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 January 10, the Consumer Financial Protection Bureau (CFPB) announced a call for public input on enhancing privacy protections and preventing harmful surveillance in digital payments, especially those offered by large technology platforms. The agency seeks comments on applying existing financial privacy laws to new digital payment mechanisms and addressing issues like intrusive data collection and personalized pricing. Additionally, the CFPB proposed an interpretive rule to clarify how the Electronic Fund Transfer Act (EFTA) applies to emerging digital payment systems, including those used by Big Tech and video gaming platforms, as well as stablecoins. The CFPB’s stated aim is to ensure consumer protection against errors and fraud in these new payment methods and to prevent traditional banks and credit unions from being disadvantaged by new market entrants. Public comments on these initiatives are invited by March 31, 2025, for the interpretive rule and by April 11, 2025, for the privacy data request. For more information, click here.

On January 10, Federal Deposit Insurance Corporation (FDIC) Vice Chairman Travis Hill delivered a speech at an American Bar Association event outlining his vision for the agency’s future direction. He emphasized the need for the FDIC to shift its focus from process-oriented supervision to addressing core financial risks, particularly in light of the 2023 regional bank failures. Vice Chairman Hill advocated for a more open-minded approach to innovation and technology adoption, including revitalizing the FDIC’s innovation lab, FDiTech, and providing clearer guidance on fintech partnerships and digital assets. He also addressed the issue of “debanking,” stressing the importance of ensuring access to banking services for law-abiding customers. Additionally, Vice Chairman Hill criticized the FDIC’s current focus on climate-related financial risks and called for a reassessment of capital requirements under the Basel endgame agreement. He concluded by expressing his commitment to addressing a range of policy issues in the coming months and years. For more information, click here.

On January 8, the CFPB officially recognizedFinancial Data Exchange, Inc. (FDX) as the first standard-setting body under the Personal Financial Data Rights promulgated rule under Section 1033 of the Dodd-Frank Act. This rule, released in October 2024, requires depository and nondepository entities to make available to consumers and authorized third parties certain data relating to consumers’ accounts, establish obligations for third parties accessing a consumer’s data, and provide basic standards for data access. The CFPB’s approval order was based on the CFPB’s assessment of FDX’s application, FDX’s practices and procedures, and additional FDX documentation, including the organization’s certificate of incorporation and bylaws as well as comments received from interested parties following publication of FDX’s application. FDX’s approval is subject to several conditions aimed at ensuring transparency, fairness, and the prevention of conflicts of interest. For more information, click here.

On January 8, the United States District Court for the Southern District of New York dismissed the claims brought by Banco San Juan Internacional, Inc. (BSJI) against the Federal Reserve Bank of New York (FRBNY) and the Board of Governors of the Federal Reserve System. BSJI alleged that the termination of its master account by the FRBNY violated various federal laws. The ruling in the BSJI case underscores the discretionary authority of Federal Reserve Banks in granting or denying master accounts. For more information, click here.

On January 8, the CFPB Office for Older Americans and Office of Students and Young Consumers released a report highlighting the impact of forced collections on Social Security benefits for borrowers with defaulted federal student loans. The report reveals that the Department of Education’s resumption of collections, paused during the COVID-19 pandemic, will affect nearly 6 million borrowers, including approximately 452,000 individuals aged 62 and older who rely on Social Security. According to the report, the forced collection of Social Security benefits has grown exponentially, increasing by over 3,000% from 2001 to 2019. According to the CFPB, this practice has significant adverse effects, pushing many older borrowers into poverty and undermining the Social Security program’s purpose. The report calls for alternative approaches to mitigate the financial hardship caused by these collections and suggests that the current protections are insufficient to prevent poverty among affected beneficiaries. For more information, click here.

On January 8, the Federal Communications Commission (FCC) announced the adoption of stricter filing requirements for the Robocall Mitigation Database. The new rules mandate that all voice service and intermediate providers certify their STIR/SHAKEN implementation, describe their robocall mitigation plans, and provide other necessary information. The FCC’s Report and Order introduces fines for false or outdated information, requires annual re-certification, and imposes a $100 filing fee. Additionally, the FCC’s Wireline Competition Bureau will establish a dedicated reporting mechanism and two-factor authentication for database access. This follows a significant enforcement action against 2,411 non-compliant companies. For more information, click here.

On January 8, the CFPB announced the restoration of the Trump-era Compliance Assistance Sandboxes and No-Action Letters programs, with modifications apparently aimed at reducing company-specific benefits that could hinder competition. These programs are purportedly intended to foster innovations that address unmet needs in consumer financial markets. The updated guidelines include conditions ensuring that innovations maintain market integrity, promote transparency, and meet high ethical standards. The CFPB will also prevent firms from advertising their approvals to avoid creating a false appearance of regulatory endorsement. These policy statements were published in the Federal Register on January 10 and will become effective 60 days later. For more information, click here and here.

On January 7, the Chairman of the U.S. Commodity Futures Trading Commission (CFTC) announced his resignation after more than seven years of service, effective January 20th, with his final day being February 7th. Reflecting on his tenure since 2017, he expressed pride in the Commission’s efforts to support economic growth, financial stability, and market predictability. He highlighted the agency’s resilience amid various challenges and its commitment to addressing regulatory gaps and fostering innovation. He extended gratitude to President Biden, Senator Stabenow, and Senator Schumer for their support and committed to ensuring a smooth transition with President Trump’s team. For more information, click here.

On January 7, the CFPB finalized its ruleaimed at removing an estimated $49 billion in medical bills from the consumer reports of approximately 15 million Americans. Specifically, the CFPB’s rulemaking as finalized removes an existing exception in Regulation V that permitted lenders to obtain and use information on medical debts. The final rule is scheduled to take effect 60 days after its publication in the Federal Register. That same day, a lawsuit challenging the CFPB’s final rule was filed in the U.S. District Court for the Eastern District of Texas that same day. The plaintiff trade associations argue that the rule exceeds the CFPB’s statutory authority and is arbitrary and capricious. For more information, click here.

On January 6, the CFPB issued an advisory opinion rescinding a previous opinion from November 2020, which had stated that a specific type of “earned wage” product did not constitute “credit” under the Truth in Lending Act (TILA) and Regulation Z. The CFPB’s decision to rescind the 2020 opinion was based on significant flaws in its legal analysis and the substantial regulatory uncertainty it created. The rescinded opinion had narrowly defined conditions under which earned wage products were not considered credit, but this led to confusion and misinterpretation in the market. The new advisory opinion aims to clarify the regulatory status of these products and ensure they are appropriately classified under TILA and Regulation Z. For more information, click here.

State Activities:

On January 8, New York became the latest state to introduce legislation aimed at regulating Earned Wage Access (EWA) services. Assembly Bill 258 titled — “An Act to Amend the Banking Law, in Relation to Providing for Income Access Services in the State” — contains several significant provisions that, if passed, will significantly impact EWA providers in New York. For example, EWA providers must obtain a license from the New York Department of Financial Services (DFS) to operate within the state and the DFS Superintendent is authorized to impose an “earned income access rate cap,” which limits the amount that can be charged for EWA transactions. For more information, click here.

On January 7, the Federal Trade Commission (FTC) and the New York Attorney General announced action against Handy Technologies, also known as Angi Services, for allegedly misleading workers about potential earnings. According to the complaint, Handy advertised that workers who do gig jobs through their platform — such as cleaning homes and doing repair and maintenance projects — will be paid specific amounts and will be paid “as soon as the job is done.” However, it is alleged that new workers on the platform are by default generally paid seven days after the work they do is complete. Workers seeking to be paid sooner must pay an additional fee and can only do so after completing another job. The complaint further alleges that Handy regularly charges its workers fees and fines that it fails to adequately disclose. As part of a proposed settlement, Handy will pay $2.95 million in refunds and implement business practice changes, including obtaining clear consent from workers for any fees and providing transparent information on avoiding fines. For more information, click here.

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Photo of Ethan G. Ostroff Ethan G. Ostroff

Ethan’s practice focuses on financial services litigation and compliance counseling, as well as digital assets and blockchain technology. With a long track record of successful litigation results across the U.S., both bank and non-bank clients rely on him for comprehensive advice throughout their

Ethan’s practice focuses on financial services litigation and compliance counseling, as well as digital assets and blockchain technology. With a long track record of successful litigation results across the U.S., both bank and non-bank clients rely on him for comprehensive advice throughout their business cycle.

Photo of Elizabeth Briones Elizabeth Briones

Elizabeth is an associate in the Consumer Financial Services practice who represents businesses large and small – from corporations to local partnerships. She is an experienced litigator with a background in complex matters ranging from corporate contract disputes, premises liability, negligence, fraud, and…

Elizabeth is an associate in the Consumer Financial Services practice who represents businesses large and small – from corporations to local partnerships. She is an experienced litigator with a background in complex matters ranging from corporate contract disputes, premises liability, negligence, fraud, and other business torts. She has appeared in state, federal, and multidistrict litigation.

Photo of Jed Komisin Jed Komisin

Jed defends clients engaged in civil litigation. He has significant courtroom experience and works with his clients to find comprehensive solutions to their legal issues.

Photo of Trey Smith Trey Smith

Trey is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement Practice. He focuses his practice on helping financial institutions and consumer facing companies navigate regulatory investigations and resulting litigation. He has experience litigating the Consumer Financial Protection Act, the FTC Act…

Trey is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement Practice. He focuses his practice on helping financial institutions and consumer facing companies navigate regulatory investigations and resulting litigation. He has experience litigating the Consumer Financial Protection Act, the FTC Act, the Truth in Lending Act, state UDAAP statutes, and other consumer protection laws.

Photo of Thailer Buari Thailer Buari

Thailer is an attorney in the firm’s Consumer Financial Service practice, where he represents clients in consumer law, business disputes, and commercial litigation. Thailer manages cases from inception to trial, focusing on all aspects of the litigation process, including case development, settlement negotiations…

Thailer is an attorney in the firm’s Consumer Financial Service practice, where he represents clients in consumer law, business disputes, and commercial litigation. Thailer manages cases from inception to trial, focusing on all aspects of the litigation process, including case development, settlement negotiations, legal research and analysis, document review, motions hearings, and mediations.