Regulatory Enforcement + Compliance

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On February 11, the National Credit Union Administration (NCUA) released a proposed rule to implement the Guiding and Establishing National Innovation for U.S. Stablecoins Act (the GENIUS Act) for federally insured credit unions (FICUs). Under the proposal, credit unions cannot issue payment stablecoins directly. Instead, only NCUA‑licensed “permitted payment stablecoin issuers” (PPSIs) that are subsidiaries of FICUs would be allowed to issue payment stablecoins, and FICUs would be limited to investing only in PPSIs licensed by the NCUA.

In this episode of The Crypto Exchange, hosts Ethan Ostroff and Genna Garver look back at 2025 — ultimately a pivotal year for digital assets and crypto regulation in the U.S. — drawing on Troutman Pepper Locke’s flagship publication, Financial Services Industry 2025 Digital Assets Year in Review. The report reflects insights from more than 10 of our firm’s practice areas and more than 30 attorneys, offering a comprehensive, cross-practice view of how the regulatory landscape is evolving.

In continuation of increased state efforts to regulate state-chartered banks and fintech partnerships,Oregon’s newly enrolled House Bill (HB) 4116 would enact an express “opt‑out” from a key provision of the Depository Institutions Deregulation and Monetary Control Act of 1980 (DIDMCA) for consumer finance loans made in Oregon. HB 4116 also updates licensing requirements and clarifies when Oregon law applies to remote and online loans. This Oregon development comes on the heels of the Tenth Circuit’s decision in Weiser upholding Colorado’s DIDMCA opt-out and holding that a loan is “made in such State” if either the borrower or lender is located in the opt-out state as discussed here. A petition for rehearing en banc has been filed in Weiser, and it remains unsettled where a loan is “made” for purposes of DIDMCA.

Payward Financial’s Wyoming Special Purpose Depository Institution (SPDI), Kraken Financial, has received a master account from the Federal Reserve Bank of Kansas City, giving it direct access to the Federal Reserve’s core payment infrastructure. The approval, initially for a one-year term, allows Kraken Financial to connect directly to Fedwire and other Fed payment rails, a capability traditionally limited to insured financial institutions. As a general matter, digital assets, fintech and other firms that are not FDIC-insured have generally depended on correspondent banking relationships to move fiat funds over these payment rails.

The New York City Department of Consumer and Worker Protection (NYC DCWP) has adopted a comprehensive set of amendments to its debt collection rules, effective September 1, 2026. The final rule clarifies that New York City’s consumer protection framework applies not only to traditional third‑party debt collectors and debt buyers, but also to original creditors once they engage in defined “debt collection procedures.” It also tightens limits on collection communications, expands validation and verification obligations, and adds targeted protections for medical and time‑barred debt. NYC DCWP will withdraw its prior August 2024 Notice of Adoption and treat this new rule as the governing framework going forward.

On February 23, the New York Department of Financial Services (DFS) issued a proposed new Part 423 to Title 3 of the NYCRR to implement New York Banking Law Article 14‑B for Buy-Now-Pay-Later (BNPL) lenders. The proposal would move BNPL firmly into New York’s credit system, imposing licensing, supervision, disclosure, data privacy, and underwriting requirements on both interest‑free and interest‑bearing BNPL products offered to New York consumers. If adopted, the rule would take effect 180 days after the notice of adoption is published in the State Register, with a short transitional period for existing BNPL providers. DFS is accepting pre-proposal comments through March 5, 2026, after which the proposed rule will be published in the New York state register for a formal 60-day comment period.

Colorado lawmakers are considering legislation that would significantly expand consumer protections around motor vehicle finance and sales. House Bill 26‑1261, introduced on February 19, 2026 and currently pending before the House Business Affairs & Labor Committee, would overhaul repossession timelines for certain “qualified motor vehicles,” restrict use of vehicle-disabling technology, and create a three‑business‑day right to return certain vehicles purchased from dealers.

In this crossover episode, Payments Pros host Keith Barnett teams up with Regulatory Oversight host Stephen Piepgrass to unpack how prediction markets, gaming, and payments intersect in a rapidly evolving and legally uncertain landscape. Drawing on Keith’s extensive regulatory experience, they explain what prediction markets are, why these contracts are treated as swaps rather than securities, and how that distinction affects insider trading issues. Keith and Stephen then address the growing tension between federal regulators and state attorneys general over whether these products are trading or unlicensed sports betting, the CFTC chair’s recent criticism of “regulation by enforcement,” and the NCAA’s push to pause college sports contracts. They close by examining what this means for banks, payment processors, and other service providers navigating know-your-customer and “lawful transaction” obligations while the law remains in flux.

On January 27, the Government Accountability Office (GAO) released a report, Consumer Financial Protection Bureau: Status of Reorganization Efforts (GAO‑26‑108448), that offers a detailed snapshot of the Consumer Financial Protection Bureau’s (CFPB or Bureau) ongoing downsizing and restructuring. This is the first of two GAO reports that focus on the CFPB’s reorganization and its ability to fulfill its statutory functions going forward.

In December 2023, we blogged about lawsuits filed by the Consumer Financial Protection Bureau (CFPB or Bureau), the U.S. Department of Justice (DOJ), and later the State of Texas against Colony Ridge and related entities. The complaints alleged that Colony Ridge targeted Hispanic borrowers with deceptive Spanish‑language marketing, sold largely undeveloped and flood‑prone land, and engaged in predatory financing by steering borrowers into high‑rate, seller‑financed mortgage loans with extremely high foreclosure rates.