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 April 11, the U.S. Court of Appeals for the District of Columbia Circuit addressed an emergency motion for a stay pending appeal in the case National Treasury Employees Union v. Russell T. Vought. The appellants, including the acting director of the Consumer Financial Protection Bureau (CFPB), sought to stay parts of a district court order that had granted a preliminary injunction in favor of the appellees. The court granted the appellants authority to issue layoffs, provided that they proceed in a way that ensures that the agency can continue fulfilling its statutory duties. The court maintained several provisions of the injunction, including the requirement to preserve CFPB records, prevent mass contract terminations, and ensure that employees have access to the necessary tools to perform their legally mandated functions. The appeal was expedited with a briefing schedule set, and oral arguments scheduled for May 16. For more information, click here.
On April 11, the plaintiffs in the cases ACA International, LLC v. CFPB and M. Galicia, Inc. v. CFPB jointly filed a motion to stay proceedings in the U.S. District Court for the District of Columbia. The plaintiffs had challenged an advisory opinion on medical debt collection issued by the CFPB on October 1, 2024. In the filing, the CFPB announced its plans to revoke the advisory opinion, and the parties requested a stay to allow time for this revocation, which would render the litigation moot. The CFPB proposed to provide status reports on the revocation process by July 14, and every 30 days thereafter. For more information, click here.
On April 11, the CFPB announced regulatory relief for small loan providers concerning the regulation titled Registry of Nonbank Covered Persons Subject to Certain Agency and Court Orders. The CFPB stated that it will not prioritize enforcement or supervision actions against entities that fail to meet future registration deadlines under this regulation, including the upcoming deadlines on April 14 and July 14. Instead, the CFPB will focus its efforts on addressing more pressing threats to consumers. Additionally, the CFPB is considering issuing a notice of proposed rulemaking to either rescind the regulation or narrow its scope. For more information, click here.
On April 11, Mark T. Uyeda, acting chairman of the U.S. Securities and Exchange Commission (SEC), delivered remarks at the Crypto Task Force Roundtable on Crypto Trading in Washington, D.C. He drew a parallel between the early days of the New York Stock Exchange and the current state of crypto asset trading, emphasizing the organic development of these markets in response to demand. Uyeda highlighted the challenges posed by state-level regulation, which could result in a fragmented regulatory landscape, and suggested that a federal framework might be more efficient. He also addressed the difficulties faced by broker-dealers and national securities exchanges in listing tokenized securities, given that most are unregistered, and the complexities of complying with existing federal securities laws. Uyeda pointed out the potential of blockchain technology to enhance the efficiency and reliability of securities transactions and advocated for time-limited, conditional exemptive relief to foster innovation in the crypto trading space. He concluded by encouraging market participants to provide input on where such relief might be appropriate. For more information, click here.
On April 10, President Donald Trump signed a bill blocking an Internal Revenue Service (IRS) rule that would have required certain cryptocurrency brokers to report tax information on transactions conducted on their platforms. This rule, which was set to take effect in 2026, faced significant opposition from the crypto industry, particularly decentralized exchanges that argued compliance was impractical due to their automated nature. The rule aimed to reduce unpaid taxes on crypto transactions, with estimates suggesting that its repeal could result in nearly $4 billion in uncollected taxes over a decade. Trump’s action aligns with his commitment to support the digital asset industry by easing regulatory constraints. For more information, click here.
On April 10, the SEC’s Division of Corporation Finance (the Division) issued a statement aimed at providing greater clarity on the application of federal securities laws to crypto assets. These offerings may involve equity or debt securities of issuers whose operations relate to networks, applications, and/or crypto assets. The offerings may also relate to crypto assets offered as part of or subject to an investment contract (such a crypto asset, a “subject crypto asset). The statement does not modify or amend existing rules, but instead tries to translate the traditional disclosure requirements for the unique realities of the crypto asset universe. Notably, the statement also does not address whether or not crypto assets are deemed securities for purposes of federal securities laws, rather, the statement addresses disclosure requirements for those issuers offering crypto assets as part of or subject to an investment contract. For more information, click here.
On April 10, the SEC submitted a letter to the Honorable Mary Kay Vyskocil of the U.S. District Court for the Southern District of New York, requesting approval of a proposed final judgment against Nova Labs, Inc. The SEC’s complaint, filed on January 17, alleged that Nova Labs violated Section 17(a)(2) of the Securities Act of 1933 by making misstatements to investors during a private placement of preferred equity shares. Following negotiations, Nova Labs agreed to settle the allegations without admitting or denying the specific claims, consenting to a $200,000 civil penalty. The proposed final judgment, if approved, would resolve all claims in the complaint, with certain allegations dismissed with prejudice. For more information, click here.
On April 9, the House of Representatives passed two Congressional Review Act (CRA) joint resolutions aimed at nullifying certain CFPB rules finalized in the final days of the Biden-Harris administration. These resolutions, S.J. Res. 18 and S.J. Res. 28, target rules related to limiting the overdraft fees that may be charged by large financial institutions, and extending supervisory authority over certain providers of digital payments services, respectively. The CRA resolutions are now before Trump for signature. For more information, click here.
On April 9, the SEC effectuated a major reorganization of its enforcement and exams divisions. According to a staff memo from Uyeda, the enforcement staff will now report to new deputy directors based on geographic regions — West, Northeast, and Southeast — as well as a deputy director for specialized units. Whereas prior to the reorganization, the SEC had one deputy director for the enforcement division, with 10 regional offices across the U.S. where staff report to a director of each office. Additionally, exam staff in the regional offices will report to new associate directors, with the apparent goal to streamline the reporting structure and address management challenges. Uyeda highlighted that the prior structure, with more than 40 direct reports to the enforcement director, was unsustainable. For more information, click here.
On April 9, the White House directed executive departments and agencies to repeal regulations deemed unlawful pursuant to recent U.S. Supreme Court decision. This directive aims to address regulatory barriers that the administration believes hinder economic growth and innovation. The directive references several recent Supreme Court decisions that have redefined the constitutional boundaries of regulatory authority, including: Loper Bright Enterprises v. Raimondo; West Virginia v. EPA; SEC v. Jarkesy; Michigan v. EPA; Sackett v. EPA; Ohio v. EPA; Cedar Point Nursery v. Hassid; Students for Fair Admissions v. Harvard; Carson v. Makin; and Roman Cath. Diocese of Brooklyn v. Cuomo. The memorandum builds on Executive Order 14219, issued on February 19. This executive order initiated the “Department of Government Efficiency” Deregulatory Initiative, directing the heads of all executive departments and agencies to identify unlawful and potentially unlawful regulations within 60 days and begin plans to repeal them. For more information, click here.
On April 8, the Office of the Comptroller of the Currency (OCC) officially notified Congress of a significant information security incident involving its email system. This notification, mandated by the Federal Information Security Modernization Act, follows the discovery of unauthorized access to OCC emails and attachments that included highly sensitive information related to the financial condition of federally regulated financial institutions. The OCC publicly disclosed the incident on February 26, reporting that it had identified, isolated, and resolved the security incident involving an administrative account in its email system. At that time, the OCC reported the incident to the Cybersecurity and Infrastructure Security Agency and indicated that there was no evidence of any impact on the financial sector. However, preliminary findings indicate that the unauthorized access included highly sensitive information related to the financial condition of federally regulated financial institutions, which is used in the OCC’s examinations and supervisory oversight processes. For more information, click here.
On April 8, the Justice Department announced it will disband its National Cryptocurrency Enforcement Team, which was established to target cryptocurrency crimes, and will shift its focus away from complex crypto-related cases involving banking and securities law. This decision, outlined in a memo by Deputy Attorney General Todd Blanche, aligns with the Trump administration’s efforts to boost the cryptocurrency industry and reverse the Biden administration’s regulatory approach. The department will now prioritize targeting individuals and entities that defraud crypto investors or use digital assets for criminal activities such as human trafficking, drug running, or terrorism. For more information, click here.
On April 8, Federal Deposit Insurance Corporation (FDIC) Acting Chairman Travis Hill provided an update on key policy issues during his remarks. Hill discussed the significant decline in new bank formations since the Great Financial Crisis, emphasizing the need to encourage more de novo bank formations to preserve the community bank model. He also highlighted the FDIC’s open-minded approach to innovation, including digital assets and blockchain, and the recent rescission of the prior notification requirement for crypto-related activities. Additionally, Hill addressed the importance of improving resolution planning for large institutions, ensuring regulatory thresholds reflect inflation and economic growth, and engaging with stakeholders on various regulatory reforms. For more information, click here.
On April 8, in the case of Office of Personnel Management v. American Federation of Government Employees, the U.S. Supreme Court granted a stay of the district court’s injunction that ordered six federal departments and agencies to immediately offer reinstatement to more than 16,000 employees who were laid off. The stay, granted pending the disposition of the appeal in the Ninth Circuit and any potential petition for a writ of certiorari, was based on the insufficiency of the allegations by the nine nonprofit organizations to support their standing. Justices Sotomayor and Jackson dissented, with Justice Jackson emphasizing the lack of demonstrated urgency and the pending lower court proceedings. For more information, click here.
On April 7, the Federal Communications Commission (FCC) issued an order extending the effective date of certain parts of § 64.1200(a)(10) of its rules under the Telephone Consumer Protection Act (TCPA) to April 11, 2026. The delayed portion of the rule mandates that, if a called party revokes consent to receive calls or text messages, that revocation must apply to all future communications from the caller on unrelated matters. Related portions of the rule, such as the revocation keywords (“stop,” “cancel,” “revoke,” etc.), remain on track to become effective April 11. The extension was granted to provide affected parties, particularly financial institutions and health care organizations, additional time to modify their communication systems to process these revocation requests efficiently and cost-effectively. For more information, click here.
On April 7, the U.S. Court of Appeals for the Fourth Circuit granted the government’s motion to stay a preliminary injunction in the case of American Federation of Teachers v. Scott Bessent. The injunction had ordered the Department of Education, the Office of Personnel Management, and the Department of the Treasury to revoke database and IT access granted to employees affiliated with the Department of Government Efficiency (DOGE). The plaintiffs, including several unions and individuals, alleged that the access violated the Privacy Act by allowing unauthorized personnel to access sensitive personal information. The court’s decision to stay the injunction, pending appeal, was based on the government’s strong likelihood of success on the merits, particularly regarding the issue of standing. The stay will remain in effect while the appeal is considered, despite dissenting opinions emphasizing the potential irreparable harm to the plaintiffs. For more information, click here.
On April 7, the FCC announced a reduction in pricing for its Reassigned Numbers Database, effective April 28. This database helps prevent consumers from receiving calls intended for previous holders of their phone numbers. The new pricing structure includes a 20% discount on all existing subscription tiers and introduces two new subscription tiers to better accommodate industry needs. These changes aim to facilitate the checking of large volumes of numbers, thereby reducing the incidence of misdirected calls. For more information, click here.
On April 4, U.S. Department of Housing and Urban Development (HUD) Secretary Scott Turner issued a directive to grantees and stakeholders, emphasizing that federal housing assistance will no longer be granted to illegal aliens or sanctuary cities. This directive aligns with Trump’s Executive Order 14218, “Ending Taxpayer Subsidization of Open Borders,” and aims to ensure that HUD resources are strictly reserved for American citizens and other qualified recipients. The directive reinforces compliance with the 1996 Personal Responsibility and Work Opportunity Reconciliation Act and Section 214 of the Housing and Community Development Act of 1980. For more information, click here.
On April 4, Governor Michael S. Barr delivered remarks at the Federal Reserve Bank of San Francisco, emphasizing the importance of responsible innovation in the context of generative artificial intelligence (Gen AI) in banking. Governor Barr discussed the potential for Gen AI to significantly enhance banking operations, particularly through bank-fintech partnerships that leverage the strengths of both sectors. He highlighted the cautious approach banks are currently taking due to regulatory and technological challenges, but noted that fintechs are well-positioned to drive Gen AI adoption. Barr stressed the need for banks, fintechs, and regulators to collaboratively manage the risks associated with Gen AI to ensure a safe and fair financial system. For more information, click here.
State Activities:
On April 8, New York Attorney General Letitia James sent a letter to congressional leaders, including Senate Majority Leader John Thune, Senate Minority Leader Charles Schumer, House Speaker Mike Johnson, and House Minority Leader Hakeem Jeffries, urging the implementation of comprehensive federal regulations for digital assets. The letter highlighted the significant risks posed by the unchecked proliferation of digital assets, including threats to U.S. dollar dominance, national security, financial market stability, and the potential for widespread fraud and manipulation. James emphasized the need for common-sense principles in digital asset legislation, such as onshoring stablecoins, enforcing anti-money laundering compliance, ensuring transparency and accountability through registration, protecting against conflicts of interest, promoting price transparency, and prohibiting digital assets in retirement accounts. For more information, click here.
On April 7, DailyPay, LLC, an employer-integrated earned wage access (EWA) provider, filed a lawsuit against James, seeking declaratory relief to prevent the enforcement of state and federal laws that the company argues do not apply to its business model. The case, filed in the U.S. District Court for the Southern District of New York, centers on the classification of DailyPay’s on-demand pay (ODP) product, which allows workers to access their earned wages before the traditional payday. The core of the dispute lies in the New York Office of Attorney General’s (NY OAG) assertion that DailyPay’s ODP product constitutes a loan, thereby subjecting it to state usury laws. According to the complaint, on January 22, the NY OAG issued a “Five-Day Notice” under New York Executive Law § 63(12) and Articles 22-A and 23-A of the New York General Business Law, asserting that DailyPay’s product is a loan that violates state usury laws and wage assignment laws by charging interest beyond the statutory limit. However, DailyPay contends that its product is not a loan under New York law, as it does not involve the advancement of future earnings or the imposition of an obligation to repay. For more information, click here.
On April 7, Colorado enacted Senate Bill 25-133, which updates and renames the “Colorado Uniform Fraudulent Transfers Act” to the “Colorado Voidable Transactions Act.” This legislation aims to modernize the state’s approach to voidable transactions by incorporating new definitions and clarifying the burden of proof and standards for claims. The act addresses issues such as insolvency, the rights of creditors, and the conditions under which transfers can be deemed voidable, ensuring that the legal framework aligns with contemporary practices and technologies. The new law will take effect 90 days after the final adjournment of the general assembly, unless a referendum petition is filed. For more information, click here.
On April 7, Kansas House Bill 2118 was signed into law. This legislation addresses consumer protection by requiring any person who solicits a fee for filing or retrieving certain documents from the federal government, the state, a state agency, or a local government to provide specific notices to consumers. The bill mandates that solicitations include a clear statement indicating that the offer is not from a government agency and that no payment or action is required. Additionally, the solicitor’s name and physical address must be provided, along with information on how consumers can directly file or retrieve documents from the appropriate government entity. Violations of these requirements are considered deceptive acts or practices under the Kansas Consumer Protection Act, subject to penalties. The act will take effect upon its publication in the statute book. For more information, click here.
On April 3, the New York City Department of Consumer and Worker Protection (NYC DCWP) announced proposed amendments to the rules governing debt collectors. The amendments aim to clarify the applicability of the rules to original creditors collecting their debts after initiating debt collection procedures. Key changes include revising the definition of “itemization reference date” to allow the use of the most recent transaction date on accounts without a charge-off date, and clarifying that original creditors are not considered “debt collectors” until after initiating debt collection procedures. Additionally, the amendments address provisions related to unconscionable and deceptive trade practices, communication frequency with consumers, and electronic communication consent. The NYC DCWP will hold a public hearing on June 10 at 11:00 AM EST to discuss these amendments. For more information, click here.
On April 3, Arkansas enacted House Bill 1509, known as the “Arkansas Second Amendment Financial Privacy Act.” This legislation prohibits financial institutions from using discriminatory practices against firearms retailers. Specifically, it prevents payment card networks from requiring or assigning merchant category codes that distinguish firearms retailers from other types of retailers. The act also restricts the creation of lists or registries of privately owned firearms or their owners. Enforcement of the act is vested in the AG, who may investigate violations and seek injunctions or civil penalties. For more information, click here.
On April 1, California introduced Assembly Bill 801, the California Community Reinvestment Act, which requires financial institutions to meet the financial services needs of low- and moderate-income (LMI) communities and communities of color. The bill mandates regular assessments of financial institutions’ performance in meeting community needs and imposes penalties for non-compliance. Specifically, the bill requires the commissioner to assess the record of each covered financial institution in satisfying this obligation no less than once every three years and assign one of five possible ratings. The bill authorizes the commissioner to consider this record of performance when considering an application for such things such as the establishment of a branch or the relocation of a main office. The bill also prohibits a covered financial institution with certain ratings from receiving state funds for deposit or being awarded a state contract to provide financial services. For more information, click here.
