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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 24, the U.S. House Committee on Financial Services released a discussion draft of legislation to reform the Consumer Financial Protection Bureau (CFPB) and is soliciting public feedback through August 21, 2026. The draft is organized across five titles addressing: governance reforms including congressional appropriations oversight and a dedicated Inspector General (Title I); clarification of UDAAP authority and added procedural safeguards for enforcement (Title II); support for innovation and small-dollar lending products (Title III); modifications to the CFPB’s supervisory thresholds and framework, including allowing certain institutions to elect prudential regulator supervision (Title IV); and reduced reliance on enforcement as a policymaking tool, along with improvements to civil money penalties and complaint procedures (Title V).For more information, click here.
On July 24, the EU and U.S. released a joint statement following the EU-U.S. Joint Financial Regulatory Forum, held June 9-10, 2026, in Brussels and co-chaired by the European Commission and the U.S. Department of the Treasury. The Forum brought together senior representatives from a broad range of EU and U.S. financial regulators to exchange views on nine topic areas: digital finance (including tokenization, artificial intelligence, digital assets, the EU’s MiCA regulation review, the digital euro, and U.S. progress on the GENIUS Act); financial stability and market developments; the U.S. G20 Finance Track; the EU Savings and Investments Union; bank regulation, capital requirements, and resolution, including Basel III implementation and a Securities and Exchange Commission (SEC) commitment to explore a registration exemption related to EU bail-in mechanisms; insurance regulation; capital markets, including retail access to private markets, corporate reporting, and climate disclosures; the Foreign Account Tax Compliance Act (FATCA); and anti-money laundering and countering the financing of terrorism (AML/CFT), including updates on the EU’s Anti-Money Laundering Authority and U.S. efforts to modernize the Bank Secrecy Act (BSA). Both sides reaffirmed the importance of continued regulatory dialogue and expect to hold the next Forum in late 2026. For more information, click here.
On July 24, the Financial Industry Regulatory Authority (FINRA) issued Regulatory Notice 26-15, requesting public comment through September 25, 2026, on modernizing its best execution guidance under FINRA Rule 5310 as part of its FINRA Forward rule modernization initiative. The request is prompted in part by the SEC’s proposal to rescind the trade-through rule under Rule 611 of Regulation NMS, and addresses nine topic areas: how best execution obligations should operate in a post-Rule 611 environment, including venue connection decisions and benchmarking without a protected NBBO; the role of access fees and transaction costs in order routing decisions; standards for regular and rigorous versus order-by-order execution quality reviews; best execution obligations for institutional orders, including block trades, algorithmic strategies, and request-for-quote platforms; the respective obligations of introducing and executing firms in the routing chain; best execution in extended trading hours as retail participation in overnight sessions grows; the treatment of held versus not held orders, including concerns about blanket “not held” designations for retail customers; additional guidance for listed options given their distinct market structure; and the application of best execution obligations in the context of emerging technologies, including artificial intelligence and tokenized securities. Comments may be submitted online, by email, or by mail to FINRA’s Office of the Corporate Secretary. For more information, click here.
On July 24, the Commodity Futures Trading Commission’s (CFTC) Division of Market Oversight (DMO) issued an advisory reminding designated contract markets (DCMs) of the proper procedures for self-certifying event contract series, specifically cautioning against the submission of broad, template-style certifications that bundle multiple potential event contract variations into a single filing. The CFTC noted that this practice undermines the DMO’s ability to evaluate whether a DCM has provided the required information, explanation, and analysis under Commission Regulation § 40.2, and whether it has adequately assessed settlement methodology, data sources, and core-principles compliance for each contract it intends to list. The advisory clarifies when closely related event contracts may be certified as a class or submitted for approval under Commission Regulations §§ 40.2(d) or 40.3. For more information, click here.
On July 23, U.S. Senate Banking Committee Ranking Member Senator Elizabeth Warren (D-MA) pressed Trump’s CFPB director nominee Brian Johnson on whether he would commit to notifying Congress and the inspector general if the White House contacted the CFPB regarding enforcement actions involving Trump family companies or political donors. Johnson declined to make that commitment, prompting Warren to assert that the CFPB is being used as “an arm of President Trump’s ongoing corruption.” Warren highlighted that the CFPB has dropped 42 enforcement actions and investigations since Trump took office. A report released by the Senate Banking Committee Minority Staff estimates these dropped actions have already cost American families more than $26 billion. Warren also raised concerns about Johnson’s conflict of interest given his current employer. For more information, click here.
On July 23, the CFTC announced a 30-day extension of the public comment period, now due August 26, 2026, on a proposed rule addressing two related developments in energy derivatives markets: the extension of standard futures contracts to 24/7 trading and the potential listing of perpetual contracts referencing physically delivered or storable energy commodities. The extension was granted in response to commenter requests and the addition of new questions posed by the CFTC following extensive industry conversations. Comments may be submitted electronically through Regulations.gov. For more information, click here.
On July 23, the SEC announced that it will host a public roundtable on September 17, 2026, at its Washington, D.C., headquarters to discuss the move toward 24-hour trading in U.S. equity markets, covering preparations to support overnight trading, operational and resiliency considerations, and the opportunities and challenges associated with market expansion. SEC Chairman Paul S. Atkins expressed enthusiasm for aligning U.S. equity markets with continuously trading global markets while emphasizing the importance of maintaining investor and customer protections. The roundtable will be open to the public, streamed live on SEC.gov, and members of the public may submit written comments referencing File Number 4-913 either electronically to rule-comments@sec.gov or by mail to the SEC’s Office of the Secretary. For more information, click here.
On July 23, Congressman Bryan Steil (R-WI) announced that the U.S. House of Representatives passed H.R. 7008, the Stop Insider Trading Act, by a bipartisan vote of 232-198. Originally introduced by Chairman Steil in January 2026, the bill prohibits Members of Congress, their spouses, and dependent children from purchasing publicly traded stocks, requires members to file a public notice with the clerk of the House or secretary of the Senate at least seven but no more than 14 days in advance of any intended stock sale, and imposes strict penalties for violations — including a fine equal to $2,000 or 10% of the value of the covered investment, whichever is greater, plus forfeiture of any realized profit. Steil urged the Senate to quickly take up the bill and send it to President Trump for signature. For more information, click here.
On July 22, SEC Commissioner Hester M. Peirce issued a public statement cautioning participants in the cryptocurrency market that moving financial activities onto blockchain infrastructure does not remove those activities from the scope of the federal securities laws, with a particular focus on two rapidly growing crypto products: vaults and on-chain lending strategies. Peirce described crypto vaults as tools that use smart contracts to allocate user assets to yield-generating activities such as staking and lending, ranging from fully programmatic allocations to those managed at the discretion of individuals or groups, and noted that parties involved in managing vaults — including selecting yield-generating activities, reallocating assets, or choosing decision-makers — should analyze whether their activities implicate the federal securities laws, including the Investment Company Act and the Investment Advisers Act. Similarly, she noted that on-chain lending strategies, which allow participants to deposit assets into systems that lend them to borrowers for a fee, may also carry significant securities law implications, including the possibility that on-chain loans could constitute notes that are securities depending on the parties’ motivations and plan of distribution. Peirce encouraged market participants involved in designing or operating vaults or on-chain lending strategies to engage proactively with the SEC’s Crypto Task Force to find compliant paths forward, and invited feedback on whether existing rules need to be modernized to accommodate these innovations while continuing to protect investors and maintain fair, orderly, and efficient markets. For more information, click here.
On July 21, the Federal Trade Commission (FTC) announced a proposed settlement order permanently banning Dennise Merdjanian — a key operator of a Nevada-based student loan debt relief scheme — from the debt relief industry and from telemarketing. The order resolves the FTC’s charges that Merdjanian and her co-defendants took more than $45.9 million from consumers by impersonating the U.S. Department of Education and making false promises of student loan forgiveness. In November 2024, the FTC sued Nevada-based Superior Servicing LLC and Merdjanian, alleging they impersonated the Department of Education to bilk millions from student loan borrowers. A federal court immediately halted the scheme and froze its assets. An amended complaint later added corporate defendants and two additional individual operators, Eric Caldwell and David Hernandez, both of whom were banned from the debt relief industry in September 2025. The proposed order against Merdjanian, along with a default order against the remaining corporate defendants, fully resolves the litigation. A monetary judgment of $45,959,012.69 was entered against her, jointly and severally with the other defendants. The judgment is partially suspended based on her inability to pay, with $184,731.71 due immediately from funds held in escrow, plus surrender of several corporate bank accounts and a 2022 Tesla Model Y to the court-appointed receiver. If Merdjanian is found to have materially misrepresented her finances, the full judgment becomes immediately due. For more information, click here.
On July 21, the SEC Division of Corporation Finance published new guidance in its Securities Act Rules Compliance and Disclosure Interpretations (Question 260.40), confirming that digital attestations provided programmatically through a tokenized security’s token standard protocol constitute a satisfactory method for investors to provide representations regarding their accredited investor status and minimum investment financing for purposes of a Rule 506(c) offering, consistent with the verification framework described in the Division’s March 12, 2025, letter. The staff cautioned, however, that issuers must retain sufficient records of the verification process used through the token standard protocol, consistent with guidance in Securities Act Release No. 9415 (July 10, 2013), and reminded issuers that whether reasonable steps were taken to verify accredited investor status remains an objective, facts-and-circumstances determination by the issuer or those acting on its behalf. For more information, click here.
On July 20, the Federal Deposit Insurance Corporation (FDIC) published a notice and request for comment in the Federal Register seeking public input on proposed reporting forms and instructions associated with Office of Management and Budget (OMB) Control No. 3064-0225, developed in connection with the FDIC’s notice of proposed rulemaking implementing the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act) requirements for FDIC-supervised permitted payment stablecoin issuers (PPSIs). The proposed reporting framework consists of three forms: Form PS-01, a weekly confidential reporting form for larger PPSIs with $1 billion or more in total outstanding issuance value or $100 million or more in average daily transaction volume, comprising eight schedules covering general information, issuance and redemption activity, and detailed reserve asset composition including cash balances, U.S. Treasury securities, reverse repurchase agreements, money market mutual funds, and other instruments; Form PS-01a, an abridged three-schedule weekly form for smaller PPSIs falling below those thresholds; and Form PS-02, a quarterly financial condition report for all PPSIs modeled on the existing Call Report framework, with five schedules covering income statements, balance sheets, off-balance sheet items, capital and operational backstop information, and supplemental memorandum data. The FDIC estimates that approximately 30 FDIC-supervised institutions will engage in permitted payment stablecoin activities, with total annual reporting burden for the weekly and quarterly forms estimated at 3,840 hours, and invites comments on the appropriateness and utility of the proposed forms, burden estimates, and preferred structured data submission formats, with comments due by September 18, 2026. For more information, click here.
On July 20, the SEC published a final rule in the Federal Register amending its rules delegating authority to SEC staff under 17 C.F.R. Parts 200, 201, and 203, effective July 26, 2026. The rule makes three principal changes to modernize and streamline the SEC’s internal operations. First, it consolidates certain administrative registration functions previously delegated to the director of the Division of Examinations — including authority to grant or cancel registrations of brokers, dealers, municipal advisors, municipal securities dealers, government securities brokers and dealers, transfer agents, investment advisers, and security-based swap dealers and major security-based swap participants — and transfers those delegations to the director of the EDGAR Business Office, where related filer support functions are already housed, in order to reduce redundancy and improve customer service. Second, it delegates to the director of the Office of Municipal Securities the authority to issue orders canceling the registration of municipal securities dealers — an authority that office previously lacked despite holding comparable registration-granting authority — providing greater consistency with how other regulated entities are treated. Third, it makes technical corrections to Rules 430 and 431 of the SEC’s Rules of Practice to clarify that the SEC’s right of review over delegated actions extends to actions taken by the director of the EDGAR Business Office, and updates Rule 2 of the Rules Related to Investigations to reflect current division names and a recent internal reorganization. The SEC determined that these amendments relate solely to agency organization, procedure, or practice and therefore did not require notice-and-comment rulemaking under the Administrative Procedure Act. For more information, click here.
On July 20, FINRA Executive Vice President and Head of Examinations Jim Reese published a blog post outlining a series of enhancements to FINRA’s examination program under the FINRA Forward initiative, aimed at making exams more transparent, efficient, and risk-informed. On the transparency front, FINRA began providing members with advance notice of the quarter in which their exam is expected to be announced, giving firms more time to prepare and allocate resources, and introduced the option for members to receive preliminary exam findings in writing throughout the examination — a feature that has proven popular since its March 2026 launch, with the majority of members who specified a preference opting in. On the efficiency front, FINRA adjusted its examination schedules so that certain lower-risk member firms are now examined every six years rather than every four, while remaining subject to ongoing risk monitoring, and refined its initial examination process for newly approved firms by drawing more heavily on information gathered during the membership application review, resulting in a 12% reduction in total external data requests in 2025 and a greater than 50% drop in policy-driven initial trade blotter requests. These examination improvements are supported by a broader internal reorganization that consolidates Risk Monitoring and Intelligence, Surveillance, Examinations, Investigations, and Enforcement into a single Regulatory Operations reporting structure to promote deeper information sharing and reduce regulatory duplication for members. Looking ahead, Reese noted that FINRA’s longer-term vision includes automated processes to shorten exam timelines and AI-powered tools to speed the analysis of Written Supervisory Procedures, with member feedback continuing to play a central role in the program’s evolution. For more information, click here.
On July 20, the FTC announced that Alexander Mashinsky, former CEO of cryptocurrency platform Celsius Network, and co-founders Shlomi Daniel Leon and Hanoch “Nuke” Goldstein agreed to pay a combined $16.5 million — $10 million, $4.1 million, and $2.4 million, respectively — to resolve FTC charges stemming from a July 2023 complaint alleging that the Celsius founders deceived consumers by falsely promising that deposits were safe and always available, that the company maintained a $750 million insurance policy, that it had sufficient reserves to meet customer obligations, that users could earn rewards of up to 18% annual percentage yield, and that Celsius made no unsecured loans, all while the company’s top executives continued to claim deposits were safe just days before Celsius filed for bankruptcy. In addition to the monetary penalties, Mashinsky and Leon are banned from marketing or selling products or services that can be used to deposit, exchange, invest, or withdraw assets, and Goldstein is banned from marketing or selling retail products or services related to buying, selling, depositing, withdrawing, distributing, or trading cryptocurrency. All three are also prohibited from making misrepresentations about any product or service, violating the Gramm-Leach-Bliley Act, and the orders with Mashinsky and Leon further prohibit disclosure of consumers’ nonpublic personal information without express informed consent. The proposed orders were filed in the U.S. District Court for the Southern District of New York and will have the force of law upon court approval. For more information, click here.
On July 20, the Bank for International Settlements (BIS) published Bulletin No. 129, examining the dual-edged implications of frontier artificial intelligence (AI) models for cybersecurity risk in the financial system. The bulletin finds that while frontier AI increases the speed, scale, and complexity of cyberattacks, it simultaneously strengthens cyber defense capabilities, but that the costs of this dynamic are asymmetric and may favor attackers over defenders. The authors conclude that the medium-term impact on systemic cyber risk will depend on the relative access of various actors, including malicious ones, to the most advanced AI tools, on available compute power to run those tools, and on the underlying economic incentives at play. Given the rapid pace of AI development, the bulletin calls for swift adoption of frontier AI models by financial institutions and authorities to review code bases and remediate vulnerabilities, and emphasizes that international coordination among regulators and central banks will be essential to addressing the systemic cyber risks that frontier AI presents. For more information, click here.
On July 16, the Financial Action Task Force (FATF) published its seventh Targeted Update on Implementation of the FATF Standards on Virtual Assets (VAs) and Virtual Asset Service Providers (VASPs), finding that while global regulatory progress continues — with 83% of surveyed jurisdictions now having passed Travel Rule legislation, up from 73% in 2025 — significant implementation gaps remain that organized crime groups are actively exploiting to move billions in illicit proceeds through the virtual asset sector. The report identifies a growing range of criminal threats, including scam center operations linked to organized crime groups, “pig-butchering” fraud schemes, North Korea (DPRK)-related cyber theft, terrorist and proliferation financing, sanctions evasion, and cross-border money laundering, with one Cambodia-based financial conglomerate alone laundering at least $4 billion in illicit proceeds between 2021 and 2025. The FATF also highlighted the increasing misuse of artificial intelligence — including deepfakes, synthetic identities, and AI-enabled recruitment scams — as well as the growing use of stablecoins by illicit actors, with most identified on-chain illicit activity now involving stablecoins, and noted an emerging risk of criminal networks developing proprietary stablecoins designed to resist asset freezing and seizure. Jurisdictions continue to struggle with identifying unlicensed VASP activity, supervising offshore VASPs, and assessing risks posed by decentralized finance (DeFi) platforms, and the FATF called on both governments and the private sector to strengthen risk-based supervision and enforcement, improve Travel Rule implementation, enhance international cooperation, and close regulatory gaps before criminal methods outpace existing safeguards. For more information, click here.
On July 15, outgoing CFPB Acting Director Russell T. Vought testified before the House Committee on Financial Services, presenting the Bureau’s semi-annual report and summarizing his tenure’s approach to restructuring the agency. Vought characterized the CFPB under prior administrations as “weaponized” and operating beyond its statutory mandate, citing a Council of Economic Advisors finding that the Bureau cost consumers between $237 and $369 billion since 2011, and outlined his efforts to reorient the Bureau toward humility, accountability, and fiscal responsibility — refocusing supervision on pressing consumer threats within clear statutory authority, reorienting enforcement toward actual consumer harm and due process, and aligning regulatory actions with administration priorities through the Office of Information and Regulatory Affairs (OIRA). Vought also referenced the Supreme Court’s recent decision in Slaughter as confirming presidential authority over independent regulatory agencies. While crediting progress made during his tenure, Vought concluded that the CFPB remains “structurally defective” and should not exist in its current form, calling on Congress to subject the Bureau to the appropriations process to ensure accountability, and expressing confidence in Trump nominee Brian Johnson to continue the Bureau’s redirected course. For more information, click here.
On July 14, the U.S. Justice Department announced a $160,000 settlement with S & K Towing Inc., a San Clemente, CA towing company, resolving allegations that it violated the Servicemembers Civil Relief Act (SCRA) by illegally auctioning or disposing of as many as 148 vehicles owned by military servicemembers, many towed from Marine Corps Base Camp Pendleton, without first obtaining the court orders required by federal law. The company continued the practice even after being advised by a military legal assistance attorney in May 2024 that it was violating the SCRA, with a manager reportedly responding, “We do this all the time.” Under the settlement, S & K Towing will pay $160,000 to harmed servicemembers and, if it reenters the towing business after its current shutdown, must adopt SCRA-compliant policies and procedures. For more information, click here.
On June 16, the Office of the Comptroller of the Currency (OCC) issued a cease-and-desist order against United Texas Bank, N.A., citing deficiencies in its BSA/AML compliance program that resulted in violations of law or regulation. The action is notable not only for its substance, but for its context. The order was issued as a condition of the bank’s conversion to a national bank charter supervised by the OCC. United Texas Bank was formerly a Texas state-chartered bank supervised by the Texas Department of Banking and a member of the Federal Reserve System. In August 2024, the bank consented to a cease-and-desist order with the Federal Reserve Bank of Dallas and the Texas Department of Banking after examiners identified significant deficiencies in its foreign correspondent banking and virtual currency customer programs, specifically in risk management and compliance with the BSA, applicable Treasury regulations, and Federal Reserve Regulation H. In November 2025, the bank filed an application with the OCC to convert to a national bank charter. The OCC approved the conversion in May 2026, but conditioned that approval on the bank entering into a new cease-and-desist order upon consummation of the conversion. The conversion was completed on June 12, 2026, and the OCC issued its order four days later. The order carries forward the corrective action obligations of the 2024 order under OCC supervision across five substantive areas. For more information, click here.
State Activities:
On July 22, the New York State Department of Financial Services (DFS) filed a notice of proposed rulemaking to add new Part 202 to Title 23 of the New York Compilation of Codes, Rules and Regulations. The proposed rule, promulgated by Acting Superintendent Kaitlin Asrow, establishes a regulatory framework for authorized payment stablecoin issuers that aligns New York’s existing stablecoin regime with the federal Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act), Public Law 119-27. The rule covers application and approval requirements for limited purpose trust companies and other eligible entities seeking to issue payment stablecoins, as well as prohibited activities including rehypothecation, tying, misleading marketing, and the payment of interest. It also establishes reserve asset composition, diversification, and monthly reporting and certification requirements, including a minimum insured deposit requirement for issuers with outstanding issuance values of $25 billion or more. Redemption policies must provide for timely redemption within two business days, and issuers must maintain capital and operational backstop standards commensurate with their risk profile. The rule further imposes BSA/AML and sanctions compliance obligations with annual certification requirements, and sets operational standards governing internal controls, audits, liquidity management, insider transactions, and service provider oversight. Cybersecurity requirements are aligned with DFS Part 500, and the superintendent retains broad examination, recordkeeping, and enforcement authority over authorized issuers. Insolvency and custody provisions are implemented consistent with the GENIUS Act. The rule takes effect upon the effective date of the GENIUS Act and, upon effectiveness, withdraws the DFS’s June 8, 2022, industry letter on U.S. dollar-backed stablecoins. For more information, click here.
On July 21, the Chamber of Digital Commerce, doing business as The Digital Chamber (TDC), filed a verified complaint for declaratory and injunctive relief in the Circuit Court of Sangamon County, IL, challenging the constitutionality of Illinois’s Digital Asset Tax Act, which is set to take effect January 1, 2027. The complaint alleges that the act, which imposes a 0.2% tax on each occurrence of exchanging, transferring, or storing a digital asset as part of a business, is the first law in the nation to impose materially different tax consequences on economically identical property solely because ownership is recorded and transferred using blockchain technology, taxing tokenized Treasury securities, dollar-denominated stablecoins, and blockchain-based equity while leaving their traditional infrastructure counterparts completely untaxed. TDC argues the act violates the Illinois Constitution’s uniformity and due process provisions, unconstitutionally burdens interstate commerce under the U.S. Constitution’s Commerce Clause, and is preempted by the federal Internet Tax Freedom Act, citing among other defects the act’s failure to define “value,” its treatment of mere custody as a taxable event, its imposition of repeated taxes on transfers that do not change beneficial ownership, its use of a rebuttable presumption of Illinois nexus based solely on a customer’s mailing address, and its enforcement through Class 3 felony penalties despite providing no administrable standards for determining who qualifies as a “digital asset broker” or what constitutes a single taxable occurrence. TDC further alleges that its more than 250 member companies, including exchanges, custodians, stablecoin issuers, payment companies, and tokenization platforms, are already incurring unrecoverable compliance costs ranging from $10,000 to more than $1 million per company and face irreparable harm, and seeks a declaration that the act is facially invalid and a preliminary and permanent injunction barring its implementation and enforcement. For more information, click here.
On July 20, Delaware Governor Matt Meyer signed Senate Substitute No. 1 for Senate Bill 13, establishing comprehensive hospital financial assistance standards and significant new protections for patients against medical debt collection. The law prohibits medical creditors and medical debt collectors from taking extraordinary collection actions against patients who qualify or likely qualify for financial assistance, and bars collection communications, litigation, debt referrals, debt sales, and reporting to consumer reporting agencies while a patient’s financial assistance application or appeal is pending. The law also makes noncompliance with the new financial assistance requirements, or a patient’s eligibility for financial assistance, a complete defense in any civil action to collect medical debt, and prohibits courts from entering default judgments in medical debt collection actions without a sworn affidavit from a responsible hospital officer confirming that the patient was offered financial assistance screening before the action was initiated and was determined ineligible or did not respond. If a hospital failed to screen a patient or incorrectly denied financial assistance, it must refund amounts paid, waive amounts owed, and notify any collection agency that the debt is invalid. The minimum financial assistance income thresholds take effect January 1, 2027, with all other provisions taking effect upon adoption of final implementing regulations by the Diamond State Hospital Cost Review Board or July 1, 2027, whichever is earlier. For more information, click here.
On July 17, the Kansas Office of the State Bank Commissioner closed Small Business Bank of Lenexa, KS, and appointed the FDIC as receiver, citing ongoing operating losses that left the bank critically undercapitalized under federal and state law following several years of financial difficulties and strict supervisory oversight. The bank’s single office reopened as a branch of The Farmers State Bank of Oakley, KS on July 20, 2026, with all depositors automatically transferred and deposit insurance coverage continuing uninterrupted under the FDIC. For more information, click here.
On July 16, the New York State DFS announced that Swedbank AB and its New York branch agreed to pay a $50 million penalty under a consent order resolving the DFS’s investigation into the bank’s compliance with New York Banking Law and its failure to fully cooperate with regulatory information requests. The investigation stemmed from the 2016 Panama Papers leak of Mossack Fonseca law firm records, which prompted DFS to review licensees connected to the firm, including Swedbank. Over the course of two years, DFS issued two information requests to Swedbank seeking details about its relationships with Mossack Fonseca and related entities, and found that the bank repeatedly withheld critical information in response to both requests. In response to the first request, Swedbank failed to report exposure beyond its New York branch, failed to acknowledge the existence of European regulatory inquiries, and withheld information about its Baltic subsidiaries in Latvia, Lithuania, and Estonia, including connections between certain customers and Mossack Fonseca. In response to the follow-up request, DFS found that Swedbank created a false impression that it would review its Baltic subsidiaries for responsive information, intentionally excluded those subsidiaries from its production to avoid revealing its numerous connections to Mossack Fonseca, and failed to disclose adverse findings by European regulators — conduct that bank employees themselves acknowledged should have been included in the production. For more information, click here.
On July 15, the New York State DFS filed a notice of proposed rulemaking to add new Part 423 to Title 3 of the New York Compilation of Codes, Rules and Regulations and to amend Part 101 of Title 23, establishing a comprehensive licensing and regulatory framework for buy-now-pay-later (BNPL) lenders operating in New York. Promulgated by Acting Superintendent Kaitlin Asrow, the proposed rule defines BNPL loans as closed-end credit extended to consumers in connection with specific purchases of goods or services, and creates two categories of loans — interest-free and interest-bearing — each requiring separate category permission from the superintendent. The rule requires nonexempt BNPL lenders to obtain a license from DFS, with existing lenders given 45 days from the effective date to apply for provisional licensure, and prohibits unlicensed entities from offering BNPL products. Key substantive requirements cover interest rate caps consistent with New York’s General Obligations Law, penalty fee limitations, including an $8 safe harbor for fees not otherwise approved by the superintendent, restrictions on failed payment attempts, and prohibitions on cross-loan penalty provisions. The rule imposes detailed disclosure obligations including pre-transaction disclosures, post-transaction confirmations within one business day, and periodic statements on at least a monthly cycle, with all disclosures required in English and Spanish and any other language used in the lender’s New York advertising. BNPL lenders must perform risk-based underwriting that assesses consumer income and indebtedness before extending credit, and must maintain robust refund, billing error, and unauthorized use dispute resolution procedures modeled closely on federal Regulation Z standards. The rule also establishes strong data privacy protections, requiring affirmative consumer consent, renewed annually, before covered consumer data may be used, sold, or shared for any purpose beyond making the specific BNPL loan, and prohibiting lenders from conditioning loan availability on consumer consent to data sharing. Additional operational requirements include capital adequacy and surety bond obligations, quarterly and annual financial reporting, advertising and marketing standards, a designated compliance officer, and customer service availability of at least 10 hours per day on business days. The amendment to Part 101 adds licensed and authorized BNPL lenders to the licensed financial services providers industry group for assessment purposes, with the industry financial basis measured by the dollar value of BNPL loans originated, acquired, or made through the lender’s platform. The rule takes effect 180 days after publication of the notice of adoption in the State Register, and the public comment period expires September 14, 2026. For more information, click here.
On July 13, the Maine Bureau of Consumer Credit Protection (BCCP) issued a consumer caution regarding shared appreciation mortgages (SAMs), also known as home equity investments (HEIs), warning that while these products are often marketed as a way to access cash without additional monthly payments, they are complex agreements that can result in significant and unexpected costs — particularly if home values rise, as repayment is made as a lump sum based on a share of the home’s future value and typically becomes due upon sale, the homeowner’s death, or contract expiration, which may be as little as 10 years. Maine consumers are protected by emergency legislation signed by Governor Janet Mills on April 13, 2026, which classifies SAMs and HEIs as mortgage loans rather than investment contracts, requires sellers to be licensed by BCCP, mandates a three-day right to cancel, and extends standard mortgage foreclosure protections to these products. BCCP Superintendent Linda Conti urged Mainers considering tapping into home equity to compare these products against traditional alternatives such as home equity loans, home equity lines of credit (HELOCs), or state and local assistance programs, to consult a trusted financial professional, and to verify that any lender offering a SAM or HEI is licensed through BCCP’s website or the Nationwide Multistate Licensing System Consumer Access portal. For more information, click here.
On July 8, New York Governor Kathy Hochul issued Executive Order No. 61, directing all affected state agencies to undertake a comprehensive “Regulatory Reset,” i.e., a methodical review of thousands of regulations, fees, and policies across state government as part of the broader EXPRESS NY (Expediting Processes and Regulations to Enable Streamlined Services) initiative. The order requires agencies to review fee schedules and penalty structures to ensure they are fair, transparent, and proportionate; streamline or eliminate mandated reports, redundant boards, commissions, and councils that consume taxpayer resources without commensurate public benefit; and modernize or repeal outdated regulations that unnecessarily increase costs, restrict access to services, or delay progress. The initiative builds on an initial wave of 50 regulatory actions across 22 state agencies announced in June 2026, which are expected to save New Yorkers tens of millions of dollars in fees and over one million hours of time annually, with more than 1.5 million state residents projected to benefit. For more information, click here.
On July 8, the New Jersey Supreme Court issued a unanimous opinion in Diana, delivering a decisive and long-awaited victory for debt buyers operating in New Jersey. The court’s ruling — affirming the dismissal of a putative class action brought by a borrower seeking to void his credit card debt — definitively closes the door on a theory of liability that has dogged the debt-buying industry in New Jersey for years. The plaintiff defaulted on a modest credit card balance of $618.91. After the debt changed hands through a series of assignments, the plaintiff filed a putative class action in 2023 alleging that, among others, the debt buyer violated the New Jersey Consumer Finance Licensing Act (CFLA) by purchasing and holding consumer debt without first obtaining the required consumer lender or sales finance company licenses. Critically, the plaintiff sought to weaponize N.J.S.A. 17:11C-33(b) — the CFLA’s criminal enforcement provision — as the basis for a private right of action to void the debt outright and enjoin further collection, on behalf of himself and an entire class of New Jersey borrowers. The potential exposure for the debt-buying industry was enormous. If the plaintiff’s theory had prevailed, any debt buyer that had not obtained a New Jersey consumer lender license before taking assignment of consumer debt could have faced class-wide actions seeking to void those debt portfolios in their entirety. The New Jersey Supreme Court, in an opinion authored by Justice Hoffman and joined by all six of his colleagues — Chief Justice Rabner and Justices Patterson, Pierre-Louis, Wainer Apter, Fasciale, and Noriega — held without reservation that the CFLA does not contain an implied private right of action for a borrower to void a loan contract. For more information, click here.
On July 8, the Washington State Department of Financial Institutions (DFI) entered a consent order against West Capital Lending, Inc., resolving a statement of charges originally filed on September 8, 2025, arising from an examination of the company’s business practices conducted between March 18 and March 31, 2024. The examination uncovered numerous violations of Washington’s Consumer Loan Act, including employing at least one unlicensed mortgage loan originator, taking at least one residential mortgage loan application prior to obtaining a license, utilizing at least six unlicensed managers to supervise licensed mortgage loan originators, failing to prepare and maintain at least 34 required supervisory plans, failing to maintain required surety bond coverage for 2023 and 2024, submitting untimely and inaccurate annual reports for 2022 and 2023, failing to provide timely rate lock agreements to at least four borrowers, using prohibited advertising terms such as “lowest interest rates and closing costs possible” and “most competitive rates,” failing to include required license numbers on at least three webpages, compensating at least one loan originator based on loan profit, failing to provide complete and accurate privacy policies and closing disclosures to borrowers, and failing to implement a compliant BSA/AML program including ongoing employee training and independent testing. Without admitting wrongdoing, West Capital Lending agreed to pay a total of $78,000 — consisting of a $75,000 fine and a $3,000 investigation fee — and agreed to future compliance with the Consumer Loan Act and all applicable federal laws and regulations. For more information, click here.
On July 7, the Oregon Division of Financial Regulation entered a consent cease-and-desist order and civil penalty assessment against Tri-State Adjustments, Inc., a Wisconsin-based debt collection company, for conducting collection agency activity in Oregon without the required state registration in violation of ORS 697.015. The investigation was triggered by a consumer complaint received in April 2025, which prompted the Division to discover that Tri-State had collected $155,518.40 from 1,569 Oregon consumers and businesses on behalf of third-party creditors without ever obtaining an Oregon collection agency registration, claiming incorrectly that it was exempt from the requirement. After the Division put Tri-State on notice in February 2026, the company collected an additional $21,735.39 from 243 more Oregon consumers before finally obtaining its registration on April 6, 2026, bringing the total number of violations to 1,812. The Division assessed a total civil penalty of $181,500 — calculated at $400 for the first offense and $1,000 for each subsequent offense — but suspended $141,500 of that amount for three years contingent on Tri-State’s compliance with the consent order and the Oregon Collection Agency Law, with an immediate payment of $10,000 due upon entry of the order. For more information, click here.