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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 August 8, Senate Majority Leader John Thune filed cloture on the motion to proceed to the Clarity Act, legislation that would establish a regulatory framework for digital assets, shortly before the Senate departed for its summer recess, setting up a procedural vote for September 15, 2026, the day after the Senate returns. While the cloture filing keeps the legislation alive and on the Senate calendar, invoking cloture requires 60 votes and does not itself pass the bill, and negotiators have yet to resolve outstanding disputes over ethics clauses, illicit finance provisions, and how Senate Agriculture Committee text will be incorporated into the final legislation. For more information, click here.
On August 7, the Federal Trade Commission (FTC) announced a policy statement declaring that the Commission will no longer pursue claims based on disparate-impact or “unfair discrimination” theories, with Chairman Andrew N. Ferguson stating that disparate-impact claims are inconsistent with the Constitution because they impose liability for discrimination without evidence of discriminatory intent, effectively pushing businesses to make race-based decisions to avoid liability. The policy statement follows President Trump’s executive order on “Restoring Equality of Opportunity and Meritocracy” and concludes that the FTC lacks statutory authority to bring disparate-impact claims, that disparate-impact analysis would require pernicious race-based outcome analysis, and that Congress did not grant the FTC such sweeping authority. The Commission clarified that it will continue to pursue disparate-treatment claims under the Equal Credit Opportunity Act and will treat § 5 of the FTC Act as a consumer protection statute, and in connection with the policy change, reviewed and entered into agreements to modify compliance-related obligations in prior matters that had been based on statistical disparate-impact analyses. The policy statement was approved by a 2-0 Commission vote. For more information, click here.
On August 7, the Commodity Futures Trading Commission’s (CFTC) Division of Market Oversight and Market Participants Division issued a joint letter to CFTC-regulated entities and their affiliates reminding them of the prohibition on misleading and deceptive practices under § 9 of the Commodity Exchange Act and Commission Regulation 180.1, which together prohibit the use of manipulative or deceptive devices, untrue or misleading statements of material fact, and acts or practices that operate as a fraud or deceit in connection with swaps. The letter was prompted by staff concerns that some entities involved in listing, soliciting, or accepting event contracts, including prediction market products, are marketing those derivatives using “American odds” formatting typical of casino gambling bookmakers rather than the nominal or percentage terms that reflect actual market pricing, a practice the CFTC staff views as likely to mislead market participants about the nature of the product they are trading, deprive them of meaningful information about market depth and pricing impact, and potentially drive them toward higher-margin, non-market-priced bookmaking products. The divisions reminded designated contract markets (DCMs), introducing brokers, and futures commission merchants that derivative contract prices are determined by competitive market forces on regulated exchanges, not set by a bookmaker, and directed all covered entities to review their pricing displays, marketing materials, and partner and affiliate communications to ensure compliance, and to confirm receipt of the letter by August 31, 2026. For more information, click here.
On August 7, the U.S. Department of the Treasury released the Committee on Foreign Investment in the United States (CFIUS) Annual Report to Congress for calendar year 2025, highlighting key statistics and activities from the committee’s review of foreign investment transactions during the year. The report shows that CFIUS processed a total of 347 notices and declarations of covered transactions or covered real estate transactions, clearing 67% of distinct transactions within either the 30-day assessment period for declarations or the initial 45-day review period for notices, despite operational challenges caused by lapses in appropriations. The report also highlights CFIUS’s continued enforcement of compliance obligations — particularly mandatory filing requirements for transactions involving critical technology, critical infrastructure, and sensitive personal data — and the launch of the Known Investor Pilot Program, a new initiative designed to facilitate greater investment from U.S. allies and partners by collecting detailed information from foreign investors in advance of potential transaction filings, consistent with President Trump’s America First Investment Policy. For more information, click here.
On August 6, the Senate Banking, Housing, and Urban Affairs Committee held a hearing entitled “Empowering Main Street by Unlocking Access to Capital.” Committee Chairman Tim Scott (R-S.C.) opened the hearing by emphasizing the need to expand investment opportunities for everyday Americans, help companies go public and stay public, and improve capital access for small and medium-sized businesses, highlighting bipartisan legislative proposals including his Empowering Main Street in America Act, legislation with Senator Warner to help emerging growth companies access public markets, and bills addressing 403(b) plan parity and business development company regulations. Ranking Member Senator Elizabeth Warren (D-MA) used her time to raise concerns about what she characterized as corruption undermining market integrity under the Trump administration, including Securities and Exchange Commission (SEC) enforcement activity dropping 20% to its lowest level in nearly 20 years, proposed reductions in public company disclosure requirements, and a plan by President Trump’s social media company to sell faster access to his market-moving posts to investors paying up to $100,000 per month. For more information, click here, here, and here.
On August 5, the SEC announced the establishment of a new specialized unit within its Division of Enforcement focused exclusively on accounting and financial reporting fraud, as well as misconduct in the accounting and auditing professions. The Financial Reporting and Accounting Unit will pursue cases involving: accounting and financial reporting fraud; misconduct by accountants and auditors; and violations of federal securities laws in the financial reporting context. The unit will work in close collaboration with staff across all relevant SEC divisions and offices to ensure enforcement efforts are consistent with the Commission’s broader policy goals. It will be staffed by both attorneys and accountants with specialized expertise in financial reporting, accounting, and auditing in the context of securities regulation. For more information, click here.
On August 4, the Federal Deposit Insurance Corporation (FDIC) announced the launch of a new Office of Supervisory Appeals (OSA), a standalone office that replaces the Supervision Appeals Review Committee as the final level of review for appeals of material supervisory determinations brought against FDIC-supervised institutions. The OSA became operational following the FDIC Board of Directors’ January 22, 2026, approval of amendments to the agency’s Guidelines for Appeals of Material Supervisory Determinations, and will be staffed by three independent reviewing officials: Tim Ayala, a former FDIC commissioned examiner and senior leader with private sector experience; John Conneely, a former FDIC senior executive with 35 years of bank supervision experience including service as division director of Complex Institutions Supervision and Resolution and Chicago regional director; and Duke Sheow, a former senior commissioned examiner with both the FDIC and the Federal Reserve Bank of San Francisco. The FDIC also issued a Financial Institution Letter providing specific instructions for institutions seeking to appeal material supervisory determinations to the new office. For more information, click here.
On August 3, the Office of the Comptroller of the Currency (OCC) issued a notice of proposed rulemaking requesting public comment on proposed structural and substantive changes to its rules governing the disclosure of OCC information. The proposal seeks to improve the balance between protecting OCC confidential supervisory information, which is essential to the candid exchange between the OCC and supervised entities that underpins effective bank supervision, and permitting disclosure in limited circumstances to support economical business operations, public confidence in the financial system, and agency accountability and transparency. Comments are due 60 days after publication in the Federal Register. For more information, click here.
On July 31, the OCC and the FDIC issued a joint notice of proposed rulemaking to amend their Community Reinvestment Act (CRA) rules, seeking to better align the regulatory framework with the CRA’s statutory mandate, ensure that community development grants reach their intended beneficiaries rather than being diverted to other activities or excessive operating costs, reduce burden on banks (particularly community banks) and provide greater clarity on how institutions can obtain CRA consideration. The proposal retains the core elements of the regulatory framework in place since 1995 while making targeted substantive, technical, and process-oriented changes, including narrowing the range of retail banking services considered for CRA credit to focus on lending rather than deposit services, and exempting banks with $10 billion or less in assets from data collection, maintenance, and reporting requirements in favor of more flexible supervision. The rulemaking comes after the agencies’ October 2023 CRA final rules were enjoined by the U.S. District Court for the Northern District of Texas before they took effect, and comments on the new proposal are due 60 days after publication in the Federal Register. For more information, click here.
On July 31, the OCC, Federal Reserve Board, FDIC, and National Credit Union Administration jointly issued a statement of enforcement policy providing that eligible U.S. financial institutions that choose to provide authorized financial services to persons or entities in Venezuela will not be subject to supervisory action, citations for violations of law, or enforcement actions related to Bank Secrecy Act (BSA) requirements as a result of providing such services, in support of humanitarian relief and financial stability efforts following a pair of strong earthquakes that struck off Venezuela’s northern coast on June 24, 2026, causing significant damage and triggering a humanitarian crisis. The enforcement relief applies from July 31, 2026 through January 29, 2027, and is available to institutions that are currently in compliance with applicable BSA program requirements and continuing to make reasonable compliance efforts, have not been subject to a final BSA-related enforcement action with Financial Crimes Enforcement Network or the OCC within the prior 24 months, and remain compliant with all applicable Office of Foreign Assets Control sanctions regulations and authorizations. The joint statement is intended to ensure that regulatory uncertainty does not impede the timely provision of financial services in support of Venezuela’s recovery, while making clear that the enforcement relief does not extend to knowing, willful, or intentional violations of BSA requirements. For more information, click here.
On July 31, the Federal Reserve Board issued a proposed rulemaking requesting public comment on a comprehensive modernization of its rules governing mutual banking organizations (depositor-owned institutions of which more than 90% have less than $3 billion in total assets) marking the first update to these rules since they were originally established in 1993. The Board, which assumed regulatory and supervisory authority over mutual banks from the Office of Thrift Supervision in 2011, noted that the existing rules have proven overly burdensome and complex over time. The proposal would modernize the regulatory framework, increase flexibility for certain mutual banks to raise capital, clarify which instruments qualify as regulatory capital, and reduce procedural burdens, with the goal of allowing mutual banks to continue to grow and more effectively serve their communities while preserving their unique depositor-owned structure. Comments are due 60 days after publication in the Federal Register. For more information, click here.
On July 31, the Federal Reserve Board and the FDIC each issued coordinated proposed rulemakings requesting public comment on modernizing their respective rules governing the extension of credit to bank “insiders,” including bank executives, board members, principal shareholders, and their related interests, marking the first comprehensive update to the Federal Reserve’s Regulation O since 1979 and updating FDIC insider lending thresholds that have similarly not been revised in several decades. Both proposals update outdated dollar-based thresholds to reflect inflation and economic growth, index those thresholds to economic conditions going forward to ensure future relevance, and simplify compliance requirements, with the FDIC explicitly aligning its proposed changes with the Federal Reserve’s Regulation O proposal to standardize compliance and avoid disparate treatment between FDIC-supervised institutions and other insured depository institutions. The Federal Reserve’s proposal additionally addresses unnecessary applications of the rule to passive interests held by investment funds, codifies existing statutory requirements, and incorporates long-standing regulatory interpretations, while both agencies emphasized that the updates preserve necessary safeguards against preferential treatment in insider lending. Comments on both proposals are due 60 days after publication in the Federal Register. For more information, click here and here.
On July 30, the OCC, Federal Reserve Board, and FDIC jointly published a revised Community Bank Compliance Guide for the Community Bank Leverage Ratio (CBLR) framework, incorporating changes to the framework that became effective July 1, 2026. The CBLR framework, established under § 201 of the Economic Growth, Regulatory Relief, and Consumer Protection Act and in effect since January 1, 2020, provides a simplified capital adequacy measure for qualifying community banking organizations (those with less than $10 billion in total consolidated assets that meet other qualifying criteria) allowing them to opt out of the generally applicable risk-based capital requirements. The 2026 revisions lower the minimum leverage ratio requirement for eligibility from greater than 9% to greater than 8%, and revise the grace period provisions for banks that temporarily fail to meet qualifying criteria to provide four quarters to return to compliance provided the bank maintains a leverage ratio above 7% and does not exceed eight total grace period quarters over any five-year period, with banks falling to 7% or below required to immediately comply with applicable risk-based capital standards. The compliance guide is intended as a summary resource for qualifying institutions and does not carry the force of law or regulation. For more information, click here.
On July 24, the 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 the CFPB’s authority to regulate unfair, deceptive, or abusive acts or practices 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.
State Activities:
On August 5, the New York State Department of Financial Services (DFS) announced a $250,000 cybersecurity settlement with Order Express, Inc., a licensed money transmitter, for violations of DFS’s cybersecurity regulation (23 NYCRR Part 500), following an investigation that uncovered deficiencies in the company’s cybersecurity program including inadequate policies for system updates and insufficient risk assessments that left the company exposed to vulnerabilities exploitable by threat actors. Acting Superintendent Kaitlin Asrow noted that Order Express has since remediated the identified deficiencies and that, based on its limited revenue, the company is exempt from many of Part 500’s requirements. The DFS cybersecurity regulation, which became effective in March 2017 and was updated in November 2023 to enhance cyber governance and strengthen consumer protections, has served as a national model for regulators including the FTC, multiple states, the National Association of Insurance Commissioners, and the Conference of State Bank Supervisors. For more information, click here.
On July 31, Circle Internet Group, Inc. announced that it has received a limited purpose trust charter from the New York DFS for its subsidiary Circle Internet Trust Company LLC, doing business as Circle New York Trust, deepening the regulatory foundation for Circle and its USDC stablecoin. The new charter builds on Circle’s longstanding relationship with New York DFS, which began in 2015 when Circle became the first company to receive a BitLicense from the agency, and reflects what Circle’s co-founder, chairman, and CEO Jeremy Allaire described as “over a decade of regulatory commitment” as digital dollars become increasingly central to the global financial system. For more information, click here.
On July 27, New Jersey AG Jennifer Davenport announced that Governor Mikie Sherrill will nominate Christopher L. Peterson, a nationally recognized consumer protection expert and former senior advisor at the CFPB, to serve as director of the New Jersey Division of Consumer Affairs, with Peterson set to begin serving as acting director on August 3, 2026, pending formal nomination and State Senate confirmation. Peterson, who most recently served as the John J. Flynn Endowed Professor of Law at the University of Utah’s S.J. Quinney College of Law, played a key role in establishing the CFPB during its formative years, working on its enforcement policy and strategy, and was also instrumental in developing and strengthening the federal Military Lending Act to protect service members and their families from predatory lending. In his new role, Peterson will lead New Jersey’s premier consumer protection agency in protecting consumers’ rights, regulating the securities industry, and overseeing 51 professional boards, succeeding Jeremy E. Hollander who has served as acting director since January 2026 and will return to his position as deputy director of the Division’s Office of Consumer Protection. For more information, click here.
On July 23, California Business & Consumer Services Agency Secretary Rohit Chopra published a blog post announcing the launch of the new Business & Consumer Services Agency, created by Governor Newsom to crack down on harmful and corrupt practices that raise costs for families and honest businesses at a time when, Chopra argued, federal regulators and law enforcement are scaling back consumer protection and competition enforcement. The agency, which houses multiple departments with authority to bring enforcement actions under both state and federal law (including actions that can result in loss of a California operating license) will prioritize identifying undisclosed kickbacks, manipulative pricing schemes, and conduct by individuals and companies that have evaded federal accountability through political connections. Chopra noted that the agency will focus its audit and inspection resources on entities posing the greatest consumer risk rather than smaller firms, will work closely with other states to increase scrutiny of potentially unlawful practices, and will develop improved mechanisms for consumers, businesses, and whistleblowers to submit complaints and law enforcement tips, inviting the public to share ideas about areas the agency should prioritize. For more information, click here.
On July 23, Delaware Governor Meyer signed Senate Bill 297, adding a clarifying interpretive provision to the Delaware Consumer Fraud Act to ensure that its prohibition on unfair and deceptive acts and practices applies to conduct occurring before, during, and after a sale, lease, receipt, or advertisement of merchandise. The legislation was prompted by a December 30, 2025, Delaware Supreme Court decision, which construed the Consumer Fraud Act as confined to conduct occurring before or during a transaction, a reading the General Assembly rejected as inconsistent with the act’s broad remedial purpose, subsequent amendments extending coverage to the “receipt” of merchandise, and the scope of comparable unfair or deceptive acts or practices laws in other states and under the federal FTC Act. The clarification ensures that the Delaware Department of Justice can use the Consumer Fraud Act to address the full range of consumer harm, including post-transaction misconduct such as false and threatening landlord communications, unscrupulous debt collection tactics, and failures to honor promises to repair returned merchandise, and enables Delaware to coordinate more effectively with other states in pursuing entities engaged in nationwide unfair or deceptive conduct. For more information, click here.
On July 21, Michigan Governor Whitmer signed House Bill 6074, which prohibits large institutional investors from purchasing single-family homes in Michigan, mirroring recently enacted bipartisan federal legislation but with a lower cap of 100 single-family homes. The legislation, which passed with bipartisan support, is designed to prevent large corporations from pricing working families and first-time homebuyers out of the housing market, and is part of a broader package of housing bills aimed at expanding housing opportunities, supporting new development, strengthening affordability programs, and giving communities the tools they need to grow and address rising housing costs across the state. For more information, click here.
International Activities:
On August 7, European Central Bank (ECB) President Christine Lagarde responded to a letter from Member of the European Parliament Gerald Hauser, reaffirming the ECB’s commitment to ensuring that the digital euro will complement, not replace, physical cash, and that Europeans will remain free to choose their preferred method of payment. Lagarde emphasized that the digital euro has been designed with privacy as a central priority, noting that offline digital euro payments will offer cash-like privacy with transaction details known only to the payer and payee, while online payments will only allow users’ payment service providers, not the Eurosystem, to link payments to identities, and only for anti-money laundering and counter-terrorism financing compliance purposes. She further noted that all personal data processing will be governed by EU data protection law including the General Data Protection Regulation, that ECB data will be encrypted and pseudonymized using state-of-the-art privacy-enhancing techniques, and that the Eurosystem will enforce the same privacy and data protection rules on digital euro service providers. Lagarde also highlighted the ECB’s ongoing commitment to physical cash, including progress on the Legal Tender of Cash Regulation, a euro banknote redesign initiative, and a public survey running from July 23 to September 21, 2026, inviting Europeans to share their views on proposed new banknote designs. For more information, click here.
On August 7, International Monetary Fund (IMF) First Deputy Managing Director Dan Katz delivered remarks at the University of Cape Town examining the promise, risks, and policy implications of stablecoins for emerging markets, with a particular focus on the risk of accelerated dollarization. Katz noted that while the global stablecoin market has reached approximately $300 billion in market capitalization, with nearly 99% denominated in U.S. dollars, and total stablecoin transaction volume exceeded $30 trillion in 2025, the more significant concern for emerging markets is that stablecoins could dramatically accelerate currency substitution by providing frictionless access to foreign currency through smartphones and digital wallets, potentially far faster than historical dollarization through physical cash or bank deposits. He cautioned that local-currency stablecoins, sometimes promoted as a policy solution, could paradoxically accelerate dollarization by enabling easy on-chain conversion to dollar-denominated stablecoins, undermining capital flow management measures designed for traditional regulated intermediaries. Katz emphasized that the risks are not uniform across countries, varying significantly based on existing dollarization levels, macroeconomic framework strength, and financial market structure, and concluded with five policy recommendations for emerging market authorities: maintaining strong macroeconomic fundamentals as the primary defense against unwanted currency substitution; closing data gaps through regulatory reporting requirements; updating policy toolkits to bring stablecoin exchanges, custodians, and on- and off-ramp providers within the regulatory perimeter; tailoring policy responses to the specific channels through which stablecoin adoption occurs; and strengthening international regulatory cooperation to prevent regulatory arbitrage across jurisdictions. For more information, click here.
On July 31, the G7 Cyber Expert Group (CEG) announced the successful conclusion of its 2026 Cross-Border Coordination Exercise (CBCE), which was held on May 18, 2026, and simulated a large-scale cyber attack across all G7 jurisdictions to test and strengthen the collective ability of G7 financial authorities to coordinate and respond to major cross-border cyber incidents affecting the financial sector. Building on the 2024 CBCE, the exercise brought together ministries of finance, central banks, bank supervisors, and market authorities to test key improvements identified through previous simulations, focusing on incident response, recovery, and crisis communication, while also marking the adoption of a long-term exercise strategy to increase the frequency and consistency of future simulations. Deputy Secretary of the Treasury Francis Brooke noted that as the U.S. prepares to assume the G7 Presidency, the Treasury Department looks forward to deepening practical cooperation through the CEG and advancing a more secure and resilient global financial system, underscoring that cross-border coordination, incident response preparedness, and timely information sharing remain key G7 priorities in an increasingly interconnected world. For more information, click here.