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 November 7, the Federal Deposit Insurance Corporation (FDIC) revised its Consumer Compliance Examination Manual to adopt a less frequent examination schedule for most FDIC‑supervised institutions, updating Section II‑12.1 to set examination cycles of 66 to 78 months, 54 to 66 months, or 24to 36 months based on asset size and measured from the date of the last joint Consumer Compliance exam/CRA evaluation. The update also introduces a compliance midpoint risk analysis for institutions on the 66- to 78-month or 54- to 66-month cycles that have no targeted consumer compliance exam or CRA evaluation, allowing examiners to determine if an intervening supervisory activity (such as a targeted visitation) is warranted, while adversely rated institutions will face more frequent supervisory activities. For more information, click here.
On November 7, Federal Reserve Vice Chair Philip N. Jefferson delivered remarks on “AI and the Economy” at Euro20+ hosted by the Deutsche Bundesbank, highlighting AI’s rapid adoption by consumers and businesses, its promise as a general-purpose technology to boost productivity, and its uncertain, uneven effects on employment and inflation. Citing evidence of sizable productivity gains — especially for less-experienced workers — and breakthroughs in fields like protein folding, he noted that AI could both displace certain jobs and create new ones, with impacts varying across sectors and regions. On prices, he emphasized offsetting forces: efficiency-driven cost declines versus upward pressures from scarce complements such as skilled labor, data centers, land, and energy. Given these crosscurrents and the difficulty of distinguishing cyclical from structural shifts, he urged humility and flexibility in policymaking. Turning to the outlook, he said U.S. growth remains moderate, the labor market is gradually cooling, headline inflation has shown limited progress amid tariff effects while underlying inflation appears to be moving toward 2%, and long-term expectations remain anchored. He supported last week’s 25-basis-point rate cut as moving policy closer to neutral and reaffirmed a meeting-by-meeting approach amid limited official data during the government shutdown, underscoring the Fed’s commitment to returning inflation to 2%. For more information, click here.
On November 7, Federal Reserve Governor Stephen Miran, speaking at the BCVC Summit in New York City, argued that dollar‑denominated stablecoins — now legitimized by the GENIUS Act’s one‑to‑one safe‑reserve requirements — are poised to become a multitrillion‑dollar force in global finance, channeling an estimated $1to $3 trillion into Treasury bills and other liquid dollar assets by decade’s end, lowering U.S. borrowing costs and exerting sustained downward pressure on the neutral interest rate (r-star). He emphasized that demand will largely come from abroad as stablecoins perforate capital controls and broaden access to dollars, with limited risk of U.S. bank disintermediation given their lack of yield and deposit insurance. Comparing a prospective “global stablecoin glut” to a smaller echo of the early‑2000s global saving glut, he highlighted potential macro effects — a stronger dollar, greater odds of hitting the zero lower bound, reduced exchange‑rate shock absorption, and more synchronized global cycles — and urged policymakers to incorporate these dynamics into a forward‑looking monetary policy framework as stablecoins become core payments infrastructure. For more information, click here.
On November 6, Senator Elizabeth Warren (D-MA) sent a letter to Federal Reserve Chair Jerome Powell seeking detailed information by November 20 about the Fed’s workforce and supervision capacity in light of reports that Vice Chair for Supervision Michelle Bowman plans to cut roughly 30% of staff in the Division of Supervision and Regulation (from about 500 to 350) and “restructure” the division, amid the Fed’s separate 10% systemwide staff reduction and broader deregulatory moves (including lower capital requirements, weakened stress tests, and looser safeguards) that she warns raise risks of bank failures and taxpayer bailouts. Warren requested organizational charts and headcounts for the Board of Governors and each of the 12 Reserve Banks as of January 20 and October 29; S&R-specific staffing figures; copies of communications and decision-making documents about the cuts; the implementation timeline, updated organization charts, and an impact assessment on supervisory and regulatory capabilities; and an update on the Fed’s 10% workforce reduction plan. For more information, click here.
On November 6, Federal Reserve Governor Christopher Waller, speaking on a Bank of Canada panel in Ottawa, clarified that proposed “skinny” master accounts would be available only to eligible depository institutions — i.e., entities with a bank charter —tempering interpretations that nonbank fintechs could apply and leaving open questions about access for state-chartered SPDIs such as Custodia. While reiterating his call to “embrace the disruption,” he outlined a tiered framework in which the full master account is the “gold medal” for top‑tier banks and lower‑tier, chartered institutions could receive limited, payments‑only functionality, implying firms like Ripple would need a charter first and signaling that any near‑term innovation would occur within the banking perimeter rather than around it. For more information, click here.
On November 5, the Federal Reserve Board announced that it had finalized revisions to its Large Financial Institution (LFI) rating system and the Insurance Supervisory Framework that change when a firm is considered “well managed” and recalibrated the enforcement stance tied to weaker component ratings. Under the new approach, a firm with at least two component ratings of Broadly Meets Expectations or Conditionally Meets Expectations and no more than one Deficient-1 will be deemed “well managed.” The board also replaces the automatic presumption of an enforcement action for one or more Deficient-1 ratings with a case-by-case determination, while retaining a presumption of formal action for any Deficient-2. The Insurance Supervisory Framework was updated to remove a reference to reputational risk. The changes become effective 60 days after publication in the Federal Register. Governor Michael Barr dissented, warning the rule lowers safeguards and conflicts with statutory “well managed” requirements. For more information, click here.
On November 4, at The Clearing House Annual Conference, Comptroller of the Currency Jonathan Gould outlined an agency-wide strategy to defend and promote federal preemption across the banking system. He emphasized pairing court advocacy with public- and policymaker-facing engagement to rebuild political support that he said has eroded over the past 15 years. Federal preemption is the legal doctrine under which federal laws displace or override state laws. Most notably, the National Bank Act preempts many state laws for national banks. Gould stressed that preemption benefits are not limited to national banks. They also extend to state-chartered banks and other federally regulated institutions through interest-rate exportation and parity laws, such as the Federal Deposit Insurance Act. He previewed several prongs of the Office of the Comptroller of the Currency’s (OCC) approach: continuing to file amicus briefs in key cases, consulting with Treasury, exploring updated preemption regulations for the first time since post-crisis reforms, and stepping up outreach to Congress and state regulators. He urged other agencies and banks of all sizes to speak up in support of preemption, noting that durable legal parameters flow from sustained political legitimacy. For more information, click here.
On November 4, PYMNTS reported that 333 public comments on Treasury’s proposed GENIUS Act framework spotlight unresolved anti-money laundering (AML) and compliance questions for stablecoins, with state regulators, banks, and payments firms urging clarity and balance. The Conference of State Bank Supervisors pressed Treasury to respect state oversight, calibrate authorizations to issuer risk profiles, define “digital asset service providers” precisely, and close potential loopholes by treating affiliate- or partner-paid “yield” as violative of the act’s ban, while First State Bank and Trust called for robust, exam-based validation of issuers’ reserves, custody, and liquidity by federal and state regulators and for protections to extend to affiliates. Cross-border firm Weld emphasized that automation cannot replace human judgment, asked Treasury to set standards for when AI-driven monitoring satisfies due diligence and when manual review is required, and advocated tiered AML obligations to avoid imposing bank-grade requirements on micro-remittance platforms. Across filings, commenters support a regulatory floor for AML and sanctions while warning that over-centralization could stifle innovation and seeking uniform rules aligned with the Bank Secrecy Act. For more information, click here.
On November 4, Politico reported that Senate Agriculture Chair John Boozman (R-Ark.) and Sen. Cory Booker (D-N.J.) planned a Wednesday call with White House crypto and AI czar David Sacks as the committee nears a discussion draft of its portion of a cryptocurrency market structure bill. Booker is expected to press Sacks on whether the Trump administration will appoint Democratic commissioners to the Commodity Futures Trading Commission and to raise concerns about the Trump family’s digital-asset business entanglements — issues that underscore Democrats’ ethics and governance worries as bipartisan negotiators work to finalize the draft. For more information, click here.
On October 31, the Federal Reserve Board’s Office of Inspector General issued Executive Summary 2025-IT-C-012 of its annual Federal Information Security Modernization Act audit, finding the Consumer Financial Protection Bureau’s (CFPB) information security program declined from level 4 (managed and measurable) to level 2 and is no longer effective, citing lapses in maintaining authorizations to operate, use of risk acceptances without documented cybersecurity analysis, staffing and contractor losses that impaired continuous monitoring and testing, and persistent use of outdated software due to delays in modernizing legacy applications. While noting some progress — including formalized ransomware response processes, a transition to continuous employee vetting, weekly risk meetings with system owners, and ongoing decommissioning and modernization efforts — the audit found that those efforts did not mitigate the overall decline. The audit recommends six new actions focused on cybersecurity profiles, security authorizations, and continuous monitoring, with the CFPB concurring and outlining corrective steps. The audit closes three prior recommendations, and leaves eight earlier recommendations open in areas such as data loss prevention, data classification, flaw remediation, and system/software inventorying. For more information, click here.
On October 31, NMLS announced that the XML Upload Schema for Mortgage Call Report (MCR) Form Version 7 (MCR FV7) is now available on the NMLS Resource Center’s Reporting Files page under “Upcoming MCR Form Version 7 Information,” along with definitions and a sample MCR. While use of the XML schema is optional, mortgage companies can begin updating systems ahead of the April 1, 2026, effective date, with a test submission option to be offered in January 2026, and CSBS hosting office hours from November through April to address timelines, new and changed report elements, and support resources, with additional details to follow in early November. For more information, click here.
On October 30, the Federal Housing Finance Agency (FHFA) released its Annual Housing Report for January 1 to December 31, 2024, confirming that Freddie Mac met all single-family and multifamily housing goals while Fannie Mae met all goals except the single-family very low-income home purchase goal (5.9% versus a 7.0% benchmark and 6.0% market level) — a narrow miss FHFA deemed feasible but not requiring a formal Housing Plan, while expecting improvements under conservatorship. FHFA also found both Enterprises complied with their Duty to Serve obligations across manufactured housing, affordable housing preservation, and rural housing, rating Fannie Mae Minimally Passing (manufactured housing) and Low Satisfactory (preservation and rural) and Freddie Mac High Satisfactory (manufactured housing) and Low Satisfactory (preservation and rural). The report further outlines ongoing affordable housing allocations to the Housing Trust Fund and Capital Magnet Fund and provides enterprise and market data on mortgage activity — including subprime, nontraditional, and higher‑priced loans — drawing in part from the National Mortgage Database. For more information, click here.
State Activities:
On November 3, Massachusetts Attorney General (AG) Andrea Joy Campbell — co-leading with the AGs of New York, California, and Colorado and joined by 21 other AGs — filed suit against the U.S. Department of Education (ED) to block a newly finalized rule that would let ED deem certain state and local governments or nonprofits ineligible employers for Public Service Loan Forgiveness (PSLF) if the administration concludes they have a “substantial illegal purpose,” a standard the coalition says could sweep in activities such as supporting undocumented immigrants, providing gender-affirming care to transgender youth, advancing DEI initiatives, or engaging in political protests. The complaint alleges the rule unlawfully restricts PSLF beyond the statute, exceeds ED’s authority, is arbitrary and capricious, and targets disfavored policies while exempting federal agencies, warns of widespread harms to public workers and state staffing, and seeks declaratory and injunctive relief to vacate and enjoin the rule before its July 2026 effective date, with private plaintiffs and local governments also suing.For more information, click here.
On October 30, Pennsylvania AG Dave Sunday announced a court-approved settlement with American Mint, LLC, resolving allegations under the Pennsylvania Unfair Trade Practices and Consumer Protection Law that the collectibles company used deceptive “negative option” subscription practices that enrolled consumers without clear, conspicuous disclosures or express consent. Following an investigation spurred by more than 200 complaints, American Mint will pay $750,000 to impacted consumers and costs, end subscription plans, cease automatic enrollment, revise its advertising and business practices, and terminate all collection efforts — discharging outstanding debt and clearing accounts — for more than 180,000 consumers referred to debt collectors. For more information, click here.
On October 30, Directions Equity, LLC signed a consent order with the California Department of Financial Protection and Innovation (DFPI) resolving a 2023 examination that found the CRMLA-licensed lender/servicer overcharged borrowers per-diem interest by starting interest before escrow disbursement in certain loans and failed to maintain required records. Following a DFPI-directed self-audit of California originations (February 2020 through August 2023) that identified overcharges in 10 of 74 files, the company refunded affected borrowers the excess amounts plus 10% interest (totaling $1,554.93), agreed to immediately discontinue the cited practices, and to remediate recordkeeping. The order imposes a $100,000 administrative penalty payable in monthly installments from November 2025 through October 1, 2026 (with acceleration for noncompliance) and states the order is a matter of public record. For more information, click here.
On October 30, the California DFPI announced enforcement actions against multiple cash-to-crypto kiosk operators, most notably ordering Nevada-based LSGT Services, LLC (Coinhub) to pay $675,000 — including $105,000 in restitution — for violating the Digital Financial Assets Law (DFAL) by charging fees and markups above statutory caps, accepting cash transactions over the $1,000 daily limit, and failing to provide required disclosures and receipt information, with many affected customers over 60. Marking DFPI’s fourth such action in recent months, the department also issued desist-and-refrain orders since June against Coin Time LLC and Anh Management, LLC (Hermes Bitcoin) for conducting thousands of transactions without sufficient customer identification (requiring compliance, restitution, and imposing penalties), and on June 25 fined Coinme $300,000 (including $51,700 restitution) with remedial commitments, leveraging expanded authority under DFAL and the California Consumer Financial Protection Law and echoing FinCEN’s call for kiosk operators to proactively guard against scams. For more information, click here.