A new year brings a new presidential administration — and plenty of regulatory compliance updates.
The Ncontracts Regulatory Update podcast led by Ncontracts’ team of in-house compliance experts is here to break it all down, helping you navigate what’s changing, what’s staying the same, and what should be on your radar in the months ahead. Read on for highlights from the podcast.
With President Trump sworn in, banking agency heads like those at the FDIC and CFPB have resigned, and replacements made. As expected, the administration issued a regulatory freeze, halting new rules, delaying implementation of pending regulations, and requiring agency review before moving forward. While independent banking regulators aren’t always bound by these freezes, they typically comply, offering a short break from regulatory change.
Now is the perfect time to reassess your strategic plan and compliance program to prepare for what’s next. Use this window to shore up your approach to finalized regulations, such as 1071, which were in place before the window began for disapproval under the Congressional Review Act. This lull won’t last forever, so taking proactive steps now will ensure you’re ready for the next wave of regulatory developments.
The Consumer Financial Protection Bureau (CFPB) released its Supervisory Highlights, revealing areas of examiner interest. The CFPB found unfair practices in overdraft, NSF fees, and stop payment requests for debit cards; violations of the Fair Credit Reporting Act (FCRA), including insufficient policies and failure to investigate disputes; buy now, pay later (BNPL) and paycheck advances violating the Consumer Financial Protection Act’s UDAAP rule; and weak technology controls. A separate special edition focused on student lending violations related to student loan refinancing, private lending and servicing, debt collection, and federal loan servicing.
The CFPB finalized amendments to Regulation V, eliminating an exception that allowed creditors to consider medical debt in credit decisions. This may require adjustments to automated underwriting systems and creditworthiness assessments. However, there’s a lawsuit challenging the rule, arguing the CFPB exceeded its authority under the Fair Credit Reporting Act. The rule could face Congressional Review Act scrutiny and potential rollback.
Another CFPB action that may be retracted by the new administration is the CFPB's proposed EFTA interpretive rule, which seeks to expand Electronic Fund Transfer Act (EFTA) protections to digital payment methods, including cryptocurrencies, stablecoins, and digital reward points. This would require businesses facilitating these transactions—such as crypto exchanges and digital gaming platforms—to comply with Regulation E, covering error resolution procedures and disclosures. The rule accomplishes this by broadly defining "funds" to include both fiat currency and digital assets that function like money.
The CFPB issued a final rule limiting overdraft fees for large financial institutions ($10B+ in assets) to a breakeven amount—either actual costs or a $5 benchmark—with higher fees triggering Regulation Z disclosure requirements. While smaller institutions remain unaffected, the CFPB may revisit this. The rule is already facing a legal challenge from industry groups arguing the agency overstepped its authority. Meanwhile, the CFPB withdrew its proposed NSF rule, opting for a broader review under new leadership.
A mortgage company is in hot water for alleged redlining. The company allegedly situated offices and marketed exclusively in predominantly white neighborhoods, discouraging applications from majority-Black and Hispanic communities. The CFPB claims this violated the Equal Credit Opportunity Act (ECOA) and seeks a five-year ban on mortgage lending and $1.5 million in penalties.
The CFPB also took action against Rocket Homes for allegedly steering homebuyers to Rocket Mortgage and its affiliate through illegal kickbacks to real estate brokerages. The CFPB claims agents were incentivized to refer clients, violating RESPA.
The CFPB filed a lawsuit against Capital One, alleging the bank misled consumers by freezing interest rates on its 360 Savings accounts while offering a new 360 Performance Savings account with significantly higher rates—without notifying existing customers.
Additionally, the CFPB is suing Bank of America, JPMorgan Chase, and Wells Fargo, alleging they failed to protect consumers from fraud on Zelle, leading to $870 million in losses. The lawsuit claims the banks lacked proper identity verification, allowed fraudsters to move between institutions, and violated Reg E by denying consumers legally required reimbursements.
The Bureau is also suing Comerica Bank for illegally mistreating 3.4 million cardholders, primarily unbanked federal benefit recipients. The lawsuit claims Comerica and its vendors dropped 24 million customer service calls, illegally charged ATM fees, mishandled fraud complaints, and failed to investigate errors.
The Supreme Court stayed the nationwide injunction blocking enforcement of the Corporate Transparency Act (CTA), but FinCEN has stated that Beneficial Ownership Information (BOI) reporting remains voluntary due to another ongoing case. The Fifth Circuit will hear arguments on the CTA’s constitutionality on March 25, 2025. While BOI reporting doesn’t directly impact financial institutions, FinCEN’s upcoming CDD Rule revisions—expected in April—could require FIs to verify BOI data against the new database. If the CTA stands, the final rule would be due by early/mid-2026.
The National Credit Union Administration (NCUA) released its 2025 Supervisory Priorities highlighting areas of examiner interest in early January. Priorities include overdraft programs, fair lending, Home Mortgage Disclosure Act (HMDA) data collection, Military Lending Act compliance, payments and error resolution (Electronic Fund Transfer Act and Regulation E), cybersecurity, and financial risk management.
Additionally, new NCUA Chairman Kyle S. Hauptman says he’s interested in promoting AI adoption, ending regulation by guidance, and allowing credit unions to assess their own climate risks. He’s also eager to review overdraft policies, ease BSA compliance burdens, and ensure policies don’t deter service to low-income areas.
The NCUA issued guidance and a report on fees that are UDAAP risks, including APSN fees, multiple NSF representments, and returned deposited item fees. It also identified risky practices like high/no daily fee limits, misleading disclosures, and transaction reordering to maximize fees. NCUA’s report warns that reliance on overdraft and NSF fee income poses concentration risk, raising potential safety and soundness concerns for credit unions.
Recent anti-money laundering/countering the financing of terrorism (AML/CFT) enforcement actions hit investment advisers and broker-dealers hard, highlighting serious compliance failures. One firm failed to properly verify customer identities and close high-risk accounts despite its own policies. Another misled investors by claiming voluntary AML compliance without following through. A third delayed suspicious activity report (SAR filings).
Keeping up with constant regulatory changes is overwhelming—but the right tools can make it manageable. Download our Compliance Management Software Buyers’ Guide for tips on finding the best solution.