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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 21, the Commodity Futures Trading Commission (CFTC) announced that its Innovation Advisory Committee (IAC) held its inaugural meeting the previous day in Washington, D.C., bringing together a council of American innovators, entrepreneurs, thinkers, and builders to advise the Commission on complex issues at the intersection of technology, law, policy, and finance. The meeting was opened by IAC Designated Federal Officer Michael J. Passalacqua and IAC Chair Walt Lukken, who emphasized that the committee’s role is to provide practical, real-world informed policy advice to the Commission rather than to advocate for any particular technology or business model. Chairman Michael Selig delivered opening remarks framing the meeting as a historic inflection point, stating that innovations like blockchain, artificial intelligence (AI), and prediction markets will inevitably transform financial markets and that the central question is not whether such transformation will occur, but where it will take place and who will write the rules — declaring that under President Donald Trump’s leadership, “America will not simply participate in this new frontier of finance. We will shape it.” Members then discussed three substantive topics consistent with the previously announced agenda: crypto’s regulatory evolution, AI and compute within the derivatives markets, and prediction markets and the future of novel event contracts. For more information, click here.
On August 21, the U.S. Securities and Exchange Commission (SEC) published a notice of proposed rulemaking in the Federal Register titled “Regulation Crypto Assets,” proposing a tailored offering regime for certain investment contracts involving crypto assets (defined as “covered investment contracts”) with comments due by October 20, 2026. The proposal, which follows the Commission’s March 2026 interpretive release on the application of the Howey test to crypto assets, the July 2025 President’s Working Group Report, and Chairman Atkins’ launch of “Project Crypto,” is structured around four core components: (1) a Startup Exemption (Subpart B) permitting offerings of up to $5 million during a four-year period, with principles-based narrative disclosure requirements but no financial statement obligation; (2) a Fundraising Exemption (Subpart C) modeled on Regulation A and permitting offerings of up to $75 million during each 12-month period, with financial statement and ongoing reporting requirements; (3) an Investment Contract Safe Harbor (Subpart D) under which a crypto asset would be deemed by the Commission not to be subject to an investment contract, and therefore not a security, if certain conditions are satisfied, providing a pathway for crypto assets to “graduate” out of securities regulation as a network becomes sufficiently functional or decentralized; and (4) a Qualified Purchaser Definition (Subpart E) that would preempt state securities law registration and qualification requirements for covered investment contract offerings made under the new exemptions, as well as certain secondary market transactions. The proposal is framed as a direct response to longstanding industry criticism of the Commission’s prior “regulation by enforcement” approach, the difficulty of applying the Howey test to crypto assets, and the mismatch between existing disclosure frameworks and the information material to crypto investors, and issuers relying on the new exemptions would remain subject to the antifraud and antimanipulation provisions of the federal securities laws throughout. For more information, click here.
On August 21, the CFTC published a notice of proposed rulemaking in the Federal Register proposing several amendments to its registration requirements for commodity pool operators (CPOs) and commodity trading advisors (CTAs), with comments due by October 5, 2026. The proposal has three main components: (1) a new Proposed Regulation 4.13(a)(4) (the “RIA-QEP Exemption”) which would reinstate and codify (with modifications) a registration exemption for SEC-registered investment advisers (RIAs) acting as CPOs with respect to commodity pools offered solely to sophisticated investors, including qualified eligible persons (QEPs) and certain accredited investors, building on and intended to ultimately supersede the no-action positions issued in CFTC Staff Letters 25-50 and 26-06; (2) conforming amendments to Regulations 4.13 and 4.14 to restore cross-references removed when the original QEP Exemption was rescinded in 2012, including reinstatement of a related CTA registration exemption under Regulation 4.14(a)(8) for investment advisers whose commodity trading advice is directed solely to CPOs of qualifying exempt pools; and (3) an inflation-based adjustment to the Small Pool Exemption under Regulation 4.13(a)(2), increasing the gross capital contributions threshold from $400,000 to $800,000 to reflect the approximate cumulative inflationary impact since the threshold was last adjusted in 2003. The proposal is framed as consistent with the Trump administration’s “minimum effective dose” regulatory philosophy and Selig’s stated priority of reducing duplicative, overlapping regulation between the CFTC and SEC for intermediaries already subject to robust federal oversight. For more information, click here.
On August 21, the CFTC also published a request for public comment seeking input to better inform its understanding and oversight of an emerging class of derivatives contracts referencing the price of access to computing power (“compute”) — the processing power primarily used by large language models at the center of the AI economy, which has grown into a multihundred-billion-dollar enterprise representing an estimated 1.4% to 4.0% of U.S. GDP. The request, which follows White House directives including the July 2025 AI Action Plan and Executive Order 14179 on removing barriers to American AI leadership, acknowledges that a compute futures market could serve important price discovery and risk management functions for the AI economy, but identifies several significant challenges to developing a mature compute derivatives market, including fragmented and opaque bilateral pricing, dominant market participants with significant pricing power, lack of fungibility and standardization, and limited publicly available transaction data. The CFTC’s request for comment, with responses due by October 20, 2026, is organized around four topic areas: (1) the size, liquidity, and characteristics of compute cash markets; (2) market oversight and susceptibility to manipulation, including how Designated Contract Markets (DCMs) could satisfy Core Principles 3 and 4 in the context of a commodity whose prices are primarily set through nonpublic bilateral transactions; (3) customer protection considerations, including anti-money laundering (AML)/know your customer (KYC) concerns and disclosure requirements for retail participants in a geopolitically sensitive commodity market; and (4) the potential advantages and risks of perpetual compute futures contracts, including a notable reference to Selig’s ongoing work to bring the decentralized perpetual futures exchange Hyperliquid into the U.S. regulatory framework. For more information, click here.
On August 20, the U.S. Department of the Treasury announced proposed guidance governing eligible investments in Trump Accounts, with a focus on keeping costs low, promoting broad diversification, and maximizing long-term growth for children’s savings. Treasury previously announced that the State Street SPDR Portfolio S&P 500 ETF (SPYM) would serve as the default investment for all Trump Accounts, along with four additional low-cost index ETFs available for selection by a parent or other responsible party. The proposed guidance would limit eligible investments to options with low expense ratios, excluding products with excessive fees or unnecessarily complex strategies, and establishes a framework for the designation of eligible investments for future Trump Account trustees, including rollover trustees, under which an eligible index must be designed primarily to measure the performance of a broad segment of the U.S. or global equity market using objective financial criteria. Treasury Secretary Scott Bessent emphasized that “every dollar in a child’s Trump Account should be working toward that child’s financial future, not diminished by unnecessary fees,” and Internal Revenue Service (IRS) CEO Frank Bisignano noted that even small differences in annual costs can have a meaningful effect on the amount available in adulthood given the decades-long investment horizon involved. For more information, click here.
On August 20, Senate Banking Committee Chairman Tim Scott (R-SC) and Digital Assets Subcommittee Chair Cynthia Lummis (R-WY) appeared together at the SALT 2026 Conference for a fireside chat where Scott made a forceful case for passing the CLARITY Act as the necessary next step in cementing U.S. leadership in digital assets. Scott emphasized that regulatory guidance alone is insufficient, pointing to the risk of a future administration reversing course, and argued that durable rules must be embedded in legislation to give innovators the certainty and predictability they need to build in the U.S. rather than abroad. On the path forward, Scott expressed optimism about a September vote, noting that forcing a floor vote compels Democrats to publicly state their position, and credited his ability to unite all 13 Republican members of the Banking Committee as the key to the bill’s committee success. Lummis highlighted Scott’s broader record of supporting community banks through pro-community banking provisions included in already-enacted housing legislation, underscoring his credibility as a legislator willing to fight for the financial sector across multiple fronts. For more information, click here.
On August 20, the Federal Trade Commission (FTC) and Connecticut Attorney General (AG) William Tong secured a $4 million settlement with Manchester, CT auto dealer Chase Nissan LLC, doing business as Manchester City Nissan, along with its owners and managers, resolving allegations of widespread deceptive fee practices that were the subject of a January 2024 lawsuit brought under the FTC Act and the Connecticut Unfair Trade Practices Act. The complaint had alleged that Manchester City Nissan advertised certified pre-owned vehicles at a set price but then charged consumers hundreds to thousands of dollars in additional inspection fees for certification services already included in the advertised price — and in some cases charged for certifications never performed — while also inserting add-on charges including GAP insurance, service contracts, and total loss protection into financing agreements without consumer knowledge or consent, falsely representing that certain add-ons were required as a condition of financing, and overstating government fees in closing documents. Under the stipulated final order, approved by a 2-0 Commission vote and filed in the U.S. District Court for the District of Connecticut, defendants must pay $4 million for consumer redress, refrain from misrepresentations about vehicle certification or warranty status, clearly and conspicuously disclose the maximum total price as the most prominently displayed item excluding only required government charges, and obtain express, informed consumer consent for all charges. The settlement reinforces that “junk fee” enforcement in the auto space remains a priority at both the federal and state level, with the total price disclosure requirement mirroring the FTC’s position in the CARS Rule and March 2026 warning letters to the industry, and state attorneys general continuing to serve as active co-enforcers alongside the FTC. For more information, click here.
On August 19, Trump hosted a White House meeting with crypto and finance executives where he called on Congress to pass a “fair version” of the CLARITY Act, describing the sweeping crypto market structure bill as “very, very powerful structure legislation” that will keep the U.S. ahead of China and open the door to the next wave of digital asset innovation. The CLARITY Act, which would establish federal rules for digital assets and clarify the respective jurisdictional authority of the SEC and CFTC, is expected to return to the Senate floor in September after lawmakers left for recess without a procedural vote, with Republicans still needing approximately six Democratic votes to reach the 60-vote threshold. The meeting also featured CFTC Chair Michael Selig, SEC Chair Paul Atkins, and White House crypto advisor Patrick Witt, and came one day before the inaugural meeting of the CFTC’s Innovation Advisory Committee. Trump pointed to his administration’s strategic Bitcoin reserve, digital asset stockpile, ban on a U.S. central bank digital currency, and the recently enacted GENIUS Act as evidence of the administration’s pro-crypto agenda, and notably mentioned that CFTC Chair Selig is working to bring decentralized perpetual futures exchange Hyperliquid into the U.S. in a “fully compliant and legal fashion.” For more information, click here.
On August 18, the U.S. Department of the Treasury published a notice of proposed rulemaking in the Federal Register to implement § 3 of the GENIUS Act. The proposed rule implements two core prohibitions: an unlawful issuance prohibition restricting stablecoin issuance to permitted payment stablecoin issuers (PPSIs), with criminal penalties of up to $1 million per violation and five years’ imprisonment for knowing violations, and a two-tiered restriction on digital asset service providers (DASPs), with a foreign issuer compliance requirement taking effect January 18, 2027, and a broader prohibition on offering non-PPSI stablecoins to U.S. persons taking effect July 18, 2028. The rule also defines when issuance occurs (at the moment of the first transfer of a newly minted token to an outside party) and includes several key exemptions, including peer-to-peer transfers, same-parent interaccount transactions, self-custody wallets, a comparable foreign regime pathway requiring Office of the Comptroller of the Currency (OCC) registration, transition waivers, and a “reasonable belief” safe harbor protecting foreign issuers from inadvertently triggering U.S. requirements. Notably, Treasury declined to model the rule on existing securities or commodities frameworks such as Regulation S, given the GENIUS Act’s express exclusion of payment stablecoins from the definitions of both securities and commodities, though it has invited public comment on that approach. Comments are due 60 days after the August 18 Federal Register publication date. For more information, click here.
On August 17, the FTC announced that online bill payment firm Doxo and its two co-founders, Steve Shivers and Roger Parks, will pay $2.1 million to settle FTC allegations stemming from a 2024 complaint that the company used misleading search ads to impersonate consumers’ billers (often featuring other companies’ names and logos on its landing pages) to trick consumers into using Doxo’s third-party payment platform despite having no relationship with the overwhelming majority of the companies it claimed were part of its payment network. The FTC also alleged that Doxo added undisclosed “delivery fees” to consumers’ bills, failed to clearly disclose that those fees were waived only for certain payment methods, and deceptively enrolled consumers in a recurring subscription program without clearly disclosing its price or terms. A federal court separately found that Doxo violated the Restore Online Shoppers’ Confidence Act for failing to clearly disclose subscription terms and obtain consumer consent for subscription charges. Under the stipulated final order, approved 2-0 by the Commission and filed in the U.S. District Court for the Western District of Washington, the $2.1 million will be used for consumer redress, and Doxo, Shivers, and Parks are prohibited from misrepresenting their affiliation with billers, using billers’ names or logos deceptively in search ads, misrepresenting fees or total costs, making false representations to obtain consumers’ financial information, and charging consumers without obtaining their express, informed consent. For more information, click here.
On August 13, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued a Financial Trend Analysis revealing that financial institutions flagged nearly $5 billion linked to suspected human smuggling over a three-year period from 2023 to 2025, based on an analysis of 67,540 Bank Secrecy Act (BSA) reports. Key findings include a significant 62% decline in suspected human smuggling-related BSA reports in 2025 after peaking in 2024, with the U.S. ranking first for subject locations by country, followed by Mexico, Guatemala, Honduras, and Colombia. Money Services Businesses (MSBs) filed approximately 97% of the BSA reports in the dataset, with common indicators including transactions outside a customer’s usual pattern, money sent along common migration routes, and suspected structuring to avoid reporting requirements, with 59% of MSB reports citing no verifiable familial connection between the transaction originator and beneficiary. While depository institutions filed only approximately 3% of the total reports, their filings accounted for approximately 61% of the total suspicious activity amount, with typologies including suspected cash structuring, funnel accounts receiving funds from numerous individuals, and travel agencies (ranging from sham operations to potentially unwitting legitimate businesses) arranging travel for migrants. FinCEN Director Andrea Gacki emphasized that suspicious activity flagged by financial institutions provides critical information in the effort to dismantle human smuggling networks, which frequently generate profit for larger transnational criminal organizations including Mexico-based drug cartels. For more information, click here.
On August 6, the National Credit Union Administration (NCUA) liquidated African Diaspora Federal Credit Union in St. Ann, Missouri, after determining the credit union was insolvent and in violation of numerous provisions of the Federal Credit Union Act and NCUA Regulations, including operating in an unsafe and unsound manner. At the time of liquidation, the credit union had 183 members and assets of $547,479, and served members of the African Diaspora Council, Inc. Member deposits are federally insured by the National Credit Union Share Insurance Fund to at least $250,000, and NCUA’s Asset Management and Assistance Center will issue correspondence to individuals holding verified share accounts within one week. For more information, click here.
State Activities:
On August 25, 39 state bankers associations announced the formation of the BankChain Alliance, an industry-owned, industry-designed, and industry-governed blockchain network intended to enable banks of all sizes to offer modern payment services including smart payment tools, tokenized deposits, stablecoins, and automated settlement, while maintaining the regulatory standards, security, and trust customers expect from their financial institutions. Interim Chair Kathy Kraninger, who also serves as President and CEO of the Florida Bankers Association, described the initiative as “an unprecedented collaboration representing thousands of banks” aimed at ensuring that institutions of all sizes can compete in an evolving digital financial landscape without ceding ground to non-bank competitors or large technology firms. The Alliance is currently conducting a rigorous technology partner selection process and is targeting a 2027 network launch; the BankChain Alliance network is designed to be interoperable with other networks and will be open to ownership participation by banks across the country. The participating associations collectively represent thousands of financial institutions serving millions of consumers, businesses, and communities nationwide across 39 states, spanning Alabama, Arkansas, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Indiana, Iowa, Kansas, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nebraska, Nevada, New Hampshire, New Jersey, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, Wisconsin, and Wyoming. For more information, click here.
On August 10, the Washington State Department of Financial Institutions (DFI) issued a consent order against 3N Performance Partners, LLC, formerly known as OPX-America, LLC, resolving an investigation into the company’s unlicensed mortgage-related activities in Washington state. According to the order’s findings, between approximately December 21, 2023, and July 29, 2025, the company acted as a third-party loan processor and/or performed underwriting activities on at least 1,803 residential mortgage loans secured by real property in Washington without ever having obtained a consumer loan company license or mortgage broker license from the DFI — violations the Department concluded ran afoul of Washington’s Consumer Loan Act, related administrative rules, and federal law under 12 U.S.C. § 5103(b)(2). Under the terms of the Consent Order, 3N Performance Partners admitted the findings of fact and conclusions of law, agreed to cease and desist all violations of the Consumer Loan Act and applicable federal laws and regulations, and agreed to pay a total fine of $75,000 in three installments plus an investigation fee of $2,815.60 payable immediately. The order also clarifies that its entry does not preclude the company from pursuing its pending mortgage broker license application, though the company would need a separate consumer loan company license before resuming underwriting activities in Washington. For more information, click here.
On August 7, Connecticut Banking Commissioner Jorge L. Perez issued a consent order against Nelnet Servicing, LLC, doing business as Firstmark Services and Sloan Servicing, a Nebraska-based student loan servicer, resolving allegations that from January 1, 2022, through March 25, 2026 — the date Nelnet finally obtained its Connecticut small loan company license — Nelnet received payments on at least 1,114 small loans made to Connecticut borrowers without holding the required small loan company license, in violation of § 36a-556(a) of the Connecticut General Statutes. Without admitting or denying the allegations, Nelnet agreed to the following terms: a cease-and-desist obligation prohibiting it from receiving payments on small loans in Connecticut without maintaining the required licensure; implementation of due diligence policies and procedures to verify that the owners of small loans it services in Connecticut are either licensed as small loan companies or exempt from licensure, including obtaining written confirmation from creditors, conducting at least annual license verification against public databases such as NMLS Consumer Access, and retaining related records for at least two years after servicing ceases; payment of a $25,000 civil penalty; and payment of $800 in back licensing fees. The commissioner confirmed that upon issuance of the consent order the matter is resolved and no further enforcement action will be taken based on the alleged violations, provided Nelnet complies with the order’s terms, and the order will not affect Nelnet’s ability to obtain or renew licenses in Connecticut so long as all applicable legal requirements are met. For more information, click here.
International Activities:
On August 28, Pablo Hernández de Cos, general manager of the Bank for International Settlements (BIS), delivered a keynote address at the Jackson Hole Economic Symposium examining the monetary properties, macro-financial implications, and policy implications of stablecoins and tokenized deposits as competing paths for modernizing the monetary system. In a complementary address at the same symposium, European Central Bank (ECB) Executive Board Member Isabel Schnabel argued that central banks should go further still — not merely enabling access to central bank money on tokenized platforms, but bringing central bank reserves natively on-chain themselves, drawing on the ECB’s ongoing Pontes and Appia projects as a concrete path toward that goal. Drawing on the foundational properties that make money trustworthy — a common unit of account, singleness of money (meaning all monetary instruments are redeemable at par into central bank money with finality), elasticity of liquidity, interoperability, and financial integrity — de Cos argued that stablecoins in their current form fall materially short of these standards on multiple dimensions. Schnabel reinforced this point, arguing that while stablecoins could in principle be designed to satisfy a safety criterion, no stablecoin issuer possesses the independent capacity to expand liquidity elastically during periods of stress, which she identified as the defining and irreplaceable characteristic of central bank money. By contrast, both speakers argued that tokenized deposits — bank liabilities recorded on programmable platforms with interbank settlement through central bank accounts — preserve the two-tier monetary architecture, maintain singleness through settlement in central bank money, and present a more tractable path to harnessing the efficiency gains of tokenization, including programmability, atomic settlement, and around-the-clock operability, while noting that genuinely interoperable, multi-bank tokenized deposit ecosystems do not yet exist at scale. For more information, click here and here.