On June 10, President Trump sent to the Senate his nomination of Brian Johnson to serve as Director of the Consumer Financial Protection Bureau (CFPB or Bureau) for a five-year term.The CFPB has been without a confirmed, full-time director since former Director Rohit Chopra was fired on February 1, 2025 (discussed here).
Federal regulators recently took two coordinated steps that significantly shift expectations for how lenders and banks treat non‑work authorized individuals and their employers. On June 5, the Consumer Financial Protection Bureau (CFPB or Bureau) issued a formal statement on how immigration status should factor into ability‑to‑repay determinations under the Truth in Lending Act (TILA) and Regulation Z. On the same day, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN), jointly with the federal banking agencies and in coordination with the Internal Revenue Service (IRS), released a detailed advisory on fraud, payroll schemes, and money laundering risks associated with the unlawful employment of non-work authorized persons, including specific guidance regarding the use of Individual Taxpayer Identification Numbers (ITINs) and Suspicious Activity Reports (SARs).
On June 2, the Federal Deposit Insurance Corporation (FDIC), Office of the Comptroller of the Currency (OCC), and Federal Reserve Board (FRB) jointly announced another step in their effort to eliminate “reputation risk” from the federal banking supervisory framework, an effort prompted by Executive Order 14331 (Guaranteeing Fair Banking for All Americans). The agencies updated a broad set of interagency documents to remove references to “reputation risk” and, in some cases, “reputation,” reinforcing their earlier decision to stop using reputation risk as a basis for examination findings or exerting supervisory pressure on financial institutions to avoid or exit certain banking relationships.
On May 19, President Donald Trump issued Executive Order 14406, “Restoring Integrity to America’s Financial System,” which establishes a new policy to safeguard financial institutions against structural credit risks and deter fraud and abuse. The order links illicit finance, immigration enforcement, and consumer credit risk, and directs federal financial regulators to tighten risk-based controls around non-work authorized populations and their employers. It reflects a policy view that even basic financial services, when offered without robust know-your-customer and due diligence, can facilitate terrorist financing, narcotics and human trafficking, and large-scale money laundering. At the same time, it expresses concern that lending to borrowers who lack work authorization or face a high risk of deportation may undermine safety and soundness because of heightened “ability-to-repay” concerns.
On May 27, the National Fair Housing Alliance (NFHA), Rise Economy (formerly known as the California Reinvestment Coalition), and two fair lending compliance companies (BLDS, LLC, and SolasAI) filed suit in the U.S. District Court for the District of Columbia challenging the Consumer Financial Protection Bureau’s (CFPB or Bureau) Regulation B (Subpart A) final rule, which implements the Equal Credit Opportunity Act (ECOA), and was issued on April 22, 2026. The case, National Fair Housing Alliance et al. v. CFPB et al., is notable not only for challenging the CFPB’s significant rewrite of longstanding Reg B, but also because the NFHA and Rise Economy are the first consumer advocacy organizations to sue the CFPB over the final rule.
In this episode of The Consumer Finance Podcast, Chris Willis, Lori Sommerfield, Taylor Gess, and Lane Page discuss the CFPB’s sweeping final amendments to Subpart A of Regulation B. The group unpacks the elimination of the disparate impact legal theory from ECOA, the narrowing of the discouragement standard (including what it means for targeted advertising), and the significant new limits on special purpose credit programs (SPCPs). They also explore expected litigation challenges, the continuing role of the Fair Housing Act and state laws in bringing cases under the disparate impact theory, and the practical steps lenders should be taking now to reassess fair lending testing, SPCP design, and redlining risk in light of the final rule.
Yesterday, President Trump signed an Executive Order titled “Integrating Financial Technology Innovation into Regulatory Frameworks.” The Order directs federal financial regulators to review and streamline regulations, guidance, supervisory practices, and application processes that may impede financial technology (fintech) innovation and competition, and it asks the Federal Reserve to evaluate potential direct access to Reserve Bank accounts and services for uninsured depository institutions and certain non‑bank financial firms, including digital asset companies. The Order is the latest in a series of administration actions aimed at positioning the U.S. as a global leader in digital assets and financial technology.
On May 15, the Office of the Comptroller of the Currency (OCC) finalized two closely linked rules on mortgage escrow accounts that respond directly to the issues we discussed in our recent post, Second Circuit on Remand in Cantero: New York Escrow-Interest Law Is Preempted, Over a Vigorous Dissent. In that decision, the Second Circuit held that New York’s 2% interest‑on‑escrow statute is preempted as applied to national banks under the Barnett Bank standard, deepening a circuit split with the First and Ninth Circuits. The OCC’s new rules both adopt the Second Circuit’s view of the underlying bank powers and attempt to bring regulatory clarity to the interest‑on‑escrow preemption question for OCC‑regulated institutions nationwide.
Yesterday, California Governor Gavin Newsom announced the appointment of Rohit Chopra, former Director of the Consumer Financial Protection Bureau (CFPB) and former Federal Trade Commission (FTC) Commissioner, as Secretary of the state’s new Business and Consumer Services Agency (BCSA). The new cabinet‑level agency, which formally launches on July 1, 2026, is designed to consolidate and elevate state‑level consumer and market oversight at a moment when federal enforcement is being scaled back. Governor Newsom framed the move as bringing “one of the nation’s most prominent consumer protection leaders” into state government to crack down on corporate abuse, curb junk fees, and lower costs for Californians.
On May 5, Craig Trainor, Assistant Secretary for the Office of Fair Housing and Equal Opportunity (FHEO) at the U.S. Department of Housing and Urban Development (HUD), used the American Bankers Association’s Risk and Compliance Conference to send a clear message about how the Trump administration plans to enforce the Fair Housing Act (FHA) going forward, including with respect to how it will treat special purpose credit programs (SPCPs).