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 June 5, the U.S. District Court for the Western District of Texas issued an order granting the joint stipulation of dismissal with prejudice filed by the U.S. Securities and Exchange Commission (SEC) and Ian Balina. This order effectively dismisses all claims and causes of action asserted by the SEC against Balina, with each party bearing its own attorneys’ fees, costs, and expenses. The SEC originally alleged that Balina conducted an unregistered offering of crypto asset securities by offering and selling SPRK Tokens as securities in unregistered transactions, violating Sections 5(a) and 5(c) of the Securities Act of 1933. Balina was accused of organizing an investing pool and promoting SPRK Tokens without proper registration and failing to disclose consideration received for his promotional efforts, violating Section 17(b) of the Securities Act. The dismissal reflects the SEC’s strategic shift in regulatory approach towards the crypto industry, rather than an evaluation of the merits of the case. For more information, click here and here.
On June 5, the U.S. Department of Justice filed a civil forfeiture complaint in the U.S. District Court for the District of Columbia, targeting over $7.74 million allegedly laundered by North Korean IT workers to benefit the North Korean government. This action is part of ongoing efforts to disrupt schemes that evade U.S. sanctions and fund North Korea’s weapons programs through illegal IT worker schemes and cryptocurrency theft. The funds were initially restrained following an indictment against Sim Hyon Sop, a North Korean Foreign Trade Bank representative, who allegedly conspired with IT workers to amass cryptocurrency through fraudulent employment. The complaint highlights the North Korean government’s exploitation of the cryptocurrency ecosystem, using sophisticated money laundering techniques to obscure the origin of funds and evade sanctions. For more information, click here.
On June 4, Federal Reserve Governor Michelle Bowman was confirmed by the U.S. Senate to the central bank’s top regulatory position as Vice Chair for Supervision. Bowman, nominated by President Donald Trump, has been a member of the Federal Reserve Board since 2018 and brings her experience as a former community banker to the role. Her confirmation, decided by a narrow vote of 48 to 46, positions her to advance an agenda focused on easing regulatory constraints for banks. For more information, click here.
On June 4, the Consumer Financial Protection Bureau (CFPB) submitted several regulatory proposals to the Office of Management and Budget (OMB) for review. Among the rules under consideration are those related to loan originator (LO) compensation and discretionary mortgage servicing, governed by the Truth in Lending Act (Regulation Z) and the Real Estate Settlement Procedures Act (Regulation X). These rules were designed to protect consumers by ensuring fair practices in loan origination and servicing, addressing issues such as compensation, error correction, and loss mitigation. The LO compensation requirements aimed to reduce incentives for loan originators to steer consumers into loans with unfavorable terms. The discretionary servicing rules under Regulation X focus on servicers’ obligations to correct errors, provide information, and offer protections related to force-placed insurance. These rules also streamline existing provisions related to mortgage servicing transfers and escrow account management. Additionally, the CFPB is reviewing its “larger participant” rules, which define the scope of its supervisory authority over major players in the debt collection and consumer credit reporting sectors. These rules, currently in “prerule” status, are under scrutiny by the OMB. For more information, click here.
On June 3, Acting Comptroller of the Currency Rodney E. Hood addressed the U.S. Chamber of Commerce Capital Markets Forum, emphasizing the Office of the Comptroller of the Currency’s (OCC) commitment to fostering a resilient and innovative financial system. Hood outlined four strategic priorities: accelerating bank-fintech partnerships, expanding engagement with digital assets, advancing financial inclusion, and modernizing regulation. He highlighted the OCC’s efforts to support innovation through initiatives like regulatory sandboxes and the Office of Financial Technology, while also stressing the importance of financial inclusion as a civil rights issue. Hood underscored the OCC’s role in ensuring that regulations are effective and tailored, rather than excessive, to empower banks to drive economic growth. He concluded by reaffirming the OCC’s dedication to creating a regulatory environment that supports American banks in leading global innovation and investment. For more information, click here.
On June 2, a federal judge in Georgia issued a $1.1 million default judgment in favor of the SEC against Keith Crews, who failed to respond to civil fraud charges related to a crypto offering purportedly based on non-existent stem cell technology. The SEC’s lawsuit, filed in August 2023, accused Crews of orchestrating an affinity fraud scheme through his companies, Stem Biotech LLC and Four (4) Square Biz LLC, raising approximately $800,000 from around 200 investors. The U.S. District Court for the Northern District of Georgia ordered Crews to pay over $530,000 in illicit profits, nearly $51,000 in prejudgment interest, and an additional $530,000 as a civil penalty, along with a permanent injunction against future securities law violations. The SEC highlighted Crews’ deceptive practices, including false claims of stem cell technology and unauthorized use of professional names to solicit investments, primarily targeting non-accredited investors within the African-American community through church and Bible study affiliations. For more information, click here.
On May 30, the Federal Reserve System released its Senior Financial Officer Survey, offering a comprehensive analysis of banks’ approaches to reserve balance management, preferred reserve levels, and the utilization of the Standing Repo Facility. This survey provides a detailed snapshot of the strategies and expectations of financial institutions navigating a rapidly evolving economic environment. The findings underscore the Federal Reserve’s proactive measures to adapt its policies and maintain the robustness and resilience of the U.S. banking system. By actively engaging with banks and monitoring their responses to shifting market dynamics, the Federal Reserve continues to uphold its commitment to fostering stability and promoting effective monetary policy in support of the nation’s economic health. For more information, click here.
On May 28, Vice President JD Vance addressed the Bitcoin 2025 conference in Las Vegas, emphasizing that stablecoins do not threaten the U.S. dollar but rather enhance its economic influence. VP Vance highlighted the GENIUS Act, a proposed stablecoin legislation, as a potential economic booster, aligning with the Trump administration’s pro-crypto stance. Despite previous Democratic concerns over conflicts of interest related to President Trump’s personal cryptocurrency ventures, Vance focused on the benefits of legitimizing stablecoins. He also praised the administration’s efforts to create a strategic bitcoin reserve and reduce regulatory burdens, including the Department of Labor’s recent decision to allow cryptocurrency investments in retirement plans. Vance’s remarks underscore a broader initiative to integrate digital assets into the financial system, with future discussions anticipated on the implications of these regulatory changes. For more information, click here.
On May 28, a coalition of financial associations addressed a letter to Senate Finance Committee leaders, urging them to exclude a proposed 3.5% tax on remittance transfers from the upcoming reconciliation bill. The tax, which would apply to cross-border payments initiated by U.S. consumers, raises significant privacy concerns by requiring financial institutions to collect sensitive personal information, such as social security numbers, to verify citizenship. The associations argue that this measure would impose substantial compliance costs on financial institutions, potentially drive consumers to unregulated channels, and undermine anti-money laundering efforts. They emphasize that the proposal contradicts the administration’s priorities and could harm small businesses and American citizens by increasing costs and complicating regulatory frameworks. The letter calls for the rejection of this tax to protect consumer privacy and maintain financial integrity. For more information, click here.
On May 27, Senators Sheldon Whitehouse (D-RI) and Charles E. Grassley (R-IA) expressed their disagreement with the U.S. Department of the Treasury’s interim final rule, which limits the reporting of beneficial ownership information under the Corporate Transparency Act (CTA) to entities previously defined as “foreign reporting companies.” This rule, according to its own estimates, would exempt over 99% of entities previously required to report, contradicting Congress’s intent to include domestic entities and U.S. persons in the CTA’s scope. The senators urged Treasury Secretary Scott Bessent to rescind the rule and fully implement the CTA, emphasizing its importance for national security and law enforcement efforts to combat various forms of criminal activity. They highlighted the bipartisan legislative process that led to the CTA’s enactment, underscoring the necessity of collecting beneficial ownership information to protect Americans from threats such as drug cartels and terrorist groups. For more information, click here.
On May 15, Representative Bill Huizenga (R-MI) introduced H.R. 3445, the Bureau of Consumer Financial Protection Commission Act, in the House of Representatives. This bill proposes amending the Consumer Financial Protection Act of 2010 to transform the CFPB into an independent agency led by a five-member commission appointed by the President, with Senate approval. The commission would include members with private sector experience in consumer financial products and services, and a state bank supervisor. The bill aims to enhance the CFPB’s regulatory authority and ensure diverse representation within its leadership. H.R. 3445 is currently referred to the House Committee on Financial Services, For more information, click here.
On June 3, the Connecticut legislature passed S.B. No. 1257, an act aimed at reforming consumer credit and commercial financing regulations. This comprehensive legislation introduces several key changes, including the requirement for electronic submission of certain surety bond cancellations, modifications to procedures for legal name changes of licensees, and redefinitions of terms such as “sales finance company” and “mortgage servicer.” It also establishes new procedures for registering as an exempt mortgage servicer registrant and sets requirements for private student education loan cosigner releases. The act enhances enforcement authority over registrants, prohibits the collection of fees for small loans without a license, and mandates specific disclosures for shared appreciation agreements. Additionally, it modifies statutes related to commercial financing and private education lenders, while making technical adjustments to consumer credit statutes. For more information, click here.
On June 3, Colorado Governor Jared Polis signed HB25-1236 into law, which addresses the screening process for prospective residential tenants. The bill revises the definition of a “portable tenant screening report” by exempting prospective tenants using housing subsidies from including a credit history report, credit score, or adverse credit event in their screening report. It also eliminates the requirement for tenants to provide screening reports directly through consumer reporting agencies or third-party websites. Additionally, the bill clarifies the definition of “adverse credit event” to include occurrences that may negatively impact a person’s credit score, such as past due rent payments and collections. Furthermore, landlords can now require that portable tenant screening reports be completed within the previous 60 days, extending the previous requirement from 30 days. For more information, click here.
On May 31, the Illinois General Assembly enacted amendments to the Interchange Fee Prohibition Act (IFPA), extending the effective date of its restrictions on interchange fees by one year. Originally set to take effect on July 1, 2025, the law now faces implementation on July 1, 2026, amid ongoing legal challenges. The IFPA prohibits banks and payment networks from charging interchange fees on portions of transactions related to taxes or gratuities, a move contested in federal court for allegedly violating federal statutes and preempting national banking regulations. For more information, click here.
On May 29, the Mayor and City Council of Baltimore, along with the Economic Action Maryland Fund filed a notice of voluntary dismissal without prejudice in their case against the CFPB and Russell Vought in the U.S. District Court for the District of Maryland. The plaintiffs decided to dismiss the action based on the defendants’ repeated assurances that the CFPB lacks any mechanism to transfer excess funds from its reserve to the Federal Reserve or any other entity and can only use these funds internally for its operations. The plaintiffs reserved the right to take further legal action if future actions by the defendants contradict these representations. For more information, click here.
On May 28, Nevada Senate Bill No. 437 was approved by Governor Joe Lombardo. This act establishes specific requirements for contracts between Internet consumer lenders and Nevada residents, ensuring that such contracts are governed by state laws and dispute resolutions occur within Nevada. The bill allows Internet consumer lenders to apply for a lending license for operations outside the state without needing a license for an in-state office, thereby expanding their operational flexibility. Additionally, it exempts these lenders from restrictions on conducting loan business alongside other businesses in the same location. The provisions of this act will take effect on October 1, 2025, and do not apply to contracts made before this date. For more information, click here.
On May 14, Iowa Senate Bill 449 was signed into law by Governor Kim Reynolds, establishing regulations for digital financial asset transaction kiosks. This legislation defines key terms such as “digital financial asset” and “operator,” and sets forth requirements for daily transaction limits, maximum charges, and mandatory consumer disclosures. Operators must provide clear information about transaction terms, fees, and fraud warnings, and issue receipts for all transactions. The bill mandates operators to maintain compliance and anti-fraud policies, designate a compliance officer, and ensure customer service availability. It also outlines penalties for violations, empowering the Attorney General to enforce compliance. The act takes effect immediately and applies to operators from July 1, 2025. For more information, click here.
