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 16, Commissioner Christy Goldsmith Romero announced her departure from the Commodity Futures Trading Commission (CFTC), effective May 31, marking the end of her 23-year tenure in federal service. Goldsmith Romero expressed pride in the CFTC’s achievements in strengthening customer protection and market integrity, and acknowledged the dedicated staff who supported her efforts. Two days earlier, Commissioner Summer K. Mersinger also announced her resignation, citing personal reflection and family discussions as factors in her decision to leave the agency she cherished over the past five years. Mersinger will transition to a leadership role at the Blockchain Association. These departures leave the CFTC with only two commissioners. For more information, click here and here.
On May 15, the Consumer Financial Protection Bureau (CFPB) rescinded its May 2022 interpretive rule concerning the authority of states to enforce the Consumer Financial Protection Act of 2010 (CFPA). This decision, published in the Federal Register, clarifies that state enforcement under § 1042 of the CFPA is limited to actions enforcing the CFPA itself, rather than any federal consumer financial law. The CFPB emphasized that the previous interpretation improperly expanded state authority beyond statutory limits, allowing states to bring concurrent enforcement actions with the CFPB, which was inconsistent with the intended joint enforcement framework. The rescission aims to restore statutory limits and ensure that state actions align with the CFPA’s provisions, preserving the regulatory and compliance framework established by Congress. For more information, click here.
On May 15, the Division of Trading and Markets of the U.S. Securities and Exchange Commission (SEC) and the Office of General Counsel of the Financial Industry Regulatory Authority (FINRA) announced the withdrawal of their joint statement regarding broker-dealer custody of digital asset securities, originally issued on July 8, 2019. The joint statement had outlined custody and record-keeping questions that arise around digital asset securities and indicated that broker-dealers may have more difficulty adhering to existing regulatory requirements given the nature of such securities. This withdrawal is effective immediately and reflects the staffs’ decision to rescind the statement, which was not a formal rule or regulation and had no legal force or effect. The statement was intended to provide guidance but did not alter or amend applicable law. For more information, click here.
On May 15, the CFPB announced the withdrawal of its proposed rule titled “Prohibited Terms and Conditions in Agreements for Consumer Financial Products or Services (Regulation AA).” Initially published on January 14, 2025, this rule aimed to prohibit certain contractual provisions that could limit consumer rights or waive legal protections under state or federal law. The CFPB decided to withdraw the rule due to changes in its policies, agenda, and objectives, noting that the rule was largely duplicative of the Federal Trade Commission’s (FTC) Credit Practices Rule. Additionally, comments received during the proposal’s review raised questions about the CFPB’s authority to implement such a rule. The CFPB emphasized its commitment to minimizing regulatory burdens and will reconsider the need for such a rule in the future. For more information, click here.
On May 15, SEC Commissioner Hester M. Peirce issued a statement titled “An Incremental Step Along the Journey,” which discusses the release of a set of frequently asked questions (FAQs) by the Division of Trading and Markets. The FAQs address the application of broker-dealer financial responsibility rules and transfer agent rules to crypto asset activities and distributed ledger technology. These FAQs aim to clarify existing rules, particularly regarding broker-dealer custody and capital rules for crypto assets like bitcoin and ether, and emphasize that non-security crypto assets held by broker-dealers are not protected by the Securities Investor Protection Act (SIPA). Additionally, the FAQs explore the use of distributed ledger technology by registered transfer agents, relevant for firms considering tokenized securities. In her statement, Peirce acknowledged that while these FAQs provide incremental guidance, they need further work, including updating the special purpose broker-dealer statement and providing additional clarity on transfer agent rules. For more information, click here and here.
On May 15, the CFPB announced the withdrawal of a proposed interpretive rule concerning electronic fund transfers (EFTs) through accounts primarily used for personal, family, or household purposes using emerging payment mechanisms. This proposed rule, initially intended to clarify statutory and regulatory requirements under the Electronic Fund Transfer Act (EFTA), was withdrawn because it did not align with the CFPB’s current priorities and objectives. The CFPB cited multiple issues raised by public comments, including concerns about the proper interpretation of the EFTA, as reasons for the withdrawal. The Bureau indicated that any future interpretive rule on EFTs would benefit from an additional comment period to address these concerns. For more information, click here.
On May 14, the CFPB published a proposed rule to rescind amendments to its Procedures for Supervisory Designation Proceedings. As background, CFPA § 1024(a)(1)(C) gives the CFPB discretion to supervise nonbanks that do not qualify for supervision under one of the primary grounds in the CFPA (offer/broker/service mortgages, offer student loans, offer small dollar loans, larger market participant). The discretionary supervisory authority can apply to “any [nonbank] covered person who … the Bureau has reasonable cause to determine, by order, after notice to the covered person and a reasonable opportunity for such covered person to respond, based on complaints collected through the system under § 1013(b)(3) … or information from other sources, that such covered person is engaging, or has engaged, in conduct that poses risks to consumers with regard to the offering or provision of consumer financial products or services.” The Bureau has particular concerns about the manner in which the 2022 and 2024 amendments provided for public release of decisions and orders. Under those amendments, if an entity consented to supervisory designation, then there would be no public release of any decision or order. However, if the entity contested designation, that choice may result in a public decision and order asserting that the entity “is engaging, or has engaged, in conduct that poses risks to consumers.” The Bureau now expresses concerns that these amendments may unduly pressure entities to consent to supervisory designation to avoid public disclosure. Public comments on the rescission will be accepted until June 13. For more information, click here.
On May 14, U.S. Representative French Hill (R-AR) addressed the complexities introduced by President Donald Trump’s crypto ventures, including the launch of the TRUMP memecoin, in advancing bipartisan stablecoin legislation. Speaking at Consensus 2025 in Toronto, Hill, who chairs the House Financial Services Committee, acknowledged the challenges posed by potential conflicts of interest and the opacity surrounding Trump’s crypto investments. Despite these hurdles, Hill emphasized a strong bipartisan consensus on the necessity for both stablecoin regulations and a market structure bill. He likened the relationship between these bills to “peanut butter and jelly,” highlighting their complementary nature in facilitating digital asset activities. At the White House’s Digital Assets Summit in March, Trump set a deadline for Congress to deliver stablecoin and market structure bills before the August recess. Hill expressed confidence in meeting this deadline, underscoring the ongoing efforts to achieve legislative progress. For more information, click here.
On May 14, the CFPB filed its decision to withdraw the proposed rule titled “Protecting Americans from Harmful Data Broker Practices” (Regulation V) in the Federal Register. This withdrawal marks a significant shift in the Bureau’s approach to regulating data brokers and other updates to Regulation V under the Fair Credit Reporting Act (FCRA). The proposed rule, initially published on December 13, 2024, aimed to redefine key terms and expand the scope of the FCRA to improperly include data brokers as consumer reporting agencies as well as make other amendments to Regulation V, including with regards to permissible purpose and disputes. However, the Bureau has now determined that rulemaking is not necessary or appropriate at this time. The decision to withdraw the rule follows numerous concerns raised by commenters regarding its alignment with the FCRA and the CFPB’s statutory authority. For more information, click here.
On May 13, Acting Chairman Caroline D. Pham of the CFTC addressed the U.S. District Court for the District of New Jersey’s report recommending sanctions against the CFTC for misconduct in the case of CFTC v. Traders Global Group Inc. The court found the CFTC engaged in willful misconduct, including making false statements and exhibiting numerous instances of sanctionable behavior, which Pham described as inexcusable. She emphasized the need for accountability and corrective action to restore the agency’s credibility. Pham highlighted her proactive measures since becoming acting chairman, including reorganizing the Division of Enforcement, establishing guidelines for self-reporting, and enhancing staff training to prevent future misconduct. For more information, click here.
On May 13, the CFPB released a proposed rule to rescind its previous regulation requiring nonbank entities to report certain agency and court orders to a CFPB registry. The rule, initially adopted on July 8, 2024, mandated nonbank covered persons to disclose final public orders related to consumer financial products or services. The final rule had extensive requirements, including annual compliance certifications and the registration of orders dating back to 2017. The CFPB’s proposal to rescind this rule stems from concerns that the costs imposed on regulated entities — and ultimately consumers — are not justified by the speculative benefits outlined in the original rule. The CFPB argues that the rule is unnecessary for monitoring consumer risks, as other federal and state agencies are already empowered to enforce consumer financial laws. For more information, click here.
On May 12, Paul S. Atkins, chairman of the SEC, delivered a keynote address at the Crypto Task Force Roundtable on Tokenization in Washington, D.C. He highlighted the transformative potential of migrating securities from traditional databases to blockchain-based systems, likening it to the digital revolution in the music industry. Atkins emphasized the need for the SEC to adapt its regulatory framework to accommodate on-chain securities and crypto assets, advocating for clear guidelines on issuance, custody, and trading. He criticized past SEC approaches to crypto regulation and underscored the importance of establishing rational rules to foster innovation while protecting investors. For more information, click here.
On May 12, the U.S. attorney’s office informed the Honorable Jessica G.L. Clarke of the Southern District of New York that it decided not to proceed with Count Four of the Superseding Indictment (conspiracy to receive stolen property) against Anton Peraire-Bueno and James Pepaire-Bueno. The defendants had been charged with conspiracy to commit wire fraud and conspiracy to commit money laundering, following their alleged sophisticated scheme to exploit the Ethereum blockchain and steal $25 million in cryptocurrency. Despite the serious nature of the allegations, which involved manipulating blockchain protocols and concealing stolen funds, the government chose not to pursue Count Four, rendering the defendants’ motion to dismiss this count moot. For more information, click here.
On May 9, the U.S. Senate Committee on Banking, Housing, and Urban Affairs announced that Trump signed into law Chairman Tim Scott’s (R-SC) Congressional Review Act (CRA) resolution, effectively overturning the Biden-era CFPB rule on overdraft fees. Scott, who spearheaded the effort, emphasized that the rule would have imposed detrimental price controls on overdraft services, potentially leading to more unbanked individuals and fewer consumer options. The announcement noted that in November 2024, Scott had urged the Biden administration to halt all rulemaking activities in preparation for the change in administration. Nevertheless, the CFPB finalized the overdraft rule in December 2024, prompting Scott to introduce CRA resolutions alongside Hill. For more information, click here.
On May 8, the Office of the Comptroller of the Currency (OCC) issued Bulletin 2025-9, announcing an interim final rule that rescinds its 2024 final rule concerning regulations for business combinations involving national banks and federal savings associations under 12 CFR 5.33. This action also withdraws the accompanying policy statement titled “Policy Statement Regarding Statutory Factors Under the Bank Merger Act,” which was included in an appendix to 12 CFR 5 subpart C. The interim final rule reinstates provisions related to expedited review and the streamlined business combination application process, while removing the policy statement that guided the OCC’s review of applications under the Bank Merger Act. The OCC invites comments on all aspects of the interim final rule, including suggestions for future policy statements. These regulatory amendments impact all national banks, federal savings associations, and federal branches and agencies of foreign banks. For more information, click here.
On May 8, Peirce addressed the SEC’s 31st International Institute for Securities Market Growth and Development, emphasizing the importance of balanced regulation in capital markets. She highlighted the role of capital markets in serving humanity by fostering economic growth and societal prosperity. Peirce discussed the need for regulatory frameworks that encourage innovation while protecting investors, noting the decline in public companies due to stringent regulations. She advocated for a regulatory approach that accommodates new technologies, such as tokenization of securities, and proposed a conditional exemption to facilitate the use of distributed ledger technology. Peirce also stressed the importance of international collaboration to overcome regulatory barriers and enhance global capital market growth. Her remarks underscored the ongoing challenge of achieving a regulatory balance that supports both innovation and investor protection. For more information, click here.
On May 16, Florida Governor Ron DeSantis signed into law CS/CS/SB 232, aimed at refining debt collection practices within the state. Among other things, the amendment to the Florida Consumer Collection Practices Act clarifies that prohibited contact between the hours of 9:00 p.m. and 8:00 a.m. in debt collection does not include email communication because such contact is less invasive than telephone calls.For more information, click here.
On May 9, 2025, New York Governor Kathy Hochul signed new legislation as part of the state’s fiscal year (FY) 2026 Budget aimed at enhancing consumer protection and reducing costs for New Yorkers. The legislation introduces several measures, including simplifying the cancellation process for online subscriptions, requiring online retailers to clearly post return and refund policies, and establishing a regulatory framework for “Buy Now, Pay Later” loans to protect consumers from potential risks. Additionally, the budget addresses “surveillance pricing” by mandating businesses to disclose when prices are set using consumer data. It also targets overdraft fees that disproportionately affect low-income individuals by proposing regulations to cap these fees and improve banking transparency. For more information, click here.
On May 9, Bonta announced his participation in a coalition of 23 attorneys general, submitting an amicus brief in the case of National Treasury Employees Union v. Vought. This lawsuit challenges the Trump administration’s attempts to dismantle the CFPB. The coalition’s brief supports maintaining a preliminary injunction that prevents mass layoffs at the CFPB, arguing that dismantling the agency would severely harm consumer protections nationwide and violate the separation of powers established by Congress. Bonta emphasized the critical role of the CFPB in protecting consumers from exploitation and urged the court to uphold the injunction to safeguard the financial well-being of households across the nation. For more information, click here.
On May 9, 2025, the California Privacy Protection Agency (CPPA) initiated a public comment period for modifications to its proposed regulations concerning updates to the California Consumer Privacy Act (CCPA), cybersecurity audits, risk assessments, Automated Decisionmaking Technology (ADMT), and insurance companies. This follows a unanimous vote by the CPPA’s board on May 1 to amend the regulations. The comment period, open until June 2invites feedback from the public, businesses, consumer advocates, and other stakeholders. Interested parties can access the full text of the proposed regulations and submit comments via email or mail as outlined on the CPPA’s website. For more information, click here.
On May 8, the CPPA board ordered Jerico Pictures, Inc., operating as National Public Data, a Florida-based data broker, to pay a $46,000 fine for failing to register and pay the annual fee mandated by California’s Delete Act. This fine is the maximum penalty under the law for nonregistration. National Public Data had previously been in the spotlight due to a significant data breach that exposed 2.9 billion records, including sensitive personal information. The CPPA’s Enforcement Division initiated an administrative action in February 2025, seeking the maximum fine for the company’s late registration, which occurred 230 days after the deadline and only after investigative contact. The board’s default order concludes the enforcement action successfully. For more information, click here.
On May 1, Pennsylvania Governor Josh Shapiro announced the launch of new consumer protection tools, including a hotline, website, and email address, to facilitate the reporting of scams and predatory practices. This initiative reportedly aims to fill the gap left by reduced federal consumer protections, particularly from the CFPB, and leverages Pennsylvania’s robust consumer protection laws. Pennsylvanians can now report issues such as denied health insurance claims, suspicious financial transactions, and student loan disputes by calling 1-866-PACOMPLAINT, visiting pa.gov/consumer, or emailing consumer@pa.gov. For more information, click here.
