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To keep you informed of recent activities, below are several of the most significant federal events that have influenced the Consumer Financial Services industry over the past week.
Federal Activities:
On July 17, the House Financial Services Subcommittee on Digital Assets, Financial Technology, and Artificial Intelligence, led by Subcommittee Chairman Bryan Steil, held a field hearing at Federal Hall National Memorial in New York City to mark the one-year anniversary of the House’s bipartisan passage of H.R. 3633, the Digital Asset Market Clarity (CLARITY) Act, examining the legislation’s role in promoting innovation, protecting consumers, and positioning the U.S. as the global center of the digital asset ecosystem. Full Committee Chairman French Hill underscored that the CLARITY Act and the GENIUS Act, both passed one year prior, are essential to establishing the clear, predictable rules needed to transition traditional finance to a distributed ledger blockchain basis, while Steil framed the hearing as the culmination of nearly a decade of bipartisan work to replace regulation by enforcement with a durable market structure framework. Several members expressed urgency about the Senate’s failure to act, with Representative Marlin Stutzman noting that despite the CLARITY Act having cleared the Senate Banking Committee two months earlier it remains stalled on the Senate calendar, and multiple witnesses and members warned that continued delay drives innovation, capital, and jobs to competing jurisdictions, including the EU, UK, Hong Kong, Singapore, and the UAE. Witnesses testified that the CLARITY Act’s central contribution is resolving the fundamental jurisdictional ambiguity between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), distinguishing digital assets that function as securities from digital commodities that power operational networks, establishing SEC oversight for capital formation involving digital commodities, and granting the CFTC clear authority over centralized secondary market intermediaries — while also ensuring that software developers, infrastructure providers, and protocol maintainers who do not take custody of customer assets are not swept into registration requirements designed for traditional financial intermediaries. For more information, click here.
On July 17, the Federal Deposit Insurance Corporation (FDIC) issued Financial Institution Letter FIL-38-2026, providing notice of proposed reporting forms and instructions for FDIC-supervised permitted payment stablecoin issuers (PPSIs) in connection with the agency’s April 10, 2026, proposed rule implementing requirements under the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act. The proposed information collection would require FDIC-supervised PPSIs — defined as subsidiaries of FDIC-supervised financial institutions approved by the FDIC to issue payment stablecoins under the GENIUS Act — to complete both a weekly confidential reporting form and a quarterly reporting form, with an additional streamlined “short-form” weekly report available to eligible PPSIs. The FDIC is soliciting public comment on the proposed forms and related instructions, with comments due 60 days after publication in the Federal Register, and the Financial Institution Letter (FIL) applies to all FDIC-supervised financial institutions that operate or may operate as PPSIs. For more information, click here.
On July 16, the Federal Reserve Board of Governors, the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) issued a joint statement outlining enhanced security procedures for the handling of highly sensitive information during bank examinations, reflecting a coordinated effort among the three principal federal bank regulators to reduce cybersecurity risks while preserving full examiner access to bank records throughout the examination process. The statement describes a unified approach to identifying highly sensitive data and documents, with enhanced procedures that may include reviewing materials on-site rather than transferring them onto agency systems, thereby limiting exposure to cybersecurity vulnerabilities. Notably, the agencies committed to notify affected banks of any potential or confirmed material data breach involving confidential supervisory information as soon as practicable and no later than 72 hours after discovery — unless legal restrictions apply — signaling a meaningful new disclosure obligation with direct implications for how banks and their regulators manage examination-related data security incidents and reinforcing the agencies’ shared commitment to maintaining a safe, flexible, and stable monetary and financial system. For more information, click here.
On July 16, the SEC proposed Regulation E-Delivery, a sweeping new rule that would make electronic delivery the default method by which issuers, broker-dealers, investment advisers, and others satisfy information delivery requirements under federal securities laws, replacing the SEC’s decades-old guidance-based approach that required affirmative recipient consent before electronic delivery could be used. Under the proposal, a broad range of required regulatory documents — including fund prospectuses, annual and semiannual shareholder reports, proxy statements, trade confirmations, Form CRS disclosures, and Form ADV Part 2 brochures — could be delivered electronically without first obtaining affirmative consent, while preserving recipients’ ability to opt out and continue receiving paper delivery upon request. Investors currently receiving paper delivery would receive two paper notices informing them of the upcoming transition and their opt-out rights before being moved to e-delivery. SEC Chairman Paul S. Atkins framed the proposal as a key pillar of his modernization agenda, stating that “in an age of artificial intelligence and blockchain technology, a default to paper delivery should be a relic, not a standard,” and emphasizing that e-delivery offers investors more personalized, interactive, timely, and accessible disclosure experiences while generating savings in paper, printing, and postage costs for issuers, market intermediaries, and ultimately investors. The public comment period will remain open for 60 days following publication in the Federal Register. For more information, click here.
On July 16, Treasury Secretary Scott Bessent delivered remarks before an international ministerial convened by Secretary of State Marco Rubio on the resurgence of political terrorism, outlining the Treasury Department’s commitment to deploying its full suite of financial counterterrorism authorities against what he described as a transnational, far-left threat that increasingly exploits nonprofit and charitable structures to conceal the movement of illicit funds. Bessent framed the effort as a natural evolution of Treasury’s post-9/11 mission, noting that the Office of Terrorism and Financial Intelligence (TFI) — established after September 11 as the first finance ministry office in the world dedicated to disrupting terrorist funding networks — is now being directed toward organized domestic political terrorism alongside its longstanding focus on foreign threats. He highlighted the use of the Office of Foreign Assets Control (OFAC), the Financial Crimes Enforcement Network (FinCEN), and Internal Revenue Service Criminal Investigation (IRS-CI) as key tools in this effort, pointing to the administration’s prior designation of four far-left Antifa extremist groups abroad as foreign terrorist organizations and OFAC’s sanctioning of seventeen sham charities and nonprofits found to be funding Hamas. Bessent emphasized that Treasury is actively examining where tax-exempt status has been exploited, which charitable entities have served as financial conduits for foreign-influence activity, and how officers and directors of such organizations may be held personally accountable, while stressing that Treasury’s actions will be grounded in suspected unlawful conduct rather than ideology, in order to respect constitutional protections for speech, association, and assembly. Calling for unified international cooperation as disciplined as the networks being targeted, Bessent closed by affirming Treasury’s commitment to identifying illicit funding, dismantling the financial infrastructure sustaining political terrorism, and ensuring that the global financial system does not become a sanctuary for those who seek to subvert it. For more information, click here.
On July 15, the U.S. House of Representatives passed H.R. 6556, the Failing Bank Acquisition Fairness Act, which amends the Federal Deposit Insurance Act and the Bank Holding Company Act of 1956 to significantly restrict the circumstances under which federal banking regulators may invoke concentration limit exceptions in connection with mergers or acquisitions involving failed or failing banks. Under current law, regulators can waive deposit and consolidated liability concentration limits to facilitate the acquisition of a bank in default or in danger of default. The bill narrows that authority by requiring the responsible agency to determine, based on clear and convincing evidence, that consummation of the proposed transaction is necessary to prevent significant economic disruption or significant adverse effects on financial stability, and further conditioning any waiver on the FDIC not having received a “qualified bid” — defined as a bid from a well-capitalized and well-managed institution whose resulting entity would also be well-capitalized — from an acquirer that would not itself require a concentration limit exception. The bill also adds a congressional notification requirement obligating the waiving agency and the FDIC to jointly submit a written report to the House Financial Services Committee and the Senate Banking Committee within 30 days of any waiver, detailing the justification, alternative bids considered, reasons nonwaiver bids were not selected, and recommendations for improving competition in future bank resolutions, with the report to be made publicly available subject to redactions for confidential supervisory information. Finally, the bill prohibits the FDIC from considering in its least-cost determination any bid that would, if accepted, result in a violation of the concentration limits established under the Federal Deposit Insurance Act or the Bank Holding Company Act, thereby closing a potential loophole through which bad faith bids inflating the apparent cost of a nonwaiver resolution could be used to justify granting a concentration limit exception. For more information, click here.
On July 15, the U.S. House Financial Services Committee convened a hearing with Consumer Financial Protection Bureau (CFPB) Acting Director Russell Vought to examine the CFPB’s Semi-Annual Report, ongoing reforms, and legislative proposals aimed at ensuring the CFPB remains transparent, accountable, and focused on consumer protection. Vought’s central reform recommendation was placing the CFPB under the congressional appropriations process, which he described as “the most important reform that you can do, full stop,” arguing that the CFPB’s current funding structure, which bypasses annual congressional appropriations, removes a critical accountability mechanism that applies to virtually every other federal agency. Chairman French Hill framed the hearing around concerns that CFPB policies under the prior administration had actually harmed consumers, citing a Council of Economic Advisers estimate that CFPB policies have cost consumers between $237 and $369 billion since 2011 through higher borrowing costs, reduced credit availability, and compliance-related expenses passed through the financial system. Several members echoed the view that the CFPB had strayed from its statutory mission, with Representative Barry Loudermilk characterizing the agency as a “name and shame organization” that pursued its own policy agenda rather than faithfully executing congressionally enacted law, and Representative John Rose calling for a risk-based supervisory framework that would direct examination resources toward firms with repeated compliance failures rather than applying uniform supervisory intensity across all institutions. Vought described the current administration’s approach as a “paradigm shift,” highlighting the introduction of a “Humility Pledge” examiners must read at the outset of all examinations, new enforcement principles focused on actual consumer harm and due process, and an effort to eliminate duplicative supervision by coordinating with other regulators. The following day, the Senate Committee on Banking, Housing, and Urban Affairs held its own open session hearing titled “The CFPB Semi-Annual Report: A New Day at the CFPB Through Reform,” also featuring Vought as the sole witness. Ahead of that hearing, Senate Banking Committee Minority Staff released a report finding that the Trump administration’s actions to sideline the CFPB have cost American consumers up to $26.5 billion, including up to $5 billion from rescinding the Credit Card Late Fee Rule and up to $2.5 billion from rescinding the Overdraft Fee Rule in 2026 alone, while Ranking Member Senator Elizabeth Warren sent Vought a letter demanding responses to unanswered congressional oversight inquiries, and Senator Warren and Senator Jack Reed sent a separate letter detailing harms to service members from the CFPB’s plan to force relocation of staff from regional offices. For more information, click here, here, and here.
On July 15, the SEC adopted a final rule modernizing its delegations of authority to SEC staff, effective July 26, 2026, amending provisions across 17 C.F.R. Parts 200, 201, and 203 to better reflect how the SEC conducts its business and to promote more efficient use of agency resources. The most significant structural change consolidates a range of administrative registration functions, previously delegated to the director of the Division of Examinations, under the director of the EDGAR Business Office, including authority to grant or cancel registrations of brokers, dealers, investment advisers, municipal advisors, municipal securities dealers, government securities brokers and dealers, transfer agents, and securities-based swap dealers and major securities-based swap participants, on the basis that these functions are more logically aligned with the EDGAR Business Office’s existing filer support responsibilities. The rule also extends to the director of the Office of Municipal Securities the authority to cancel the registration of municipal securities dealers, a gap in that director’s existing authority that created inconsistency relative to other delegations in the municipal securities area, and makes technical corrections to Rules 430 and 431 of the SEC’s Rules of Practice to clarify that those procedural rules governing Commission review of delegated actions apply to actions taken by the director of the EDGAR Business Office. Additionally, the rule updates Rule 2 of the Rules Related to Investigations to reflect current division names and a recent internal reorganization affecting which senior officials may share nonpublic investigative or examination information with other regulators. Because the amendments relate solely to internal agency organization, procedure, and practice and do not substantially affect the rights or obligations of nonagency parties, the SEC determined that notice-and-comment rulemaking under the Administrative Procedure Act was not required. For more information, click here.
On July 14, the federal banking regulators issued new interagency guidance directing supervised financial institutions to take a closer look at credit risk when lending to individuals who are not legally authorized to work in the U.S. The guidance, issued jointly by the OCC, FDIC, and National Credit Union Administration (NCUA), follows a May 2026 executive order aimed at addressing perceived risks to the financial system arising from the extension of credit to the nonwork authorized population. Key facts in the interagency guidance, include warnings that lending to nonwork authorized borrowers may present heightened credit risk because income stability, continued employment, and financial sustainability are subject to greater uncertainty due to immigration enforcement activity. Further, recommendations that institutions consider requiring and reviewing paystubs, W-2s, tax returns, employer verifications, bank statements, or evidence of continuing work authorization. Loans showing signs of credit weakness, regardless of delinquency status, should be considered for classification and allowance for credit losses purposes. The guidance goes beyond factors applicable to individual applicants and states that institutions with significant exposure to borrowers concentrated in specific geographic markets, employers, or industries disproportionately affected by immigration enforcement may face elevated concentration risk, with changes potentially affecting the repayment capacity of multiple borrowers simultaneously. This guidance does not create new law or impose new legal requirements. Instead, it is a reminder of existing obligations, filtered through the lens of the current immigration enforcement environment. But the coordination across agencies and the specificity of the risk warnings raise the possibility that examiners will be paying close attention to how institutions manage this risk going forward and may make specific inquiries about this subject. For more information, click here.
On July 14, the U.S. Court of Appeals for the Seventh Circuit issued its decision in Steidinger v. Blackstone Medical Services, affirming dismissal of a class action Telephone Consumer Protection Act (TCPA) claim and holding that the private right of action under § 227(c)(5) does not extend to text messages — a ruling that creates a significant circuit split with the Ninth Circuit’s contrary holding in Howard v. Republican National Committee. The Steidinger plaintiffs alleged that Blackstone Medical Services continued sending promotional texts about home sleep tests after recipients opted out via “STOP” replies or registration on the National Do-Not-Call Registry, but a unanimous Seventh Circuit panel applied rigorous textualist analysis to conclude that the term “telephone call” in § 227(c)(5) — anchored to its 1991 ordinary public meaning as sound-based communication — cannot be stretched to cover text messages. The court reinforced its reading through statutory structure, observing that while § 227(c)(5) covers only “telephone calls,” adjacent provisions use the broader term “telephone solicitation,” which § 227(a)(4) expressly defines to include both calls and messages, invoking the meaningful-variation canon to find that Congress intended the private right of action to be narrower. The panel also declined to defer to the Federal Communications Commission’s (FCC) contrary interpretation, found Congress’s repeated targeted amendments to the TCPA — including a 2018 amendment expressly adding texts to § 227(e) — undercut any inference of ratification of the FCC’s reading, and specifically distinguished prior circuit authority on the ground that those cases arose under § 227(b), not § 227(c)(5). For businesses operating in the Seventh Circuit (Illinois, Indiana, and Wisconsin), the decision substantially reduces class action exposure for text message marketing campaigns under § 227(c)(5), though state law claims remain viable, and the circuit split makes Supreme Court review a realistic prospect that could ultimately establish a uniform national rule extending liability to texts. For more information, click here.
On July 14, the White House announced the launch of “GOLD EAGLE,” a cybersecurity vulnerability coordination clearinghouse established pursuant to President Trump’s June 2, 2026, Executive Order 14409, “Promoting Advanced Artificial Intelligence Innovation and Security,” designed to enable unprecedented speed and scale in detecting and patching cyber vulnerabilities across critical infrastructure sectors through a coordinated partnership between the federal government and the private sector. The initiative brings together the White House, the Department of the Treasury, the Department of Homeland Security through the Cybersecurity and Infrastructure Security Agency (CISA), and the Department of Defense/War, working alongside open-source software partners and American critical infrastructure companies to reduce duplicative scanning efforts, leverage frontier AI capabilities to stay ahead of adversaries, and deliver prioritized, actionable threat and remediation information to both federal and private sector defenders. Treasury Secretary Scott Bessent framed the initiative as central to safeguarding the integrity of the U.S. financial system, Secretary of Defense/War Pete Hegseth described it as bringing “a wartime footing to the cyber domain,” DHS Secretary Markwayne Mullin emphasized its role in expanding security measures across software and networks, and National Cyber Director Sean Cairncross highlighted its role in cementing American AI dominance by protecting critical systems while enabling continued private sector innovation. GOLD EAGLE has already begun intaking and prioritizing cybersecurity vulnerabilities from across industries, coordinating scanning verifications, and operationalizing the Trump administration’s broader strategy of harnessing AI to defend American critical infrastructure and accelerate secure innovation. For more information, click here.
On July 14, Federal Reserve Vice Chair for Supervision Michelle W. Bowman delivered pre-recorded remarks at the Federal Reserve Board’s third annual Financial Inclusion Conference, emphasizing that responsible innovation and financial inclusion are deeply interconnected. Bowman highlighted banks as central to financial inclusion efforts, noting that thoughtful innovation can lower costs, expand product availability, and bring affordable financial services to more Americans, including underserved consumers and businesses. She addressed the Federal Reserve’s role as one of setting clear regulatory expectations and providing transparency, not micromanaging bank business decisions, so that institutions of all sizes can innovate within appropriate guardrails. A significant portion of her remarks focused on artificial intelligence, which she described as a promising tool for expanding credit access to un- and underbanked consumers, while acknowledging the legal compliance challenges AI presents in credit decision contexts. Bowman noted her work chairing the Financial Stability Board’s Standing Committee on Supervisory and Regulatory Cooperation, under which the FSB recently published a report titled “Sound Practices for Responsible Adoption of Artificial Intelligence,” open for public comment through July 22, 2026, that offers flexible, practical guidance rather than prescriptive requirements. She closed by reaffirming that unnecessary regulatory complexity risks stifling the very innovation needed to advance financial inclusion. For more information, click here.
State Activities:
On July 8, the New York City Department of Consumer and Worker Protection (DCWP) published a proposed “junk fee” rule that would impose sweeping all-in pricing requirements on businesses offering, displaying, or advertising goods or services in New York City or to New York City consumers, marking a significant municipal step into consumer protection enforcement as federal agencies have scaled back activity in this space. The proposed rule, issued pursuant to Mayor Zohran Mamdani’s Executive Order 9 (signed January 5, 2026), would require businesses to clearly and conspicuously disclose the total price of any good or service, inclusive of all mandatory fees and charges, at least as prominently as any other pricing information, and to separately disclose the nature, purpose, and amount of any excluded fees before the consumer consents to pay. The rule defines “mandatory fees and charges” broadly to capture any fees not reasonably avoidable by the consumer or that a reasonable person would expect to be included in the purchase price, and it classifies misrepresentation of any fee’s nature, purpose, amount, or refundability as a deceptive and unconscionable trade practice. Businesses charging “service” or “processing” fees would be required to document what those fees actually cover, with failure to maintain or produce such records creating a presumption in DCWP enforcement proceedings that the fee was charged improperly — a significant evidentiary burden with direct compliance and litigation implications. Penalties would start at $525 for a first violation, $1,050 for a second, and $3,500 for third and subsequent violations, and while the rule is industry-neutral, DCWP has acknowledged potential federal preemption issues under the Truth in Lending Act, Truth in Savings Act, Real Estate Settlement Practices Act, and the Electronic Fund Transfer Act, and has invited public comment, with a deadline and public hearing both set for August 7, 2026. For more information, click here.