To keep you informed of recent activities, below are several of the most significant federal and state events that have influenced the Consumer Financial Services industry over the past week.
Federal Activities
State Activities
Federal Activities:
On September 10, Comptroller of the Currency Jonathan Gould addressed the Financial Stability Oversight Council, emphasizing the need to reset the risk tolerance within the federal banking system to foster economic growth and financial stability. Gould criticized the post-2008 regulatory framework for its risk-averse approach, which led to stagnation and weakened the banking sector. He outlined plans to elevate the Office of the Comptroller of the Currency’s (OCC) chartering and licensing functions, simplify capital and liquidity regulations, and tailor supervision to focus on material financial risks, particularly for community banks. Gould’s remarks highlighted the OCC’s commitment to revising outdated practices and collaborating with other agencies to support President Donald Trump’s vision for a dynamic and resilient financial services system. For more information, click here.
On September 10, the U.S. Senate Committee on Banking, Housing, and Urban Affairs convened a hearing to discuss deposit insurance reform, underscoring its critical role in maintaining consumer and business confidence in the U.S. banking system. Chairman Tim Scott highlighted the centrality of deposit insurance to public trust in banks, cautioning against hasty reform decisions. Ranking Member Elizabeth Warren advocated for increasing the deposit insurance limit for business transaction accounts, arguing that the current $250,000 cap is inadequate for many small and mid-sized businesses. Warren proposed reform principles to simplify administration by the Federal Deposit Insurance Corporation (FDIC) and NCUA, enhance understanding for small businesses, and facilitate implementation by banks. For more information, click here.
On September 9, U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) Director Andrea Gacki testified before the U.S. House Committee on Financial Services, emphasizing FinCEN’s commitment to combating illicit financial activity. She outlined FinCEN’s priorities, including efforts to counter drug cartels, impose pressure on Iran and Cuba, and combat child exploitation and fraud. Gacki highlighted FinCEN’s use of the Bank Secrecy Act and other tools to address these threats and discussed initiatives to modernize the AML/CFT regime to reduce compliance burdens while focusing on high-risk areas. She also underscored FinCEN’s dedication to promoting responsible digital asset growth and implementing the GENIUS Act to enhance financial security. For more information, click here.
On September 9, Democratic senators unveiled a framework for market structure legislation aimed at regulating the burgeoning $4 trillion digital asset sector. The proposal, supported by senators, including Ruben Gallego, Mark Warner, and Kirsten Gillibrand, seeks to establish clear regulatory guidelines to protect consumers and ensure responsible innovation in the U.S. digital asset markets. The framework outlines seven key pillars, such as closing gaps in the spot market for non-security digital assets, clarifying legal statuses, and preventing illicit finance. It aims to foster bipartisan collaboration, although Senator Elizabeth Warren is notably absent from the initiative. The framework aspires to create a safe and level playing field for all market participants, with the hope of guiding robust bipartisan negotiations. For more information, click here.
On September 9, the Department of Housing and Urban Development (HUD) announced changes to the interest rates on debentures issued for loans or mortgages insured by the Federal Housing Administration under the National Housing Act. For the six-month period starting July 1, 2025, debentures issued under § 221(g)(4) will bear an interest rate of 4 3/8%, while those issued under other provisions will have a rate of 4 5/8%, determined by the higher rate at the time of insurance commitment or endorsement. These adjustments, approved by the secretary of the Treasury, aim to align debenture rates with the statutory formula based on Treasury obligations, ensuring consistency and reliability in mortgage insurance programs. For more information, click here.
On September 9, the OCC announced the elevation and renaming of its chartering and licensing function, appointing Stephen Lybarger as senior deputy comptroller for chartering, organization, and structure. Gould emphasized the strategic importance of these functions in adapting to rapid innovations in banking, supporting the formation of new banks, and licensing payment stablecoin issuers. Lybarger, with extensive experience since joining the OCC in 1984, will oversee the licensing process for national banks and other entities, ensuring timely and appropriate evaluations. His role will involve coordination with various OCC offices to maintain a safe and sound national banking system. For more information, click here.
On September 8, the OCC took significant action to “depoliticize” the federal banking system by issuing two bulletins to banks that further the goals of Executive Order 14331 “Guaranteeing Free Banking for All Americans.” The OCC’s press release announcing the bulletins explains that they are aimed at eliminating politicized or unlawful debanking practices and ensuring that banks provide access to financial services based on objective, risk-based analyses rather than political or religious beliefs. Bulletin 2025-22 clarifies how politicized or unlawful debanking will be assessed in licensing applications and Community Reinvestment Act performance evaluations. Bulletin 2025-23 reminds banks of their legal obligations under the Right to Financial Privacy Act to protect customer financial records and ensure proper use of Suspicious Activity Reports. For more information, click here.
On September 8, Nasdaq took a significant step toward revolutionizing the trading landscape by filing with the U.S. Securities and Exchange Commission (SEC) to enable trading of tokenized securities listed on its exchange starting in 2026. This move, if approved, will allow securities to be traded in both traditional and tokenized forms, leveraging blockchain technology to enhance market accessibility and efficiency. Nasdaq’s proposed rules aim to integrate tokenized securities seamlessly with their traditional counterparts on the same Order Book, ensuring equal execution priority. The tokenized securities must be fungible with traditional shares, share the same CUSIP number, and provide shareholders with identical rights and privileges. This initiative specifically involves using The Depository Trust & Clearing Corporation for clearing and settling trades in token form, while Nasdaq explores additional solutions for tokenization and trading. For more information, click here.
On September 8, the Federal Deposit Insurance Corporation (FDIC) announced updates to its Formal and Informal Enforcement Actions Manual, specifically regarding the termination standards for cease-and-desist and consent orders under § 8(b) of the Federal Deposit Insurance Act. These updates aim to provide clearer guidance for FDIC staff involved in enforcement actions across various offices. The revised policy allows for greater discretion in terminating orders, considering factors such as substantial compliance by the insured depository institution, the irrelevance of the order to current circumstances, or the issuance of new formal actions due to deterioration. This update applies to all FDIC-supervised financial institutions, reflecting the agency’s commitment to adapting its enforcement strategies to better support the banking sector’s stability and compliance. For more information, click here.
On September 8, FinCEN reissued a modified Geographic Targeting Order (GTO) aimed at combating illicit cartel activities and money laundering along the southwest border of the U.S. The updated GTO mandates certain money services businesses to file currency transaction reports for cash transactions ranging from $1,000 to $10,000 in designated counties and ZIP codes across Arizona, California, and Texas. This initiative, effective from September 10, 2025, to March 6, 2026, seeks to enhance law enforcement’s ability to investigate and disrupt powerful illicit networks while minimizing burdens on legitimate businesses. For more information, click here.
On September 8, FinCEN issued a notice to assist financial institutions in detecting and disrupting financially motivated sextortion schemes. These schemes, which have seen a dramatic increase, particularly target minors, especially boys aged 14 to 17, by coercing them into sending explicit content under threat of exposure. The notice highlights the use of generative AI tools by perpetrators to create realistic, manipulated images, exacerbating the issue. FinCEN emphasizes the importance of financial institutions reporting suspicious activities through suspicious activity reports to aid law enforcement in combating these abusive practices and protecting victims. For more information, click here.
On September 5, Trump signed into law the Homebuyers Privacy Protection Act (HPPA) (H.R. 2808). This bipartisan legislation aims to safeguard homebuyers’ personal financial information. A key concern of the HPPA is the issue of “trigger leads.” These occur when a prospective homebuyer applies for a mortgage, which subsequently triggers the sale of their personal information to other lenders without their explicit consent. The HPPA prohibits a consumer reporting agency from furnishing a trigger lead unless an individual chooses to opt-in and, even then, only certain approved groups will be notified that an individual is seeking a new mortgage. For more information, click here.
On September 5, the SEC announced the formation of a Cross-Border Task Force. This initiative aims to enhance the Division of Enforcement’s capabilities in identifying and combating cross-border fraud that adversely affects U.S. investors. As global markets become increasingly interconnected, the SEC’s proactive approach underscores its commitment to safeguarding the integrity of U.S. capital markets. The Cross-Border Task Force will initially concentrate on investigating potential violations of U.S. federal securities laws by foreign-based companies. Particular attention will be given to market manipulation schemes such as “pump-and-dump” and “ramp-and-dump,” which can significantly harm investors. Additionally, the task force will scrutinize the role of gatekeepers, including auditors and underwriters, who facilitate these companies’ access to U.S. capital markets. For more information, click here.
State Activities:
On September 12, California lawmakers sent SB 53, a significant AI safety bill, to Governor Gavin Newsom’s desk for approval. This landmark legislation, known as the Transparency in Frontier Artificial Intelligence Act, mandates large AI developers to implement transparency and accountability measures, including publishing safety frameworks and disclosing risk testing. It also introduces whistleblower protections and establishes CalCompute, a state-backed cloud consortium for AI research. The bill aims to balance innovation with safety, but has sparked debate among tech industry groups. Newsom has until the end of the month to decide on the bill. For more information, click here.
On September 9, the Massachusetts attorney general’s (AG) office filed a lawsuit against The BoaVida Group, a California-based investment firm, for allegedly engaging in unfair and retaliatory rent increases at Willow Terrace Mobile Home Park. The lawsuit claims BoaVida unlawfully raised rents multiple times since acquiring the property in 2022, without offering the required five-year leases, and retaliated against residents who reported these violations by terminating their tenancies and imposing a substantial rent hike. The AG seeks court intervention to enforce compliance with the Manufactured Housing Act and demands restitution and civil penalties. For more information, click here.
On September 9, the California Privacy Protection Agency, in collaboration with the AGs of California, Colorado, and Connecticut, announced a joint investigative sweep targeting businesses that may be noncompliant with the Global Privacy Control. This browser setting allows consumers to opt-out of the sale or sharing of their personal information. The coordinated effort aims to ensure businesses honor consumers’ privacy rights as mandated by law. California AG Rob Bonta emphasized the importance of consumer control over personal data, while Connecticut AG William Tong highlighted the non-negotiable nature of respecting consumer privacy. For more information, click here.
On September 8, Washington, D.C.’s AG Brian Schwalb filed a lawsuit against Athena Bitcoin, Inc., a major operator of Bitcoin Automated Teller Machines (BTMs), for exploiting district residents through undisclosed fees and inadequate anti-fraud measures. The lawsuit alleges that 93% of deposits to Athena’s BTMs are linked to scams targeting vulnerable and elderly users, with Athena profiting from hidden fees and enforcing a strict “no refunds” policy. The investigation revealed that Athena’s machines are frequently used by scammers, with victims’ median age being 71 and significant financial losses reported. The AG’s office seeks to compel Athena to comply with district laws, secure restitution for victims, and impose penalties. For more information, click here.
On September 5, the New York State Department of Financial Services (DFS) issued a Request for Information (RFI) to New York State chartered banks, credit unions, and other stakeholders regarding consumer accounts, fees, and regulatory compliance costs. This follows DFS’s earlier draft regulations aimed at prohibiting harmful overdraft practices and enhancing customer communications. The RFI seeks detailed data to substantiate claims made by banking organizations that the proposed regulations could be costly or limit overdraft protections. Responses, due by October 20, 2025, are voluntary but crucial for DFS to analyze the impact of these regulations. DFS assures confidentiality for sensitive information and encourages precise, numerical responses to better inform the regulatory process. For more information, click here.