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 31, the U.S. Court of Appeals for the Tenth Circuit affirmed judgment for the Federal Reserve Board of Governors and the Federal Reserve Bank of Kansas City (FRBKC), holding that Federal Reserve Banks have discretion under 12 U.S.C. § 342 to deny master account requests even from statutorily eligible institutions and rejecting Custodia Bank’s argument that the Monetary Control Act (MCA), 12 U.S.C. § 248a(c)(2), mandates universal access. The court explained that § 248a sets pricing principles for Board-established services rather than conferring account-access rights, that the 2022 Toomey Amendment’s requirement to report “approved” and “rejected” applications confirms ongoing discretion, and that reading the MCA to eliminate long-standing Reserve Bank discretion would “hide elephants in mouseholes,” so FRBKC’s denial — based on undue risk from Custodia’s crypto-focused model — was permissible and Custodia is not automatically entitled to a master account. For more information, click here.
On October 30, Vice Chair for Supervision Michelle W. Bowman delivered opening remarks at the Economic Growth and Regulatory Paperwork Reduction Act (EGRPRA) outreach meeting at the Federal Reserve Bank of Kansas City. She warned that bank regulation has become overly complex and overlapping, imposing unnecessary costs. She outlined a pragmatic approach that identifies problems, assesses consequences, and updates rules as conditions change. Bowman framed EGRPRA as a chance to eliminate outdated requirements and balance innovation with safety and soundness. She criticized prior EGRPRA reviews for failing to reduce burden and highlighted broad stakeholder comments from recent notices and meetings. Commenters urged updating Board regulations, tailoring thresholds, and reducing data collection burdens such as the Call Report. Bowman described initiatives on capital and supervision, including potential changes to the Community Bank Leverage Ratio, stress testing, and the enhanced supplementary leverage ratio, an FAQ on mutual capital instruments, streamlined mergers and de novo approvals, and a focus on material financial risks in ratings. She noted the FFIEC review of CAMELS and the end of reputational risk in supervision to support innovation and fair access. Bowman pledged continued outreach and a tailored, transparent framework that promotes safety, efficiency, and economic opportunity. For more information, click here.
On October 30, the Senate Committee on Banking, Housing, and Urban Affairs held an open, hybrid-format nomination hearing to consider Joseph Gormley to be president of the Government National Mortgage Association (Ginnie Mae), Francis Cassidy to be assistant secretary at the Department of Housing and Urban Development (HUD), Paul Hollis to be director of the Mint (Treasury), and The Honorable Travis Hill to be chairperson of the Board of Directors of the Federal Deposit Insurance Corporation. Hill was nominated by President Trump on September 30 but has been serving as acting chair since January 20. For more information, click here.
On October 29, the Consumer Financial Protection Bureau (CFPB) officially rescinded its rule requiring nonbank entities to register certain agency and court orders with the CFPB. The original rule, adopted in July 2024, mandated nonbank covered persons to disclose final public orders related to consumer financial products or services. The rule aimed to enhance transparency and monitor risks associated with corporate recidivism. However, current CFPB leadership found that the speculative benefits did not justify the significant costs and burdens on the entities involved. The rescission of this rule is expected to relieve nonbank entities from the administrative and financial burdens associated with compliance. It also aligns with the CFPB’s broader strategy to streamline regulatory requirements and focus on more effective tools for consumer protection. For more information, click here.
On October 29, the CFPB issued a final rule effective immediately rescinding most of its 2022–2023 amendments to the Rules of Practice for Adjudication Proceedings (12 CFR part 1081), restoring hearing officers/ALJs to decide dispositive motions and eliminating director-centric procedures such as bifurcation authority, expanded discovery depositions/subpoenas, and issue‑exhaustion requirements, as well as undoing various technical edits. Citing fairness and due‑process concerns with concentrating adjudicatory power in the director, alignment with Executive Branch norms, and stakeholder comments favoring rescission, the CFPB retained only narrow clarifications (simplified time‑computation with 10‑day periods converted to 14 days, electronic provision of documents, and certain nomenclature updates to avoid ambiguity), noted minimal expected impacts, and confirmed interagency consultation under CFPA § 1022(b)(2). For more information, click here.
On October 29, the CFPB proposed to withdraw its February 1, 2023, notice of proposed rulemaking (NPRM) that would have established a public registry in 12 CFR part 1092 for supervised nonbanks’ use of form-contract “covered terms and conditions” (including waivers of claims, liability limits, forum/venue limits, class-action waivers, gag clauses, and arbitration). The CFPB has concluded that the significant paperwork and operational burdens on thousands of firms — and on the CFPB to build and maintain a registration/publication system — are not justified by speculative, unquantified benefits, especially since most reported terms are lawful, publication could cause confusion and reputational harm, the CFPB lacks data on the prevalence of unlawful terms, resources have been reduced, and policy is focused on limiting regulatory burdens. Noting extensive opposition from industry, Tribes, GSEs and SBA (with support from consumer groups), the CFPB considered but rejected alternatives (e.g., limiting registration to unlawful terms or eliminating publication) and will take no further action on the NPRM, withdrawing it effective October 29, 2025. For more information, click here.
On October 29, the U.S. District Court for the Eastern District of Kentucky granted Forcht Bank, the Kentucky Bankers Association, and the Bank Policy Institute’s motion to temporarily lift the litigation stay and preliminarily enjoined the CFPB from enforcing its Personal Financial Data Rights Rule, staying the rule’s compliance deadlines under APA § 705 pending the Bureau’s ongoing reconsideration. The court found a strong likelihood of success on the merits, concluding that § 1033 of Dodd-Frank authorizes banks to make data available to consumers and fiduciary-like representatives — not commercial “authorized third parties”; that the CFPB failed to assess the cumulative data-security impacts of multiple provisions; that the rule’s ban on interface-access fees lacks clear statutory authorization and reasoned decision-making; and that fixed compliance deadlines are arbitrary given their dependence on yet-to-be-developed private “consensus standards.” The court held that the plaintiffs face irreparable harm from unrecoverable compliance costs, noted the equities and public-interest factors do not weigh against relief, and rejected overbreadth objections, explaining that § 705 permits postponing an agency action’s effective date to preserve the status quo. Accordingly, the CFPB is enjoined from enforcing the rule until it completes its reconsideration. For more information, click here.
On October 29, the Financial Accounting Standards Board voted 6-1 to add a project on stablecoin accounting to its technical agenda. The move followed Chair Richard Jones placing stablecoins on the research agenda after 2025 consultation feedback, including recommendations from Trump’s Working Group on Digital Asset Markets. Jones said there is uncertainty in GAAP and that standard setting is needed to bring clarity. The project will focus on whether stablecoins and similar digital assets qualify as cash equivalents. Board members favored providing examples under the current definition to show what would and would not qualify. Some members questioned pervasiveness outside crypto, with Frederick Cannon citing anticipatory pervasiveness and risks from private, unregulated money. FASB did not set a timeline, and a spokesperson said it is too soon to tell when the board will next address stablecoins. For more information, click here.
On October 29, the Federal Communications Commission (FCC) proposed requiring terminating providers to present verified caller name or other caller identity information when STIR/SHAKEN shows an A-level attestation. They seek comment on using Rich Call Data and other solutions, verification by originating providers, and secure transmission. They propose measures for foreign-originated calls, including labeling and prohibiting spoofing of U.S. numbers. They also consider eliminating outdated TCPA and Do-Not-Call rules and reviewing call blocking rules. Comments are due 30 days after Federal Register publication. For more information, click here.
On October 28, Senators Elizabeth Warren, Bernard Sanders, Ron Wyden, Richard J. Durbin, Jeff Merkley, Christopher S. Murphy, and Tina Smith wrote to Secretary of Labor Lori Chavez-DeRemer and U.S. Securities and Exchange Commission (SEC) Chair Paul Atkins expressing serious concerns that Trump’s executive action would steer defined-contribution plans into “alternative assets” such as private market funds and cryptocurrencies, which they argue are volatile, opaque, illiquid, burdened by high fees and conflicts of interest, and have underperformed public markets. They criticized the Department of Labor’s rescission of prior cautions on private equity and crypto, cited SEC risk alerts, GAO findings on extreme crypto volatility, and recent institutional warnings and divestments by leading endowments, and flagged potential conflicts tied to the Trump family’s crypto ventures. The senators requested answers by November 17 on how fiduciary duties will be maintained, whether agencies have studied private equity’s profit from retail access or potential Trump family gains, the risks to retail savers, whether forthcoming rules could weaken due diligence or accountability, what investor-protection and transparency measures will apply to private and digital assets, what long-term oversight will track retirement outcomes, and how fiduciaries should account for shifting digital-asset regulation. For more information, click here.
On October 28, FINRA outlined the next phase of its long-standing technology journey — expanding GenAI capabilities under FINRA Forward to enhance self-regulatory effectiveness — building on decades of innovation from NASD’s OTC clearing and Nasdaq automation to early cloud adoption. Leveraging experience from AI-driven cross-market surveillance on behalf of 26 SROs across 35 equities and options exchanges — reviewing hundreds of billions of daily events — FINRA is deploying LLM-enabled tools within a rigorous governance framework (AI Governance Committee, tight data access controls, security reviews) and broad staff enablement, with more than 900 employees completing GenAI training. New tools include FILLIP, an internal LLM assistant now used weekly by about 40% of staff to summarize, compare, and analyze materials in support of risk reviews and examinations; GenAI solutions to synthesize investor complaints and Regulatory Notice comments; and pilots for evaluating CRED disclosures and extracting insights from eFOCUS reports, alongside vendor GenAI for software, learning content, and support — together projecting thousands of hours in annual efficiency gains while keeping a human-in-the-loop. In parallel, FINRA is engaging member firms through ongoing risk monitoring, advisory committees, roundtables, conferences, and Regulatory Notice 24-09, sharing observed GenAI use cases, reinforcing technology‑neutral supervisory expectations, and warning about adversarial GenAI via Threat Intelligence Products and an upcoming webinar — sustaining a constructive feedback loop that advances investor protection and vibrant markets. For more information, click here.
On October 27, a group of Democratic members of the U.S. Senate Banking Committee led by Elizabeth Warren wrote to Acting CFPB Director Russell Vought expressing concern over his public statement that he intends to “close down” the Bureau within months, despite federal court orders enjoining efforts to dismantle the agency. They cited his failure to request funding for FY2025, directives halting supervision, investigations, stakeholder engagement, and enforcement, and attempted mass layoffs that courts blocked as likely to “decimate” the Bureau, all contradicting the administration’s assurances that there is no shutdown plan. The senators warned that these actions are unlawful and jeopardize consumers, noted the CFPB’s record of returning over $21 billion to families, and requested by October 31 detailed information on: the unobligated balance of the CFPB Fund and the Civil Penalty Fund and when funds would be exhausted without new transfers, and any prepared plans for reductions in force, contract terminations, enforcement reductions, or other wind-down steps, including relevant memoranda. For more information, click here.
On October 27, the Office of the Comptroller of the Currency (OCC) issued a notice of proposed rulemaking to rescind its recovery planning guidelines at 12 CFR 30, appendix E, which currently apply to insured national banks, insured federal savings associations, and insured federal branches with at least $100 billion in average total consolidated assets. The OCC stated that existing safety and soundness standards were sufficient to ensure adequate risk management for covered banks, and that it already expected institutions to maintain a formal contingency funding plan that accounted for various stress scenarios. The proposal would not affect OCC‑supervised institutions under $100 billion. Public comments are due 30 days after Federal Register publication. For more information, click here.
On October 24, the Federal Reserve Board requested public comment on proposals to enhance the transparency and accountability of its annual bank stress tests, including greater disclosure of supervisory stress test models, changes to the framework guiding hypothetical scenario design, and the proposed scenarios for the 2026 test. The Board also proposed an enhanced disclosure process for future cycles, timeline adjustments to allow a public comment period on scenarios, and reporting form updates to reduce burden and improve risk capture. Vice Chair for Supervision Michelle Bowman emphasized that clearer, more transparent rules and due process would strengthen the program and avoid litigation, and noted the Board’s estimate that the model and scenario changes would not materially alter aggregate capital requirements across stress conditions. Comments on the 2026 scenarios are due December 1, 2025, and comments on the model and scenario transparency proposals are due January 22, 2026. For more information, click here.
On October 23, FinCEN released a Financial Trend Analysis identifying roughly $9 billion in potential Iranian shadow banking activity flowing through U.S. correspondent accounts in 2024, drawing on U.S. financial institution reports and reinforcing the Trump administration’s maximum pressure campaign on Iran. The analysis details how Tehran leverages networks of Iran−based exchange houses and foreign front companies — especially in the UAE, Hong Kong, and Singapore — spanning oil, shell, shipping, investment, and technology procurement firms, and urges banks to heighten vigilance. Highlights include about $5 billion transacted via foreign shell companies, approximately $4 billion by Iran−linked oil companies (potentially tied to illicit oil sales), and roughly $413 million involving potential procurement of export-controlled technology. These claims are supported by case studies and infographics and supplement FinCEN’s June advisory on Iran’s illicit oil smuggling, shadow banking, and weapons procurement. For more information, click here.
On October 21, the U.S. Small Business Administration (SBA) released a state-level analysis showing that the federal shutdown has frozen its core 7(a) and 504 lending programs, which in FY2025 had guaranteed a record 84,400 loans totaling $45 billion. According to the release, the shutdown is preventing an estimated 320 small businesses per business day from accessing $170 million in SBA-backed loans — about $2.5 billion blocked for 4,800 businesses so far — despite the programs operating at zero taxpayer subsidy. SBA Administrator Kelly Loeffler blamed Senate Democrats for blocking a “clean” funding bill and warned that shuttered loan access would force small firms to cut hours and benefits, lay off workers, and potentially close. For more information, click here.
State Activities:
On November 1, Oklahoma’s new law (Title 6, §1520) takes effect requiring digital asset kiosk operators to be licensed as money transmitters under the Oklahoma Financial Transaction Reporting Act and to meet enhanced consumer-protection and reporting obligations. The new law includes advance notice to the Oklahoma State Banking Department for kiosk placement/relocation; quarterly kiosk location reporting to the Department and NMLS; clear disclosure of transaction terms; customer receipts; fraud-prevention controls and designated compliance officers; refunds to defrauded new and certain existing customers; caps on transaction amounts and fees; and live customer support during specified hours, with operators also required to maintain a $500,000 bond and pay a $50 fee per location. For more information, click here.
On October 30, California’s Department of Financial Protection and Innovation (DFPI) issued a third round of edits to regulations under the Debt Collection Licensing Act (DCLA) for public comment. The draft focuses on the scope of the DCLA and document retention requirements. It follows DFPI requests for comment in August 2021, an initial draft in July 2022, and a second draft in November 2023. Annual report regulations were approved on March 4, 2025, and became effective July 1, 2025. Proposed changes include definitions of law firm, employee, and engaging in the business of debt collection. They also add to the scope of licensing requirements and to document retention. Comments are due by December 12, 2025. For more information, click here.
On October 27, Delaware’s new law excluding medical debt from consumer reports took effect, with Governor Matt Meyer highlighting the measure’s aim to protect families from long-term financial harm. Senate Bill 156 was unanimously passed by the Senate preventing medical debt from appearing on consumer reports and is paired with a state partnership with the nonprofit Undue Medical Debt to leverage $500,000 in FY2026 funds to purchase and abolish up to $50 million in medical debt for an estimated 17,000+ Delaware residents, who will receive notification letters in the coming weeks. Eligibility for relief includes household income at or below 400% of the federal poverty level (about $100,000 for a family of three) or medical debt equal to at least 5% of annual income. For more information, click here.