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 March 7, the Consumer Financial Protection Bureau (CFPB) announced an extension of the comment period for its Advance Notice of Proposed Rulemaking (ANPR) concerning the Fair Credit Reporting Act (Regulation V) related to identity theft and coerced debt. Initially published on December 13, 2024, the ANPR sought public input on issues regarding information furnished to credit bureaus and other consumer reporting agencies due to coercion. The original comment period was set to close on March 7, but to provide interested parties more time to submit their feedback, the CFPB has extended the deadline to April 7. For more information, click here.
On March 7, the Office of the Comptroller of the Currency (OCC) issued a significant update regarding the involvement of national banks and federal savings associations in cryptocurrency activities. Interpretive Letter 1183 confirms that national banks and federal savings associations can engage in the following cryptocurrency activities: providing custody services for crypto-assets, including holding and managing digital assets on behalf of customers; holding dollar deposits that serve as reserves backing stablecoins under certain conditions; and acting as nodes on distributed ledger networks, including verifying and processing transactions on blockchain networks. One of the most notable changes in Interpretive Letter 1183 is the rescission of the requirement for OCC-supervised institutions to obtain supervisory nonobjection before engaging in the specified cryptocurrency activities. Previously, banks had to demonstrate that they had adequate controls in place and receive explicit approval from the OCC. For more information, click here.
On March 7, President Donald Trump delivered remarks at the White House Digital Assets Summit, emphasizing the administration’s commitment to making America the global leader in Bitcoin and cryptocurrency. During the summit, Trump announced the creation of the Strategic Bitcoin Reserve, a virtual Fort Knox for digital gold, to be housed within the U.S. Treasury. This initiative aims to position the U.S. at the forefront of digital asset innovation and ensure regulatory clarity for the industry. The president also highlighted efforts to end regulatory actions that have hindered the growth of the crypto sector and expressed strong support for legislative measures to provide certainty for dollar-backed stablecoins and the broader digital assets market. The summit featured key figures from the administration and industry leaders, all underscoring the importance of embracing technological advancements to drive economic growth and maintain the U.S.’s leadership in the global financial system. For more information, click here.
On March 6, a Senate banking panel voted to advance Trump’s nomination of former regulator Jonathan McKernan to lead the CFPB. The vote, which was split along party lines with all Republicans in favor and all Democrats opposed, resulted in a 13 to 11 decision. This advancement clears McKernan’s nomination for a full Senate vote at a later date. For more information, click here.
On March 5, the House Financial Services Committee (HFSC) held its first legislative markup of the 119th Congress, during which it approved Chair Hill’s (R-AR) Congressional Review Act resolution (H.J. Res. 59) to overturn the CFPB’s overdraft rule finalized in December of the previous year. The resolution passed along party lines with a vote of 30-19. For more information, click here.
On March 5, the U.S. Senate voted in favor of S.J.Res.28, a joint resolution disapproving the rule submitted by the CFPB regarding “Defining Larger Participants of a Market for General-Use Digital Consumer Payment Applications.” Sponsored by Senator Pete Ricketts (R-NE) and introduced on February 27, the resolution nullifies the CFPB’s final rule published on December 10, 2024, which defined larger participants in the digital consumer payment application market as nonbanks with an annual volume of at least 50 million transactions and not classified as small business concerns. The Senate passed the resolution by a narrow margin of 51-47, and it now moves to the House. For more information, click here.
On March 3, the Federal Deposit Insurance Corporation’s (FDIC) board of directors approved the withdrawal of three outstanding proposed rules concerning brokered deposits, corporate governance, and the Change in Bank Control Act (CBCA). Additionally, the FDIC rescinded the authority for staff to publish a proposed rule related to incentive-based compensation arrangements. The brokered deposits proposal, published on August 23, 2024, would have significantly altered the deposit landscape, while the corporate governance proposal from October 11, 2023, aimed to impose stringent expectations on management and boards of FDIC-supervised institutions with assets over $10 billion. The CBCA proposal, published on August 19, 2024, sought to eliminate an exemption for submitting acquisition notices to the FDIC. The incentive-based compensation proposal, approved on May 3, 2024, was never published. For more information, click here.
On March 3, a letter was sent to Secretary of the Treasury Scott Bessent by House Financial Services Committee Chair Hill (R-AR) and Senate Banking Committee Chair Scott (R-SC) and 30 other Republican committee members, urging the prompt appointment of a new vice chair for supervision (VCS) of the Board of Governors of the Federal Reserve System. The letter emphasized the need for a strong leader to address critical tasks such as reversing politicized regulations from the Biden administration, ensuring accountability, and optimizing the board’s regulatory and supervisory functions. The urgency follows the announcement that current VCS Michael Barr would step down effective February 28, with the board pausing major rulemakings until a successor is confirmed. The letter highlighted past leadership gaps that contributed to significant bank failures and stressed that filling the VCS role swiftly is essential for fostering a prosperous U.S. economy and conducting meaningful regulatory reviews. For more information, click here.
On March 3, the National Credit Union Administration (NCUA) announced changes to its policy on publishing overdraft and nonsufficient fund (NSF) fee income for individual credit unions. Chairman Kyle S. Hauptman stated that, to better support Americans struggling with inflation, the NCUA will no longer publicly disclose this data for individual credit unions but will continue to collect it during supervisory examinations. This change, effective with the March 31 Call Report cycle, aims to prevent credit unions from avoiding service to low-income and underserved communities due to the previous data collection policy. The NCUA will still publish aggregate data once updates to its examination system are complete. Hauptman emphasized the importance of balancing consumer protection with the need for financial tools and discussed the broader goal of reducing regulatory burdens to support small and newly formed credit unions. For more information, click here.
On March 2, the Treasury Department announced the suspension of enforcement of the Corporate Transparency Act against U.S. citizens and domestic reporting companies. This decision includes halting penalties or fines related to the beneficial ownership information reporting rule under the current regulatory deadlines and after the forthcoming rule changes take effect. Additionally, the Treasury Department plans to issue a proposed rulemaking to limit the scope of the rule to foreign reporting companies only. Bessent hailed the decision as a victory for common sense and a key part of Trump’s agenda to reduce regulatory burdens and promote American prosperity. For more information, click here.
On February 27, the Federal Trade Commission (FTC) successfully obtained a temporary restraining order against Blackrock Services, Inc. and its associated entities and individuals. The FTC’s complaint alleges that the defendants sent letters to consumers falsely claiming that they owed money on small dollar loans. These letters threatened legal action, damage to credit scores, and other severe consequences if the purported debts were not paid. The defendants allegedly misrepresented themselves as law firms and used various fictitious business names to bolster their credibility. The court, after reviewing the FTC’s complaint, declarations, exhibits, and supporting memorandum, found good cause to believe that the defendants engaged in deceptive practices and issued a restraining order with key provisions including prohibiting defendants from making false statements, an asset freeze, appointment of a receiver, and expedited discovery. For more information, click here.
State Activities:
On March 7, the Senate of Utah passed a Bitcoin bill that notably excluded a provision allowing the state treasurer to invest in the largest cryptocurrency. Instead, the bill offers the state’s residents fundamental custody protections and affirms their rights to mine bitcoin, operate nodes, and participate in staking, among other provisions. With the Senate’s approval, the bill now advances to Governor Spencer Cox for his signature to become law. For more information, click here.
On March 3, during National Consumer Protection Week, Massachusetts Attorney General Andrea Joy Campbell announced the adoption of new consumer protection regulations in Massachusetts aimed at prohibiting “junk fees” and ensuring price transparency. Effective September 2, these regulations require businesses to clearly disclose all fees upfront, enable easy cancellation of trial offers and subscriptions, and prevent unnecessary charges. The regulations, promulgated as 940 CMR 38.00, mandate that businesses provide the total price of a product, including any mandatory charges, whenever pricing information is presented. They also require clear instructions for avoiding optional fees and straightforward processes for canceling subscriptions. For more information, click here.
On February 27, Texas State Senator José Menéndez (D) introduced Senate Bill 1736, a piece of legislation aimed at regulating convenience fees associated with electronic payments for motor vehicles. SB 1736 would allow such fees to be imposed to offset electronic payment processing costs as long as certain restrictions are met and disclosures are made. The restrictions, include: the fee must be reasonably related to the actual expense incurred in processing the electronic payment; the fee cannot exceed the lesser of $10 or 5% of the payment amount; and the holder or agent must offer an alternative payment method that does not incur a fee, such as payment by check, cash, or money order. For more information, click here.