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 April 17, the Office of the Comptroller of the Currency (OCC), Board of Governors of the Federal Reserve System (Federal Reserve), and Federal Deposit Insurance Corporation (FDIC) (collectively, the federal agencies) issued revised interagency guidance on model risk management. The guidance updates and consolidates supervisory expectations for how banks manage the growing use of models across their businesses and effectively manage those risks, while rescinding prior guidance issued by each agency. The updated guidance is principles-based and risk-based, rather than prescriptive, and the federal banking agencies emphasize that model risk management should be tailored to a bank’s model risk profile, as well as the size and complexity of its operations. The agencies further state that noncompliance with the guidance itself will not, standing alone, result in supervisory criticism. That said, weak model risk management can still lead to findings of unsafe or unsound practices or violations of law. For more information, click here.
On April 16, the U.S. House Committee on Agriculture held a full committee hearing “For the Purpose of Receiving Testimony from the Honorable Michael S. Selig, Chairman, U.S. Commodity Futures Trading Commission (CFTC),” where Chairman Glenn “GT” Thompson used his opening statement to frame the CFTC’s dual mandate to promote “responsible innovation” while maintaining principles‑based oversight of commodity markets amid rapid changes in derivatives and financial markets. Thompson highlighted emerging challenges for the CFTC, including digital assets and blockchains, growing retail participation, integrated business models, and the need for regulatory harmonization, and he focused particular attention on prediction markets — acknowledging the CFTC’s broad jurisdiction under the Commodity Exchange Act while questioning which event contracts are appropriate for public trading and how the CFTC should use its existing tools and new rulemakings in this area. He emphasized that the hearing was a key step in assessing whether gaps in the CFTC’s authority require legislative action and signaled that the committee would also probe Selig’s broader agenda for agency operations, enforcement priorities, and reauthorization. For more information, click here.
On April 16, the Consumer Financial Protection Bureau (CFPB) notified the Office of Management and Budget (OMB) that its reconsideration of the Section 1071 small business lending data collection rule has been submitted as a final rule for Executive Order 12866 regulatory review (RIN 3170‑AB40). This step signals that the CFPB is moving toward issuing a revised 1071 framework, notwithstanding ongoing funding constraints. As we noted in our prior post, after extending the compliance dates for the 2023 final 1071 rule and issuing a November 13, 2025, notice of proposed rulemaking, the CFPB also advised courts that it was working on an interim final rule to reset the regime in light of litigation and operational issues. OMB review of the “Small Business Lending Data Collection Under the Equal Credit Opportunity Act Reconsideration” is the next procedural step before a new or revised 1071 rule is published in the Federal Register, and we expect it to clarify compliance timelines and potentially narrow or recalibrate aspects of the original data collection and reporting requirements. For more information, click here and here.
On April 16, Judge Stanley Blumenfeld, Jr. of the U.S. District Court for the Central District of California granted in part Caitlyn Jenner’s motion to dismiss a putative class action brought by investor Lee Greenfield over losses in the $JENNER cryptocurrency, holding that the Ethereum-based $JENNER “memecoin” is not a security under the Securities Act because Greenfield failed to plausibly allege a common enterprise under Howey. Although Greenfield claimed more than $40,000 in losses and argued that Jenner’s promotion and a 3% transaction tax created horizontal or vertical commonality, the court found no pooling of investor funds into a broader venture and no linkage between investor fortunes and Jenner’s, who earned transaction fees regardless of investor gains or losses. Having already afforded Greenfield “one more shot” to amend after dismissing an earlier complaint, the court dismissed the federal unregistered securities claim with prejudice and declined to grant further leave to amend, then declined supplemental jurisdiction over the remaining California common-law fraud and quasi-contract claims, dismissing those state-law claims without prejudice to refiling in state court. For more information, click here.
On April 14, the U.S. Department of Justice (DOJ) announced a settlement requiring ADT LLC, doing business as ADT Security Services, to pay more than $1.3 million to resolve allegations that it violated the Servicemembers Civil Relief Act (SCRA) by unlawfully charging at least 3,400 servicemembers who cancelled home security contracts after receiving military relocation orders. DOJ alleged that ADT imposed a 30‑day notice requirement and collected fees beyond the current billing period, despite the SCRA’s clear protection allowing servicemembers to terminate certain consumer contracts at any time after receiving qualifying orders without penalty beyond the current billing cycle. Under the settlement, ADT will provide up to $1,260,000 in compensation to affected servicemembers, pay a $79,380 civil penalty (the maximum for a first SCRA violation), and implement policy and training changes to prevent future violations. The case is part of DOJ’s broader SCRA enforcement program, which since 2011 has secured hundreds of millions of dollars in relief for servicemembers. For more information, click here.
On April 14, the OCC submitted an economically significant interim final rule titled “National Bank Non-Interest Charges and Fees” (RIN 1557‑AF54) to the OMB for review under Executive Order 12866, signaling that the agency is moving to clarify and potentially recalibrate the framework governing national banks’ ability to impose and structure noninterest charges and fees. As we discussed in our prior blog post on the Illinois Interchange Fee Prohibition Act (IFPA), the OCC has taken an aggressive posture in defending national banks’ authority under the National Bank Act, arguing in its amicus brief that state‑level restrictions on interchange fees and related data-use limits would significantly interfere with federally authorized powers and fragment the national payments system. The forthcoming OCC interim final rule on noninterest charges and fees should be viewed against that backdrop, and may be designed in part to reinforce the scope of national bank authority and preemption principles in the face of emerging state efforts to regulate fees and payment card economics. For more information, click here and here.
On April 13, the U.S. Securities and Exchange Commission’s (SEC) Division of Trading and Markets issued a staff statement explaining when providers of certain crypto trading user interfaces can operate without registering as broker-dealers under Section 15(a) of the Exchange Act. The statement addresses “Covered User Interface Providers” whose web, app, or wallet-embedded interfaces help users prepare and route self-directed transactions in crypto asset securities, and outlines detailed conditions under which staff will not object if they are not broker‑dealer registered, such as allowing users to set their own trading parameters, limiting compensation to fixed, product‑ and venue‑agnostic fees, avoiding solicitation or recommendations, using objective, predisclosed routing logic, and providing full disclosures about conflicts, fees, cybersecurity, and affiliations with trading venues. The relief is expressly interim and will be deemed withdrawn five years from April 13, 2026, absent further SEC action, and the staff invited public comment under File No. 4‑894. For more information, click here.
On April 8, Fannie Mae issued Lender Letter LL‑2026‑04 establishing a governance framework for single‑family seller/servicers’ use of artificial intelligence (AI) and machine learning (ML) in loan origination and servicing, effective 120 days from publication. The letter makes clear that any AI/ML used in connection with loans sold to or serviced for Fannie Mae must comply with applicable law and the lender contract and must be supported by documented policies and procedures governing development, implementation, use, maintenance, and risk management. Those policies must be transparent to relevant staff, incorporate principles of trustworthy and ethical AI/ML, reflect legal and regulatory requirements and the lender’s risk tolerance, and be owned, maintained, and reviewed at least annually. Seller/servicers also must comply with Fannie Mae’s Information Security and Business Resiliency Supplement, ensure that vendors’ and subcontractors’ use of AI/ML is governed by protections no weaker than their own, and, upon request, be prepared to promptly describe to Fannie Mae the types and purposes of AI/ML in use, how it is deployed, and the safeguards in place to mitigate associated risks. For more information, click here.
On April 7, the National Credit Union Administration (NCUA) announced the ninth round of proposals under its ongoing Deregulation Project and issued a notice of proposed rulemaking focused on chartering and field-of-membership eligibility. The proposal would amend 12 C.F.R. § 701, Appendix B to remove the automatic disqualification of associational groups that require members to purchase a product or service as a condition of membership, allowing NCUA instead to conduct a more holistic evaluation of such groups. NCUA explains that this change is intended to eliminate an unduly burdensome requirement and provide regulatory relief to both single associational and multiple common bond federal credit unions of all sizes seeking to include associations with a customer-client component in their fields of membership. NCUA is encouraging stakeholders to review the proposal and submit comments through the Federal Rulemaking Portal. For more information, click here.
On April 7, Kiosko Multiservicios LLC, a small Arizona money services business (MSB), filed suit in the U.S. District Court for the District of Arizona against the Financial Crimes Enforcement Network (FinCEN), the U.S. Department of the Treasury, and the acting attorney general challenging FinCEN’s March 10, 2026, Geographic Targeting Order (GTO) that requires MSBs in certain Southwest border counties, including Maricopa County, to file currency transaction reports (CTRs) on all cash transactions of $1,000 or more. The complaint alleges that the “Border GTO” transforms a narrow anti-money laundering tool into a sweeping surveillance regime that dramatically lowers the usual $10,000 CTR threshold without individualized suspicion, imposes crushing compliance burdens on small MSBs, and drives customers to untargeted competitors and banks. Kiosko asserts claims under the Administrative Procedures Act, the Fourth and Fifth Amendments, and the “major questions” doctrine, contending that the order operates as a general warrant, compels self-incriminating reporting, exceeds FinCEN’s statutory authority under 31 U.S.C. § 5326, is arbitrary and capricious in its geographic scope and $1,000 threshold, and was issued without required notice-and-comment procedures. The complaint seeks to vacate and enjoin the Border GTO and to bar enforcement of its expanded reporting obligations. For more information, click here.
State Activities:
On April 18, New York’s new statewide ban on employment credit checks took effect, amending the General Business Law to make it an unlawful discriminatory practice for most employers, labor organizations, and employment agencies to request or use an applicant’s or employee’s consumer credit history in hiring, compensation, or other employment decisions. The law broadly defines “consumer credit history” to include not only credit reports and scores, but also information obtained directly from the individual, such as late payments, collections, bankruptcies, judgments, and liens, and applies at both the application and employment stages. Narrow exceptions permit credit checks where required by state or federal law or securities self-regulatory organizations, for certain law enforcement and high‑trust positions, bonded or security‑cleared roles, specified trade secret and national security functions, and positions with significant financial or digital security authority. The statute also limits state and municipal licensing agencies’ use of credit history and restricts background screeners from furnishing credit information for New York employment purposes absent a qualifying exception, and it does not preempt more protective local laws such as New York City’s existing credit‑check restrictions. For more information, click here.
On April 17, Illinois Attorney General Kwame Raoul led a coalition of 23 state attorneys general in a letter urging the CFPB to scale back a proposed strategic plan they say would “decimate” the agency’s enforcement and supervision capacity by slashing staffing, particularly in its Office of Supervision Policy and Operations, and effectively abandoning core, statutorily mandated oversight of financial institutions. The letter to Acting Director Russell Vought argues that, as the only federal agency whose exclusive mission is financial consumer protection, the CFPB must maintain robust supervision and enforcement to protect consumers and ensure fair competition in the marketplace, noting that its work has produced more than $21 billion in consumer relief since the 2008 financial crisis. Raoul and the multistate coalition contend that the proposed “realignment” and elimination of “non-essential” roles, coupled with a deregulatory focus and an emphasis on avoiding “duplicative enforcement,” will leave more enforcement burden to the states, reduce recoveries for consumers at a time of high fraud rates, and undermine the longstanding state–CFPB partnership that Congress envisioned when it created the CFPB. For more information, click here.
On April 14, Maryland Governor Wes Moore approved Senate Bill 784, which repeals a prior provision of the Financial Institutions Article that broadly exempted persons who merely acquire or are assigned mortgages, mortgage loans, or installment loans (and do not otherwise originate or service such loans) from the state’s licensing requirements for consumer credit providers. By eliminating former § 11‑102 and stating that the change is a “clarifying corrective measure” to undo an error in the 2025 legislation, the new law restores the applicability of Maryland’s licensing regime to passive loan acquirers and assignees, effective July 1, 2026. For more information, click here.
On April 13, Tennessee Governor Bill Lee signed HB 2505, enacting a new prohibition on virtual currency kiosks in the state effective July 1, 2026. The law adds a new part to Title 45, Chapter 16 defining “virtual currency,” “virtual currency kiosk,” and “virtual currency kiosk operator,” and makes it a Class A misdemeanor for any operator or other person to knowingly install, allow the installation of, permit, place, or otherwise operate a virtual currency kiosk in Tennessee. The prohibition applies broadly to individuals or entities that own, manage, or control electronic terminals used to exchange virtual currency for money, bank credit, or other virtual currency, or that knowingly permit such kiosks to be located on property they own, lease, or control. For more information, click here.
On April 13, Washington Attorney General Nick Brown announced that Renton Collections Inc. will provide $1.5 million in medical debt relief to settle a lawsuit alleging the agency failed to inform roughly 400,000 Washingtonians of their right to request detailed information about their medical debts, including itemized statements and charity-care eligibility. Under a consent decree filed in King County Superior Court, Renton Collections is permanently barred from collecting any fees, costs, or interest on the medical debts at issue, and must include statutorily required disclosures about consumers’ rights in all future medical debt collection notices. For more information, click here.
On April 13, Virginia Governor Abigail Spanberger signed SB 693 (Chapter 902), which, effective July 1, 2026, prohibits motor vehicle insurers from refusing to insure, refusing to renew, limiting coverage, or charging a different rate for the same auto insurance coverage solely on the basis of an individual’s consumer credit information or credit-based insurance score. The new law also directs the State Corporation Commission’s Bureau of Insurance to study insurers’ use of credit information and credit-based insurance scores in underwriting auto policies and to report its findings and recommendations to the General Assembly by October 1, 2027. For more information, click here.