintiffs’ lack of consent to the motion, the CFPB proposes submitting periodic status reports and conferring with the plaintiffs within 30 days of issuing a final rule to determine the next steps. For more information, click here.
On May 28, the U.S. Department of Labor’s Employee Benefits Security Administration announced the rescission of its 2022 guidance that had previously advised fiduciaries to exercise “extreme care” when considering the inclusion of cryptocurrency options in 401(k) retirement plans. This move marks a return to the department’s historically neutral stance under the Employee Retirement Income Security Act, emphasizing that investment decisions should be made by fiduciaries rather than influenced by governmental directives. For more information, click here.
On May 28, Building Resilient Infrastructure & Developing Greater Equity, Inc. (BRIDGE) filed a complaint in the U.S. District Court for the Middle District of Florida against the CFPB and Russell Vought, in his official capacity as acting director of the CFPB. The complaint challenges the CFPB’s Final PACE Rule, which imposes extensive regulatory requirements on Property Assessed Clean Energy (PACE) financing, a program designed to help homeowners finance energy-efficient and weather-hardening improvements through property tax assessments. BRIDGE argues that the rule exceeds the CFPB’s statutory authority, violates the Tenth Amendment, and imposes undue burdens on the PACE industry, potentially reducing funding volume and increasing compliance costs for its members. The plaintiff seeks declaratory and injunctive relief to prevent the enforcement of the rule, asserting that it threatens the viability of PACE financing in Florida and other states. For more information, click here.
On May 19, lawmakers voted to invoke cloture on the U.S. Senate’s proposal to regulate stablecoins, known as the GENIUS Act, marking a pivotal moment in its legislative journey. This vote followed an earlier setback on May 8, when Democrats withdrew their support to engage in further negotiations. The cloture vote garnered 66 votes in favor, 32 against, and two abstentions, including support from several Democrats who had initially opposed the bill. Sixteen Democrats supported the vote, led by Senators Kirsten Gillibrand, Angela Alsobrooks, Ruben Gallego, and Mark Warner. Despite this progress, Senator Elizabeth Warren however, remained a vocal critic arguing that the bill had not undergone significant changes since the initial vote and urged her colleagues to reject it. Warren expressed concerns about the bill’s ability to address issues related to the Trump family’s crypto ventures, potential loopholes for bad actors, and insufficient consumer protections. A final vote on the bill has not yet been scheduled. For more information, click here.
On May 28, Oklahoma enacted Senate Bill No. 626, amending the Security Breach Notification Act to enhance the requirements for notifying individuals and the attorney general (AG) about security breaches involving personal information. The law updates definitions related to breaches and specifies the contents of required notices, including exemptions for certain breaches affecting fewer residents. It mandates confidentiality for information submitted to the AG and clarifies compliance with notice requirements. The bill modifies civil penalties for violations, providing exemptions from liability under specific circumstances, and updates statutory language and references. The act will become effective on January 1, 2026. For more information, click here.
On May 27, Florida Governor Ron DeSantis approved a bill amending Section 395.3011 of the Florida Statutes, concerning medical debt and billing practices. This legislation revises the definition of “extraordinary collection action” and provides exceptions to the prohibition against facilities engaging in such actions to obtain payment for services, specifically regarding the sale of certain debts. The bill outlines conditions under which a facility may not pursue extraordinary collection actions, such as before determining eligibility for financial assistance, providing an itemized bill, or during ongoing grievance processes. It also specifies that debt sales governed by contracts prohibiting interest or fees and extraordinary collection actions by the debt purchaser are exceptions. The act is set to take effect on July 1. For more information, click here.
On May 26, Nevada Governor Joe Lombardo approved Senate Bill No. 44, which imposes specific duties on providers of financial services to safeguard customer information. It mandates confidentiality for certain records obtained from governmental agencies, while allowing examination by the legislative auditor and the Department of Taxation. The bill also requires mortgage companies and loan originators to meet licensing requirements through examinations and investigations, with associated fees. Additionally, it outlines compliance requirements for foreclosure consultants, purchasers, and loan modification consultants, including maintaining information security programs and notifying the commissioner of any notification events. Penalties are provided for noncompliance, ensuring adherence to both federal and state laws and regulations. For more information, click here.
On May 25, Maryland enacted House Bill 1294, known as the Earned Wage Access and Credit Modernization Act. The legislation introduces new regulatory frameworks for earned wage access (EWA) providers, including licensing requirements and fee limitations. Notably, the act defines “providers” as entities engaged in offering earned wage access, excluding employers who advance wages directly to employees or independent contractors. The act will go into effect on October 1. For more information, click here.
On May 23, Oklahoma Governor Kevin Stitt approved Senate Bill No. 889, a legislative act concerning hospitals and their pricing transparency. This law mandates hospitals to publicly disclose a digital file containing a list of all standard charges for hospital items and services, including a consumer-friendly list for shoppable services. The bill specifies requirements for the accessibility and formatting of these lists, which must be updated annually and displayed prominently online. It authorizes the State Department of Health to monitor compliance and take corrective actions against noncompliant hospitals, including prohibiting collection actions and imposing penalties. This legislation aims to enhance transparency in hospital pricing and ensure consumers have access to detailed pricing information. The act is set to take effect on November 1. For more information, click here.
