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.
On May 3, Democratic senators expressed significant opposition to recent changes in a bipartisan cryptocurrency bill, creating turmoil in the Senate over one of President Donald Trump’s legislative priorities. The bill, led by Sen. Bill Hagerty (R-Tenn.), aims to establish a federal regulatory framework for stablecoins pegged to the U.S. dollar, aligning with Trump’s financial policy agenda. However, nine key Senate Democrats, including some who previously supported the bill, have voiced concerns that the revised proposal fails to adequately address issues like money laundering and financial system protection. The Trump family’s involvement in the crypto sector further complicates the political landscape surrounding the legislation. For more information, click here.
On May 1, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) identified Cambodia-based Huione Group as a primary money-laundering concern under Section 311 of the USA PATRIOT Act. FinCEN issued a notice of proposed rulemaking to sever Huione Group’s access to the U.S. financial system due to its role in laundering proceeds from cyber heists by the Democratic People’s Republic of Korea (DPRK) and transnational criminal organizations in Southeast Asia. These activities include convertible virtual currency (CVC) investment scams, known as “pig butchering” scams, and other CVC-related scams. The proposed rule aims to prohibit U.S. financial institutions from maintaining accounts for Huione Group, which has allegedly laundered at least $4 billion in illicit proceeds. The group’s operations are further compromised by inadequate anti-money laundering and know-your-customer policies. FinCEN’s proposal is open for public comment within 30 days of its publication in the Federal Register. For more information, click here.
On May 1, the Securities and Exchange Commission (SEC) officially dropped its lawsuit against crypto influencer Ian Balina, marking a significant shift in the agency’s enforcement approach under the Trump administration. Balina was accused of promoting unregistered securities through Sparkster (SPRK) tokens during the 2018 ICO boom. The SEC’s decision aligns with a broader trend of reduced crypto enforcement following the appointment of former crypto lobbyist Paul Atkins as SEC chair. The SEC’s agreement to drop the case also includes Balina’s consent to dismiss the Interlocutory Appeal. Balina has waived any rights to seek reimbursement of attorney’s fees or costs related to the litigation and appeal under various legal provisions, including the Equal Access to Justice Act. For more information, click here.
On May 1, the Federal Trade Commission (FTC) announced its intention to permanently ban Global Circulation, Inc. (GCI) and its owner, Kenneth Redon III, from the debt collection industry. The FTC alleged that GCI and Redon used intimidation tactics, including threats of arrest and lawsuits, to coerce consumers into paying debts they did not owe. Additionally, they falsely claimed affiliations with specific lenders, violating the FTC’s Impersonation Rule. The proposed order not only bans GCI and Redon from debt collection activities but also prohibits them from misrepresenting material facts related to any goods or services and from violating the Gramm-Leach-Bliley Act. A monetary judgment of $9,684,338 has been imposed, which will be suspended once Redon and GCI surrender their remaining assets, with the full amount due if they are found to have misrepresented their financial status. For more information, click here.
On April 30, the Treasury Borrowing Advisory Committee (TBAC), which meets quarterly with and presents their observations to the Treasury Department on the overall strength of the U.S. economy as well as provides recommendations on a variety of technical debt management issues, presented a comprehensive analysis on the evolving landscape of digital money, with a particular focus on the burgeoning stablecoin market. As the cryptocurrency and digital asset economy expands, stablecoins have emerged as a pivotal component, blurring the lines between traditional money funds and payment stablecoins. This convergence is further complicated by some stablecoins beginning to offer interest, while money market funds explore tokenization. The U.S. Congress is actively considering legislation to define collateralized dollar-backed payment stablecoins, which could have significant implications for Treasury demand, the dominance of the U.S. dollar, and the operations of insured depository institutions. The TBAC presentation also raised concerns about the potential risks posed by tokenized money funds if they are permitted to compete with other payment or settlement instruments. The discussion highlighted the need for a nuanced understanding of how these developments might reshape financial markets and regulatory frameworks. For more information, click here.
On April 29, Acting Comptroller of the Currency Rodney E. Hood delivered pre-recorded remarks at the National Fair Housing Alliance’s Responsible AI Symposium, emphasizing the transformative role of artificial intelligence (AI) in financial services. Hood highlighted his commitment to financial inclusion, describing it as the civil rights challenge of our generation, and underscored the importance of responsibly expanding access to capital. He discussed the Office of the Comptroller of the Currency’s (OCC) efforts to promote the ethical use of AI, including developing regulatory frameworks and establishing the Office of Financial Technology to support AI-related innovations. Hood also praised the OCC’s Project REACh for its impact on financial inclusion, citing initiatives that have enabled credit access for underserved communities. He called for collaboration among stakeholders to ensure AI technologies enhance society and uphold shared values. For more information, click here.
On April 28, the U.S. Court of Appeals for the District of Columbia Circuit issued an order temporarily halting the Consumer Financial Protection Bureau’s (CFPB) mass layoffs. The court granted an emergency motion to enforce or clarify its previous order, reinstating the preliminary injunction that prevents the CFPB from executing reductions in force (RIFs). The district court previously barred the CFPB from terminating employees except for cause. However, the D.C. Circuit partially stayed this injunction, allowing terminations of employees deemed unnecessary after a “particularized assessment” of whether they were necessary to fulfill the CFPB’s statutorily required functions. Days later, approximately 1,400-1,500 employees received RIF notices, leaving the CFPB with just over 200 personnel. The union representing CFPB employees filed an emergency motion, arguing that the reduction interfered with the CFPB’s statutory duties and questioning the validity of the “particularized assessment.”
The Court of Appeals granted the union’s emergency motion in part, clarifying the definition of “particularized assessment” and lifting the partial stay of the preliminary injunction. The court emphasized the need for interim protection to ensure plaintiffs can receive meaningful relief should the CFPB not prevail in the appeal. This decision temporarily halts the RIF, pending further review. For more information, click here.
On April 28, the Federal Communications Commission (FCC) announced a proposal to close a loophole that has allowed robocallers to evade caller ID authentication tools. The STIR/SHAKEN framework, crucial for identifying and blocking malicious robocalls, loses its effectiveness when calls traverse non-IP network technologies, stripping them of their digital fingerprints. The FCC’s action aims to ensure that calls maintain their digital integrity even when passing through older network systems. After years of delaying the TRACED Act’s deadline for implementing authentication frameworks for non-IP calls, the FCC is now seeking public comment on potential solutions and considering further improvements. The Notice of Proposed Rulemaking outlines criteria for evaluating frameworks against TRACED Act standards, suggesting that two existing frameworks meet these standards while soliciting feedback on a third. If finalized, providers will have two years to comply with the new rules. For more information, click here.
On April 28, in the U.S. District Court for the District of Columbia, Todd M. Harper and Tanya F. Otsuka, both in their personal and official capacities as members of the National Credit Union Administration (NCUA) Board, filed a complaint for declaratory and injunctive relief against several defendants, including Scott Bessent, Larry Fazio, Kyle S. Hauptman, Trent Morse, and Trump, in their official capacities. The plaintiffs challenge the legality of their removal by Trump, asserting that their termination was without cause and violated statutory protections designed to ensure the independence of the NCUA. The complaint seeks to restore the plaintiffs to their positions, arguing that their removal undermines the integrity of the NCUA, an independent federal agency responsible for overseeing credit unions and safeguarding over $2 trillion in assets. For more information, click here.
On April 25, Nasdaq Inc. submitted a detailed response to the SEC, addressing Commissioner Hester Peirce’s statement on digital assets regulation. Nasdaq expressed appreciation for the renewed focus on digital assets by the new administration and the SEC, emphasizing the importance of establishing a clear taxonomy to effectively regulate digital assets under existing and future securities laws. Nasdaq highlighted its role in pioneering technological advancements in trading and regulatory frameworks, advocating for investor-focused regulatory changes. The response outlined several principles for digital assets regulation, including prioritizing investor interests, embracing innovation prudently, and ensuring a level playing field for competition. Nasdaq proposed a comprehensive taxonomy for digital assets, distinguishing between financial securities, digital asset investment contracts, digital asset commodities, and other digital assets, while recommending collaboration with the Commodities Futures Trading Commission (CFTC) to foster a robust digital assets ecosystem. For more information, click here.
On April 23, the FBI’s Internet Crime Complaint Center (IC3) released its 2024 Internet Crime Report, revealing a significant increase in internet crime losses, totaling more than $16 billion — a 33% rise from the previous year. The report, based on 859,532 complaints, identified phishing/spoofing, extortion, and personal data breaches as the top cyber crimes. Investment fraud, particularly involving cryptocurrency, accounted for the highest losses at over $6.5 billion. California, Texas, and Florida reported the most complaints, with individuals over 60 suffering nearly $5 billion in losses. FBI Director Kash Patel emphasized the importance of public reporting to combat cyber-enabled crimes effectively. For more information, click here.
On April 21, Representative Zach Nunn (R-IA) introduced the bipartisan Guarding Unprotected Aging Retirees from Deception (GUARD) Act, aimed at protecting Iowa retirees from financial fraud and scams, particularly “pig butchering” schemes. Co-led by Representatives Josh Gottheimer (D-NJ) and Scott Fitzgerald (R-WI), the bill seeks to empower law enforcement with advanced tools, including blockchain technology, to effectively investigate and combat these scams. The GUARD Act purportedly responds to the alarming rise in financial fraud targeting older Americans, with significant financial losses reported. By allowing state and local law enforcement to access federal grant funding and collaborate with federal agencies, the legislation aims to enhance the capacity to trace and prosecute fraudsters. For more information, click here.
On April 21, Representative Nydia M. Velázquez (D-NY) introduced H.R.2982, a bill aimed at amending the Internal Revenue Code of 1986 to modify the sourcing rules for digital asset income of Puerto Rican residents. This legislative proposal seeks to address the tax treatment of digital asset income, potentially impacting how Puerto Rican residents report and pay taxes on such income. The bill was referred to the House Committee on Ways and Means for further consideration. For more information, click here.
On April 17, Senator Bernie Moreno introduced the Deploying American Blockchains Act, a bipartisan initiative aimed at positioning the United States as a leader in blockchain technology development. Supported by Senators Tim Sheehy (R-MT) and Lisa Blunt Rochester (D-DE), the bill seeks to ensure the U.S. maintains a competitive edge in the rapidly evolving global blockchain marketplace. The legislation emphasizes the importance of blockchain in modernizing manufacturing processes, enhancing supply chain transparency, and fostering industrial innovation. The Digital Chamber has endorsed the bill, highlighting its potential to establish a national strategy for blockchain technology by engaging stakeholders and setting clear principles for its use. This legislative effort is complemented by a companion bill introduced in the House on February 27, 2025, by Representatives Cammack (R-FL) and Soto (D-FL), which directs the secretary of commerce to promote U.S. competitiveness in blockchain and distributed ledger technologies. For more information, click here and here.
Recently, the SEC’s Crypto Task Force released links to comments and AI-generated summaries of responses to 48 questions posed by Peirce in her statement, “There Must Be Some Way Out of Here,” dated February 21. The task force emphasized that the “Key Points” and “Topics” generated by AI have not been reviewed for accuracy or completeness, and readers are encouraged to engage directly with the written submissions for a comprehensive understanding. The SEC hopes that sharing these unmodified submissions will foster productive dialogue and ongoing engagement. For more information, click here.
On May 2, Arizona Governor Katie Hobbs vetoed Senate Bill 1025, which proposed the establishment of a digital assets reserve managed by the state, utilizing seized funds to invest in Bitcoin. The bill, which narrowly passed the state House with a 31–25 vote, aimed to make Arizona the first U.S. state to incorporate Bitcoin into its financial reserves. Hobbs rejected the bill, citing concerns over the volatility and untested nature of virtual currency investments. For more information, click here.
On April 29, the Roswell, NM City Council announced the establishment of a bitcoin reserve aimed at supporting senior citizens by subsidizing their water bills after a 10-year holding period. The reserve, which will not utilize taxpayer funds or city resources, could also serve as an emergency fund if it exceeds $1 million, allowing up to 21% of its value to be used for disaster relief with unanimous council approval, exercisable once every five years. The reserve’s activity, including 18 bitcoin transactions and a $3,000 seed donation, is publicly accessible online, with donation details provided via a QR code and bitcoin address. For more information, click here.
On April 24, the Prince George County, Maryland’s Police Department announced the arrest of two individuals, Parmveer Parmveer and Gyoung Lee, in separate scam cases involving fake tech support schemes. Parmveer, from Grove City, OH, was charged with orchestrating a scam that began with a pop-up alert on victims’ computers, leading them to contact supposed Apple security agents and a fake FTC representative. Victims were manipulated into withdrawing large sums of cash and purchasing gold, resulting in losses totaling nearly $700,000. In an unrelated case, Gyoung Lee from Flushing, NY, was arrested for a similar scam involving a fake Microsoft tech support alert, convincing a victim to withdraw $40,000. For more information, click here.