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 October 2, the Consumer Financial Protection Bureau (CFPB) published a final rule in the Federal Register, officially extending compliance dates for its 2023 small business lending data collection and reporting rule under the Equal Credit Opportunity Act (ECOA) and Regulation B, which implements Section 1071 of the Dodd-Frank Act. The final rule replaces an interim rule released in June 2025 that pushed back compliance deadlines. This extension was issued by the CFPB in response to ongoing litigation by both industry and consumer advocacy groups, as well as court orders, to create a uniform timeline for financial institutions to comply with data collection and reporting requirements for women-owned, minority-owned, and small businesses. The CFPB has extended the compliance dates by approximately one year, providing additional preparation time for covered financial institutions. For more information, click here.
On October 2, the Board of Governors of the Federal Reserve System enacted final amendments to both Regulation A and Regulation D, reflecting decreases in key interest rates at Federal Reserve Banks. The primary credit rate was lowered from 4.50% to 4.25%, with the secondary credit rate automatically decreasing from 5.00% to 4.75% due to the primary credit rate action. Additionally, the interest rate on reserve balances (IORB) was reduced from 4.40% to 4.15%. These changes, effective immediately and applicable since September 18, align with the Federal Open Market Committee’s decision to reduce the target range for the federal funds rate. The amendments were made without the need for notice or public comment under the Administrative Procedure Act, as they pertain to loan-related matters and were deemed necessary to respond promptly to economic conditions. For more information, click here and here.
On October 1, Senate Banking Committee Chairman Tim Scott (R-SC) congratulated Travis Hill on his nomination by President Donald Trump to serve as chairman of the board of directors of the Federal Deposit Insurance Corporation (FDIC). Scott praised Hill’s principled leadership and extensive experience in banking policy, contrasting it with the previous leadership under former Chair Gruenberg during the Biden administration. Scott highlighted Hill’s commitment to fairness in the financial system, particularly his efforts to remove reputational risk from bank supervision and implement the FIRM Act to prevent debanking and discrimination against federally legal businesses and law-abiding Americans. Scott expressed his eagerness to collaborate with Hill to enhance the financial system, protect consumers, and ensure fairness, access, and accountability. For more information, click here.
On October 1, the U.S. Department of the Treasury announced an extension of the comment period for its advance notice of proposed rulemaking (ANPRM) regarding the implementation of the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act. Initially set to close on October 20, the comment period has been extended by 15 days, now concluding on November 4. This extension follows requests from interested parties seeking additional time to review and provide feedback on the ANPRM. Comments can be submitted electronically via the Federal Government eRulemaking portal or by mail, with all submissions becoming part of the public record. For more information, click here.
On October 1, the Federal Trade Commission (FTC) closed due to a lapse in government funding, halting updates to its website and social media properties and postponing all events until further notice. Similarly, two days prior, the Department of Housing and Urban Development (HUD) issued guidance for operations during a funding lapse, highlighting the potential use of limited carryover funding to sustain some government functions. HUD outlined that while certain activities, such as those funded through multi-year appropriations, may continue, most federal employees would be furloughed unless deemed “excepted” based on their roles. Both agencies emphasized the impact of the funding lapse on their operations, with HUD detailing specific program continuations and exceptions under its contingency plan. For more information, click here and here.
On October 1, federal financial institution regulatory agencies, including the Farm Credit Administration, Federal Deposit Insurance Corporation, Federal Reserve Board, National Credit Union Administration, and Office of the Comptroller of the Currency, issued a reminder to lenders regarding the continuation of loan issuance under federal flood insurance statutes during periods when the National Flood Insurance Program (NFIP) is unavailable. Lenders are permitted to make these loans without requiring federal flood insurance, provided they continue to perform flood determinations, deliver timely and accurate notices to borrowers, and adhere to other relevant flood insurance regulations. Additionally, lenders are advised to assess and manage safety, soundness, and legal risks prudently during the NFIP lapse period. The guidance also highlights the availability and use of private flood insurance. For more information, click here.
On September 30, Citizens Disability, LLC and its subsidiary agreed to pay a $1 million penalty to settle FTC allegations of making tens of millions of illegal telemarketing calls, including to numbers on the Do Not Call Registry. The FTC charged that Citizens Disability gathered consumer information through deceptive websites offering prizes and coupons, then used this data to make misleading calls about Social Security Disability Insurance (SSDI) benefits. The complaint, filed by the Department of Justice following an FTC referral, claims that between January 2019 and July 2022, the companies made more than 109 million telemarketing calls, violating the Telemarketing Sales Rule and the FTC Act. The proposed consent order prohibits certain telemarketing practices, mandates due diligence on lead generators, and includes a $2 million civil penalty, partially suspended upon a $1 million payment. For more information, click here.
On September 29, the U.S. Court of Appeals for the District of Columbia received a petition for rehearing en banc in the case of National Treasury Employees Union v. Russell Vought. The plaintiffs challenged the panel’s decision that allowed the Executive Branch to shut down the CFPB without congressional authorization or judicial review. The panel majority held that the shutdown was not reviewable agency action under the Administrative Procedure Act due to the lack of a formal public statement, and that it did not constitute unconstitutional action reviewable in equity. The plaintiffs argue that this decision conflicts with established precedent and poses significant risks to the separation of powers, urging the court to grant en banc review to address these critical constitutional issues. For more information, click here.
On September 29, the FTC filed a complaint against Iconic Hearts Holdings, Inc., the operator of the Sendit anonymous messaging app, and its CEO, Hunter Rice, for unlawfully collecting personal data from children and deceiving users. The FTC alleges that Sendit violated the Children’s Online Privacy Protection Rule (COPPA) by failing to notify parents and obtain consent before collecting data from children under 13. Additionally, the company is accused of misleading users into purchasing a premium “Diamond Membership” by sending fake messages and falsely promising to reveal the identities of anonymous message senders. The complaint, filed by the Department of Justice in the U.S. District Court for the Central District of California, also claims violations of the FTC Act and the Restore Online Shoppers’ Confidence Act (ROSCA). For more information, click here.
On September 29, the Office of Chief Counsel of the Division of Investment Management at the U.S. Securities and Exchange Commission (SEC) responded to a request from Simpson Thacher & Bartlett LLP regarding the treatment of state trust companies as “banks” under the Investment Advisers Act of 1940 and the Investment Company Act of 1940. The request sought assurance that the SEC would not recommend enforcement action against registered investment advisers or regulated funds for using state trust companies to custody crypto assets and related cash equivalents. The division indicated it would not recommend enforcement action under the Custody Provisions, provided certain conditions are met, including the implementation of sophisticated controls by state trust companies to safeguard crypto assets and compliance with state regulatory frameworks. This response reflects the division’s position on enforcement action and does not constitute a legal conclusion or alter applicable law. For more information, click here.
On September 29, the Division of Corporation Finance responded to DoubleZero’s request, confirming that it would not recommend enforcement action to the SEC regarding the Programmatic Transfers of 2Z tokens. These transfers, as described in DoubleZero’s letter dated September 25, are not required to be registered under § 5 of the Securities Act or as a class of equity securities under § 12(g) of the Exchange Act. The division’s position is based on the representations made in the letter, noting that any different facts or conditions might lead to a different conclusion. For more information, click here.
On September 29, Christopher J. Waller, a member of the board of governors of the Federal Reserve System, delivered remarks at the Sibos 2025 conference in Frankfurt, Germany, focusing on “The Next Frontier of Payments Innovation.” Waller highlighted the transformative potential of emerging technologies such as distributed ledgers, tokenized assets, smart contracts, and artificial intelligence in making payments more efficient and secure. He emphasized the importance of choice and competition in the financial market, noting that the coexistence of public and private forms of money, including stablecoins, can enhance consumer and business options. Waller also discussed the potential for new technologies to lower costs and improve the efficiency of payment systems, particularly in cross-border transactions. He emphasized the importance of regulatory frameworks like the GENIUS Act in maintaining trust and safety in the digital ecosystem. Waller concluded by emphasizing the complementary roles of the private and public sectors in fostering innovation and ensuring a resilient global financial system. For more information, click here.
On September 29, the Conference of State Bank Supervisors (CSBS) initiated a public comment period regarding proposed new business activities for the Nationwide Multistate Licensing System (NMLS), specifically focusing on Issuing Stablecoin and Virtual Currency Kiosk Operation. The CSBS, representing the NMLS Policy Committee, seeks feedback from the public on these proposed activities and definitions. Interested parties are encouraged to submit their comments, ensuring they include contact information, by emailing comments@csbs.org. All submissions will be reviewed by the NMLS Policy Committee and posted on the NMLS Resource Center. The deadline for comment submission is November 13, 2025, at 5 p.m. EST. For more information, click here.
On September 26, the SEC Chair Paul Atkins announced a return to the SEC’s prior practice of allowing individuals and entities facing enforcement actions to request that the SEC simultaneously consider both their settlement offers and any related waiver requests. Waivers may be necessary to avoid automatic disqualifications and collateral consequences that can result from enforcement actions, such as the loss of well-known seasoned issuer status, safe harbor protections, private offering exemptions, or the ability to serve in certain regulated capacities. The considerations typically undertaken by the SEC in connection with their evaluation of a waiver will remain the same — the difference here is the timing of that consideration (jointly with the settlement proposal), not the facts and circumstances that the staff will consider. Waiver requests remain subject to thorough review, and outcomes are not guaranteed. Prompt communication with SEC staff will be critical if a settlement is accepted but a waiver is denied. For more information, click here.
On September 25, the National Credit Union Administration (NCUA) announced the elimination of the use of “reputation risk” and similar concepts from its examination and supervisory processes, in compliance with Executive Order 14331, “Guaranteeing Fair Banking for All Americans,” issued by Trump on August 7. The executive order mandates federal banking regulators to remove references to reputation risk from their guidance documents, manuals, and other regulatory materials to prevent politicized or unlawful debanking practices. Effective immediately, NCUA employees will no longer consider reputation risk in their supervisory assessments of credit unions and Credit Union Service Organizations. The NCUA is currently updating its regulations, manuals, guidance, and training materials to reflect this change, and has instructed its examiners accordingly. Credit unions with questions are encouraged to contact their NCUA regional office for further information. For more information, click here.
On September 25, U.S. Federal Housing announced its formal withdrawal from the Network of Central Banks and Supervisors for Greening the Financial System (NGFS). In a letter to the NGFS Chair, U.S. Federal Housing Director William Pulte criticized previous policies under President Biden, claiming they prioritized climate activism over affordable housing. Pulte emphasized alignment with Trump’s executive orders, aiming to refocus efforts on facilitating homeownership through Fannie Mae and Freddie Mac. The agency also requested the removal of its participation from NGFS committees and public materials. For more information, click here.
State Activities:
On September 30, the new Texas Stock Exchange (TXSE) announced that the SEC approved its Form 1 registration statement, officially approving the exchange. Accordingly, the TXSE is now officially a recognized national securities exchange, similar to the Nasdaq Stock Market and the New York Stock Exchange, both of which the TXSE has expressly targeted as its main competitors in past public statements. In the TXSE’s own words, this makes it the “first fully integrated national securities exchange to receive SEC approval in decades” offering, within a single platform, a comprehensive suite of services, including listing standards, trading, clearing, settlement, and market data. In its order approving the TXSE’s Form 1 registration statement, the SEC noted that it had received a number of comment letters that it considered in making its decision, citing letters from political officeholders as well as representatives of significant market participants, and scholars at academic institutions, in their individual capacity. Some of the commenters expressed hope that added competition would potentially cause existing exchanges to lower their fees and generally enhance capital formation and increase efficiency, while another asserted that a new exchange would simply add to market fragmentation and complicate infrastructure. For more information, click here.
On September 30, Superintendent Adrienne Harris of the New York State Department of Financial Services (NYDFS) updated guidance concerning virtual currency customer protections in the event of insolvency. This update reflects the growing demand for virtual currency custodial services and emphasizes the importance of ensuring that beneficial interest remains with customers during insolvency proceedings. The guidance provides detailed expectations for sub-custodians and sub-custodial service agreements, clarifies permissible uses of customer assets, and reiterates sound custody and disclosure practices. Harris highlighted the significance of guidance as a regulatory tool to adapt to evolving circumstances, particularly with the increasing use of sub-custodial relationships in the digital asset space. The updated guidance supersedes the previous version issued in January 2023 and aims to protect New Yorkers by setting clear expectations for licensed entities. For more information, click here.
On September 29, New York Governor Kathy Hochul announced that Superintendent Harris will depart from the NYDFS after four years of service, with Kaitlin Asrow appointed as the acting superintendent effective October 18, 2025. Hochul praised Harris for her contributions in transforming the department into a leading financial regulator and for her efforts in recovering more than $725 million in restitution for New Yorkers. Under Harris’s leadership, the NYDFS has made significant strides in creating a fairer financial system, including expanding Banking Development Districts, regulating virtual currency companies, and setting guidelines for the use of artificial intelligence in insurance. Asrow, who previously led the Research & Innovation division at NYDFS and has a background with the Federal Reserve System, will succeed Harris, bringing her expertise in virtual currency regulation and technological infrastructure investment to her new role. For more information, click here.
On September 29, the California Department of Financial Protection and Innovation (DFPI) announced significant modifications to the proposed regulations under the Digital Financial Assets Law (DFAL) and the Money Transmission Act (MTA). These changes are part of an ongoing effort to refine the regulatory framework governing digital financial assets and ensure clarity in the application of these laws. Among other things, the modifications clarify exemptions for digital financial asset transactions from the MTA. Specifically, activities now regulated under the DFAL, such as transmission and storage of digital assets, are exempt from the MTA to prevent redundant regulation. Also, § 1250 introduces a certification requirement for covered exchanges listing digital financial assets, ensuring compliance with disclosure and risk assessment protocols. For more information, click here.
On September 26, Arizona Attorney General Kris Mayes announced the implementation of the new Cryptocurrency ATM Scams Prevention law, aimed at protecting seniors from scams involving cryptocurrency ATMs. The law, effective immediately, introduces measures such as reducing daily transaction limits to $2,000 for new customers and $10,500 for existing customers, mandating new warning signs on ATMs, and requiring operators to issue refunds to fraud victims within 30 days of a reported incident. With approximately 600 cryptocurrency ATMs across Arizona and a reported $177 million lost to cryptocurrency fraud in 2024, the law seeks to address the significant financial losses experienced by Arizonans, particularly those over 60, who are often targeted by scammers. Mayes, in collaboration with Yavapai County Sheriff David Rhodes, has also initiated consumer alerts and the installation of “STOP” signs on ATMs to prevent further scams. For more information, click here.
On September 26, Hochul reaffirmed her commitment to enhancing affordability and access to financial services in underserved communities by announcing new guidance from the NYDFS. This guidance allows state-chartered banks to receive Community Reinvestment Act (CRA) credit for lending to or investing in Community Development Financial Institutions (CDFIs), even if their 2024 federal certification has lapsed. This initiative aims to protect crucial investments in CDFIs, which are instrumental in providing affordable housing, small business financing, and essential services to minority communities. Hochul emphasized the importance of supporting CDFIs amidst federal challenges, ensuring that these mission-driven institutions continue to foster economic growth and financial inclusion across New York. For more information, click here.
On September 25, a coalition of state attorneys general submitted a letter to Russell Vought, acting director of the CFPB, opposing a proposed rule that seeks to redefine the legal standard for supervisory designation proceedings. The attorneys general of New York, California, Colorado, Connecticut, Delaware, the District of Columbia, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, North Carolina, Oregon, Rhode Island, Vermont, and Washington, as well as the Hawaii Office of Consumer Protection argue that the proposed rule imposes arbitrary and restrictive limits on the CFPB’s authority to oversee nonbank entities, such as digital wallet providers and peer-to-peer payment processors, which have become increasingly significant in consumer financial markets. The attorneys general contend that the rule contradicts the statutory framework established by Congress in the Dodd-Frank Act, which was designed to provide the CFPB with flexible authority to address emerging consumer protection issues. They urge the CFPB to abandon the proposed rule, emphasizing that it could increase risks of financial harm to consumers by limiting oversight of nonbank financial services. For more information, click here.