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:
On September 19, the U.S. Department of the Treasury issued an advance notice of proposed rulemaking (ANPRM) seeking public input on the implementation of the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act. This ANPRM builds on the Request for Comment on Innovative Methods to Detect Illicit Activity Involving Digital Assets issued by Treasury on August 18, which remains open for comment until October 17. The GENIUS Act mandates that Treasury develop regulations that promote innovation in payment stablecoins, balancing this with illicit finance risk, consumer protection, and financial stability. The ANPRM invites public comments on various aspects of these coming regulations, including regulatory clarity, anti-money laundering (AML) and sanctions obligations, tax issues, the balance between state and federal oversight, and other areas. Stakeholders are encouraged to submit comments by October 20, providing an opportunity for the public to influence the regulatory framework governing permitted payment stablecoins. For more information, click here.
On September 19, a group of Democratic senators, including Ruben Gallego (AZ), Mark Warner (VA), and Kirsten Gillibrand (NY), released a statement emphasizing the need for a bipartisan approach to market structure legislation concerning digital assets. The senators highlighted the significance of the $4 trillion global digital asset market and called for collaboration with Republican colleagues to ensure a comprehensive regulatory framework. Their proposed framework outlines seven key pillars, including closing gaps in the spot market for nonsecurity digital assets, clarifying legal statuses, incorporating digital asset issuers and platforms into the regulatory framework, and preventing illicit finance and corruption. The senators stressed the importance of starting from mutual understanding to effectively engage with their Republican counterparts in crafting this critical legislation. For more information, click here.
On September 18, the Office of the Comptroller of the Currency (OCC) announced significant updates to its organizational structure, aimed at enhancing bank supervision. Effective October 1, the previous Bank Supervision and Examination group will be replaced by three distinct lines of business: Large and Global Financial Institutions, Regional and Midsize Financial Institutions, and Community Banks. Each unit will be led by a senior deputy comptroller reporting directly to the comptroller of the currency. Greg Coleman, the current senior deputy comptroller for bank supervision and examination, will oversee the Large and Global Financial Institutions group, which includes institutions with assets exceeding $500 billion. The restructuring aligns with the OCC’s risk-based supervision approach, as stated by Comptroller Jonathan Gould, and is expected to improve examiner resource management and support professional growth. Additionally, the Office of the Chief National Bank Examiner will consist of five streamlined divisions, reporting to Senior Deputy Comptroller Jay Gallagher, to better support national banks and federal savings institutions in serving their communities and fostering economic growth. For more information, click here.
On September 18, the U.S. House Financial Services Subcommittee on Digital Assets, Financial Technology, and Artificial Intelligence convened a hearing titled “Unlocking the Next Generation of AI in the U.S. Financial System for Consumers, Businesses, and Competitiveness” at the Rayburn House Office Building. The hearing, led by Subcommittee Chairman Bryan Steil, focused on the integration of artificial intelligence (AI) within the financial services sector, exploring its applications in areas such as lending, fraud detection, and compliance. The discussion also covered legislative proposals like the Unleashing AI Innovation in Financial Services Act and the PLAN Act, aimed at fostering innovation while safeguarding against economic and security risks. Chairman Steil emphasized the importance of maintaining U.S. leadership in AI and ensuring that regulatory frameworks support responsible AI development without stifling innovation. For more information, click here.
On September 18, Senators Elizabeth Warren (D-MA) and Chris Van Hollen (D-MD) wrote to Inspector General Jennifer Fain of the Federal Deposit Insurance Corporation (FDIC) to express concern over the FDIC Office of Inspector General’s (FDIC OIG) suspension of its review on succession management and employee retention efforts. The letter requests that the FDIC OIG resume its examination of the FDIC’s practices, particularly in light of significant staff reductions following a government-wide hiring freeze instituted by President Donald Trump. The senators highlighted the risks posed by staffing shortages to the stability and public trust in the banking system and requested a timeline for the resumption of the review and clarification on whether any officials from the Trump administration influenced the suspension of the review. They emphasized the urgency of addressing understaffing and its impact on the FDIC’s capacity to supervise banks effectively. For more information, click here.
On September 18, the Congressional Research Service released a report titled “Mortgage Servicing and Selected Policy Issues,” which examines the role and challenges of mortgage servicers, especially in light of past financial crises. Mortgage servicers, acting on behalf of lienholders or guarantors, manage various administrative tasks, including collecting payments and managing defaults. The report highlights two major events — the 2008 financial crisis and the COVID-19 pandemic — that significantly impacted mortgage servicing practices. During these periods, concerns about foreclosure risks and liquidity pressures led to regulatory interventions, such as the Consumer Financial Protection Bureau’s (CFPB) rules to protect borrowers and mitigate foreclosure risks. The report discusses the implications of these regulations, noting that while they aim to reduce negative outcomes, they may inadvertently increase homeownership costs. It also addresses systemic risk issues, particularly the liquidity challenges faced by nonbank servicers, and suggests that establishing cash reserves could mitigate these risks, though it might raise mortgage costs. The report underscores the need for balancing regulatory measures with the goal of expanding homeownership opportunities. For more information, click here.
On September 18, the U.S. House Subcommittee on Oversight and Investigations convened a hearing titled “Fraud in Focus: Exposing Financial Threats to American Families.” The hearing aimed to address the rising tide of financial fraud, including check fraud and scams targeting seniors, and to explore opportunities for federal agencies and the private sector to collaborate in combating these threats. Witnesses from various sectors, including banking and consumer protection, testified about the sophisticated nature of modern fraud schemes and the need for a coordinated, whole-of-society approach to effectively protect consumers. The hearing underscored the importance of consumer education, regulatory oversight, and technological innovation in preventing fraud. Additionally, there was significant discussion regarding the role of the CFPB and the impact of recent administrative changes on its effectiveness in protecting consumers. The hearing highlighted the urgency of developing a national strategy to address these pervasive financial threats. For more information, click here.
On September 18, Senators Warren, Maxine Waters, and Andy Kim sent a letter to Secretary Scott Bessent of the Department of the Treasury requesting information about the administration’s decision to delay and reopen a crucial rule aimed at safeguarding the U.S. investment adviser sector from misuse by criminals and foreign adversaries. The Financial Crimes Enforcement Network (FinCEN) had postponed the compliance date for the 2024 anti-money laundering rule from January 1, 2026, to January 1, 2028. This rule was intended to address significant gaps in anti-money laundering and countering the financing of terrorism (AML/CFT) regulations within the investment adviser industry. The delay has raised concerns about leaving the U.S. financial system vulnerable to illicit activities. The letter seeks clarification on the rationale behind the postponement and the steps the Treasury and FinCEN will take to mitigate risks in the interim. For more information, click here.
On September 15, the U.S. Senate confirmed the nomination of Stephen Miran from New York to be a member of the Board of Governors of the Federal Reserve System. The confirmation vote resulted in a narrow approval with 48 YEAs and 47 NAYs, while five senators did not vote. Miran’s appointment fills an unexpired term of 14 years dating back to February 1, 2012. The vote reflected a largely partisan divide, with most Republican senators supporting the nomination and most Democratic senators opposing it. For more information, click here.
On September 15, an education technology provider, agreed to pay $7.5 million to settle allegations by the Federal Trade Commission (FTC) regarding unlawful cancellation practices. The FTC accused Chegg of making it exceedingly difficult for consumers, particularly students and parents, to cancel recurring subscriptions for its online learning tools. The complaint highlighted that Chegg’s cancellation processes were complex and not easily accessible, resulting in continued charges even after consumers attempted to cancel. This settlement follows a previous 2022 FTC action against Chegg for data security issues. Under the proposed order, Chegg must implement straightforward cancellation mechanisms and the settlement funds will be used to refund affected consumers. The FTC’s action underscores its commitment to enforcing the Restore Online Shoppers’ Confidence Act and protecting consumers from deceptive billing practices. For more information, click here.
On September 15, the Congressional Research Service released a report titled “Artificial Intelligence in Capital Markets: Policy Issues,” highlighting the transformative potential of AI in capital markets operations and regulation. The report outlines AI’s definition, usage, and regulatory implications, emphasizing its adoption in investment management, client support, compliance, and back-office functions. It also addresses policy concerns such as accountability, transparency, concentration risks, and market correlation. The Securities and Exchange Commission (SEC) has recognized AI’s impact by launching an AI task force and engaging stakeholders to discuss related issues. Legislative proposals, like the Unleashing AI Innovation in Financial Services Act, aim to establish regulatory sandboxes to foster AI innovation while ensuring investor protection and systemic risk management. For more information, click here.
On September 15, the Committee on Ways and Means submitted a Views and Estimates letter to Chairman Jodey Arrington of the Committee on the Budget, as mandated by § 301(d) of the Congressional Budget Act of 1974. The letter outlines the committee’s focus on aspects of the federal budget for fiscal year 2026. Among the key areas of focus, the committee emphasized the need to explore potential tax law changes concerning digital assets. This initiative is part of a broader effort to improve the nation’s tax code and administration, ensuring it keeps pace with evolving economic landscapes and technological advancements. The committee intends to closely review the growth in the tax-exempt sector and assess whether adjustments are necessary to address the implications of digital assets on the U.S. tax system. This focus reflects a commitment to modernizing tax policies to better support American workers, families, and businesses in a rapidly changing digital economy. For more information, click here.
On September 12, issued a notice inviting public comments on a proposed information collection regarding the costs of AML/CFT compliance. This survey aims to gather data on the direct compliance costs incurred by FDIC-supervised insured depository institutions, including any overlap with other activities such as fraud and credit card monitoring. The FDIC seeks a new OMB Control Number for this collection and plans to use it as a common form across federal banking agencies and the National Credit Union Administration. Comments on the proposal are due by November 12. The collected information will help assess the impact of BSA/CFT regulations and may inform deregulatory efforts consistent with the Trump administration’s executive orders. For more information, click here.
On September 11, the FTC announced that Eric Caldwell and David Hernandez will be permanently banned from the debt relief industry and required to surrender their assets to settle charges related to an illegal student loan debt-relief operation. The FTC alleged that Caldwell, Hernandez, and Dennise Merdjanian, operators of Nevada-based Superior Servicing, falsely claimed affiliations with the Department of Education to deceive borrowers into paying upfront fees, which were misrepresented as payments toward their student loans. The settlement includes a monetary judgment exceeding $45.9 million, partially suspended due to the defendants’ inability to pay, contingent upon their payment of over $1.6 million and the turnover of approximately $560,000 in assets. Caldwell is also banned from telemarketing, while Hernandez is prohibited from violating the Telemarketing Sales Rule. Litigation against Merdjanian and the corporate defendants is ongoing. For more information, click here.
On September 11, Securities and Exchange Commissioner Hester Peirce participated in a discussion at the CATO Institute conference in Washington, D.C., focusing on the goals and mission of the SEC and the effectiveness of the current U.S. financial regulatory system. Peirce emphasized the importance of preserving freedom in financial transactions and only intervening in cases of market failure. She advocated for reducing regulatory barriers to foster competition and innovation, suggesting that the SEC’s mission could benefit from explicitly including innovation as a goal. Peirce also discussed the potential of regulatory sandboxes to encourage innovation, particularly in the crypto space, and highlighted the need for coordination between regulatory bodies like the SEC and Commodity Futures Trading Commission to ensure a cohesive approach to emerging financial technologies. For more information, click here.
On September 10, the Financial Stability Oversight Council, led by Bessent, convened to discuss various priorities, including climate-related financial risks. During this meeting, the council voted to rescind the charters of its Climate-related Financial Risk Committee and Climate-related Financial Risk Advisory Committee. This decision marks a significant shift in the council’s approach to addressing climate change impacts on financial stability. The move suggests a reevaluation of how climate-related risks are integrated into the council’s broader financial oversight strategy, potentially reflecting changes in priorities or methodologies for assessing and mitigating such risks. For more information, click here.
On September 10, SEC Chairman Paul Atkins delivered a keynote address at the inaugural OECD Roundtable on Global Financial Markets in Paris, emphasizing the importance of international collaboration to foster global competition and economic growth. He highlighted the SEC’s commitment to modernizing regulations to accommodate digital assets, marking a shift towards clear, predictable rules to support innovation in the crypto industry. Atkins introduced “Project Crypto,” an initiative aimed at updating securities rules to facilitate on-chain markets and provide clarity on the security status of crypto assets. He underscored the need for the U.S. to become a leader in financial innovation, advocating for regulatory frameworks that balance investor protection with the freedom for entrepreneurs to thrive. Atkins also acknowledged the EU’s proactive approach with its Markets in Crypto-Assets (MiCA) regulation and expressed a desire for the U.S. to learn from these efforts to enhance transatlantic cooperation in financial markets. For more information, click here.
On September 5, the CFPB published its Semiannual Regulatory Agenda as part of the Spring 2025 Unified Agenda of Federal Regulatory and Deregulatory Actions. This agenda outlines the regulatory matters the CFPB plans to consider from June 2025 to May 2026, with a focus on updating projects from the Fall 2024 Agenda, reconsidering recent rulemakings, and introducing limited new initiatives. Notably, the CFPB is contemplating rulemaking activities related to unfair, deceptive, or abusive acts or practices under § 1031 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Additionally, the agenda includes a new long-term section addressing rules for mortgage lenders to assess consumers’ ability to repay loans and define “qualified mortgages.” The CFPB, currently under interim leadership, aims to refine its priorities and provide further updates in its Fall 2025 Unified Agenda. For more information, click here.
State Activities:
On September 17, the New York State Department of Financial Services (NYDFS) issued new guidance on the use of blockchain analytics tools. The release of this updated guidance aims to equip New York state-regulated banking organizations with advanced tools to manage the evolving risks associated with virtual currency-related activity. Building upon its prior blockchain guidance issued in 2022, NYDFS has responded to the growing interest and exposure to virtual currency-related activities as the driving force behind this updated guidance. The guidance encourages New York state banking organizations to incorporate blockchain analytics as a vital component of their risk management strategies, and it highlighted some primary use cases. For more information, click here.
On September 15, Oregon enacted three pro-consumer bills aimed at supporting families in the state by addressing medical debt, online transaction transparency, and car-buying practices. Senate Bill 605 prohibits medical debt from appearing on consumer reports. Senate Bill 430 mandates that online sellers disclose all mandatory fees upfront, ensuring consumers are aware of the total cost before purchase. House Bill 3178 enhances transparency in auto loans by requiring car dealers to provide clear disclosures in Oregon’s top six languages and shortening the timeframe for finalizing loans. These legislative measures take effect in 2026. For more information, click here.