This month has brought continued regulatory activity and uncertainty as President Trump advances his agenda. In this month’s Regulatory Update podcast, our experts break down the latest developments in regulation, enforcement, and litigation — helping you stay ahead of the curve.
For a deeper dive into the big-picture trends shaping the industry, don’t miss our Regulatory Expectations and Enforcement webinar.
Here are the highlights:
1071 update
The Fifth Circuit Court of Appeals has temporarily stayed compliance deadlines for the Consumer Financial Protection Bureau’s Section 1071 rule. The stay applies only to the plaintiffs and intervenors in the lawsuit, meaning all other financial institutions must still comply with the rule pending further court action.
Meanwhile, in another court case a federal judge ruled that cash advances are considered credit under the Equal Credit Opportunity Act (ECOA). Lenders that offer these advances to small business must comply with 1071’s reporting requirements.
For the latest 1071 updates, follow our 1071 Update blog post.
CFPB overdraft rule on the chopping block
Lawmakers have introduced a resolution under the Congressional Review Act to overturn the CFPB's overdraft rule, which caps fees at $5 for financial institutions with over $10 billion in assets. Given the changing political landscape and the likely disappearance of the "junk fee" narrative, the rule is expected to be repealed — either through Congressional action or, more likely, future CFPB rulemaking.
FDIC releases crypto-related bank supervision documents
The FDIC has published 175 documents detailing its oversight of banks engaged in cryptocurrency activities. This move follows Acting Chairman Travis Hill’s directive to reevaluate the agency’s supervisory approach and review all communications with banks exploring crypto products or services.
Illinois court: Credit unions still subject to state interchange rule
A federal judge denied a request to extend an injunction against the Illinois Interchange Fee Prohibition Act (IFPA) to credit unions and state-chartered banks but allowed it for out-of-state banks. Set to take effect July 1, 2025, the IFPA bans interchange fees on the tax and gratuity portion of transactions. The court ruled that the Federal Credit Union Act lacks the same preemption protections as the National Bank Act.
Litigation and Enforcement
Here’s a quick rundown of enforcement actions and litigation. For an in-depth look at enforcement actions, check out our monthly Enforcement Actions Roundup.
California fines credit union $100,000 for cyber breach
The California Department of Financial Protection and Innovation (CDFPI) announced a consent order with a California-based credit union following a ransomware attack in June 2024. The attack left 500,000 members without access to online banking for more than two weeks and exposed many members' personally identifiable information (PII). As part of the consent order, the credit union agreed to a $100,000 penalty.
FDIC Fines Utah bank $650,000 for UDAP violations
The FDIC fined a Utah bank $650,000 for deceptive practices, including failing to disclose personal guarantor liability to corporate credit applicants and charging undisclosed fees. The case underscores the need for regular audits to ensure fee disclosures align with actual charges and highlights the importance of compliance with both federal and state consumer protection laws.
FinCEN fines Brink’s $37 million for BSA violations
FinCEN issued a $37 million consent order against Brink’s Global Services for violating the Bank Secrecy Act (BSA), including failing to register as a money services business (MSB) and neglecting to implement an effective anti-money laundering (AML) program. The company facilitated hundreds of millions in bulk currency shipments for high-risk entities without filing suspicious activity reports (SARs). As part of the order, Brink’s must undergo an AML program review.
Massachusetts AG sues Hometap over alleged illegal home equity investments
The Massachusetts Attorney General sued Hometap, alleging that its home equity investment agreements function as unregulated reverse mortgages that lack consumer protections. The lawsuit claims the company undervalued home equity, failed to assess homeowners' ability to repay, and engaged in predatory lending practices. The AG seeks to halt the practices, compensate affected homeowners, and enforce compliance with consumer protection laws. The case highlights the need for institutions offering alternative home equity products to ensure legal compliance, provide clear disclosures, and avoid misleading advertising.
Dive deeper into the trends shaping the financial services industry in our Regulatory Expectations and Enforcement Webinar.
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February Update: CFPB’s flurry of action and a regulatory freeze
January 2024 Regulatory Brief: Section 1071, enforcement actions plus final rules and guidance
