As Goodwin predicted in our previous year in review, the enforcement and regulatory activity in the consumer finance space was frenzied in 2024, reaching a fever pitch postelection. From January 1, 2024, through the inauguration of President Trump on January 20, 2025 — and perhaps in anticipation of what was to come with the looming change in administration — the industry experienced an onslaught of regulatory and enforcement activity unmatched since the Obama administration. The Biden administration and its appointees — most notably, former Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra — did their best to make good on their promises to reshape the industry writ large and only quickened the pace after President Biden lost reelection.
On the enforcement front, 2024 saw the CFPB take action on investigations that had been pending since the end of President Trump’s first term and attempt to wrap up examinations and investigations that were initiated by the CFPB shortly after Director Chopra took office in October 2021. Though the number of public enforcement actions might suggest otherwise, based on Goodwin’s anecdotal experience, many CFPB-initiated investigations were closed in 2024 with no action taken. Federal agencies also released a slew of new regulations and finalized previously proposed ones reflecting key priorities of the Biden administration and Director Chopra. Much of the CFPB’s effort was united by a common theme: Director Chopra’s campaign against so-called junk fees. Artificial intelligence (AI) also captured the interest of the consumer finance regulators in 2024. In October 2024, five federal agencies — including the CFPB — issued a rule regulating the use of algorithms and AI in home appraisals and valuations.
If the industry believed that the results of the November 5, 2024, election would chasten the CFPB, it was sorely disappointed. Rather than pump the breaks on regulations and enforcement — and with the constitutional challenge to its funding mechanism in the rearview mirror — the CFPB went into overdrive post the November 5, 2024, election results. For example, in December, the CFPB finalized its previously proposed Overdraft Rule, which limits the options that large banks and credit unions have in charging fees when consumers overdraw their account.
That said, many of the regulations and other CFPB pronouncements published after the election at least attempted to reference concerns that might appeal to President Trump. For example, the CFPB’s final rule giving it authority to conduct supervisory examinations of digital funds transfer and payment wallet apps — proposed in 2023 and finalized in November 2024 — referenced a need to prevent Big Tech from “debanking” consumers, a concern often expressed by Republican politicians. Likewise, the CFPB’s proposed rule, announced in December 2024, that would require data brokers to comply with the Fair Credit Reporting Act (FCRA) is, according to the CFPB, warranted by concerns that the targeted activities “undermine America’s national security.”
Though the nomenclature may have shifted postelection, little else did. The CFPB initiated nine enforcement actions between the date of the election and December 31, 2024, and another seven such actions between January 1, 2025, and the inauguration on January 20, 2025 — a pace unprecedented in the CFPB’s history. Though the CFPB typically enters into consent orders (i.e., settlements) with its enforcement targets, the CFPB filed four lawsuits between the date of the election and December 31, 2024, and another three lawsuits between January 1, 2025, and January 20, 2025. The unprecedented number of lawsuits likely reflects two realities: the Biden-era CFPB’s attempt to limit the next administration’s latitude to seamlessly abandon its enforcement priorities, and consumer finance companies’ more bullish prospects of reaching a more favorable resolution with the next administration, even if that occurs post-lawsuit.
For many companies, that gamble appears to have paid off. Though Director Chopra stayed at the helm of the agency for nearly two weeks following President Trump’s inauguration, on January 31, 2025, the president fired Director Chopra. Over the ensuing weeks, there was a flurry of personnel changes at the CFPB, including the appointment of two acting directors followed by the nomination of Jonathan McKernan as permanent director, the termination of probationary employees and experts retained by the CFPB, and various directives to CFPB employees to cease virtually all work, leading to the dismissal of some of the agency’s more than 30 existing enforcement actions and the at least temporary suspension of work on the rest. The nomination of McKernan, a former board member of the Federal Deposit Insurance Corporation (FDIC), may signal that the Trump administration is planning to reform, rather than wholly dismantle, the CFPB. Time will tell.
Elsewhere in the federal government, the FDIC continued its aggressive enforcement posture against banks engaged in what the FDIC views as “risky” relationships with fintech partners. In July, the FDIC, in conjunction with the Office of the Comptroller of the Currency (OCC) and the Federal Reserve Board of Governors (FRB), issued a joint statement outlining the potential risks inherent in bank–fintech arrangements and requested information from interested parties concerning a wide array of issues relevant to bank–fintech partnerships. And in September, on the heels of Synapse’s bankruptcy filing, the FDIC released a notice of proposed rulemaking that would impose additional recordkeeping requirements for deposits received from third-party nonbank entities such as fintechs.
The Federal Trade Commission (FTC) also was active in the enforcement space in 2024. In addition to initiating new enforcement actions against debt collectors and credit repair companies and continuing to prosecute its existing matters, in 2024, the FTC also entered into consent orders with multiple fintech companies resolving allegations that the companies had violated the FTC Act in connection with their applications for Paycheck Protection Program (PPP) loans. The Department of Justice’s (DOJ) level of enforcement in the consumer finance space was consistent with previous years and focused primarily on allegations of racial discrimination in mortgage lending.
At the state level, the California Department of Financial Protection and Innovation (DFPI) and New York Department of Financial Services (DFS) led the way, announcing a number of important regulations and enforcement actions. The DFPI, for example, entered into a consent order with a fintech company that it alleged had failed to disclose certain convenience fees a consumer may incur and, in a related vein, finalized regulations governing earned wage access (EWA) products, classifying them as “loans” for purposes of state law, unlike a growing number of states that have recently enacted EWA-specific laws that treat such products more favorably. While, at the federal level, 2024 may not be a harbinger of what is in store for the consumer finance industry in 2025, the industry can be certain that the DFPI, DFS, and other Democratic-controlled state consumer finance agencies are preparing to pick up the slack from their federal counterparts.
2024 Key Trends: By the Numbers
In 2024, Goodwin tracked 83 publicly announced federal and state enforcement actions related to consumer finance, an increase from 73 such actions tracked in 2023.
Of the actions tracked, 31 (37%) were initiated or joined by state enforcement officials and agencies, representing a slight increase from the 30% of actions that involved state actors in 2023. California led state-level enforcement in 2024 with 12 actions, followed closely by Massachusetts with seven actions and Minnesota with six actions. State enforcement covered a variety of issues, but most state actions in 2024 concerned small-dollar lending, debt collection and settlement, and auto lending. State efforts resulted in total recoveries of about $30 million (including joint state–federal recoveries), a decrease in total recoveries from the $43 million recovered in 2023 — in line with historic trends.
On the federal side, the total number of publicly announced enforcement actions stayed relatively steady year over year, with 55 such actions reported in 2024, including three joint state–federal actions. The number of actions initiated or resolved publicly by the CFPB increased slightly from 30 in 2023 to 33 in 2024. The number of actions initiated or resolved publicly by the FTC also increased slightly from 13 in 2023 to 16 in 2024. The six public enforcement actions announced by the DOJ or the Department of Housing and Urban Development (HUD) were consistent with the general level of enforcement activity in the prior year.
What to Watch for in 2025
If the past two months are any indication, it seems unlikely that the CFPB will continue to lead the way in enforcement and regulation in 2025. Though other federal enforcement agencies such as the FTC, FDIC, and FRB may continue their activities, given their more narrow statutory authority, there is likely to be a fairly substantial void, at least in the near term. We expect the states will keep the regulatory momentum going, as they did during President Trump’s first administration and have already signaled they will do again, though, if the past is prologue, the states simply do not have the funding or staff necessary to fill the void that would be left if the CFPB goes completely dormant.
Below are the key areas of regulatory and enforcement focus we expect to see in 2025.
Artificial Intelligence
We expect all eyes to, again, be on AI in 2025.
The Biden administration appeared to view AI with some skepticism — exemplified by its executive order in October 2023 titled “Executive Order on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence.” This order required the Department of Commerce to enact new requirements for reporting large AI models and computer clusters to the government and many federal agencies, including the CFPB, to appoint a chief AI officer.
Former Director Chopra also made the development and use of AI a focus of his tenure at the CFPB. The CFPB repeatedly explained that it was critical of the use in AI in connection with fraud screening or lending and underwriting decisions. Indeed, the CFPB said that its “position is clear: firms must comply with consumer financial protection laws when adopting emerging technology. If firms cannot manage using a new technology in a lawful way, then they should not use the technology.” And in enforcement actions, the CFPB frequently called out “dark patterns” and “algorithms” whenever it could.
In 2024, the FTC also ramped up enforcement actions related to “dark patterns” and signaled its concern that advertisers may use AI to manipulate consumers habits.
Though we expect AI will be viewed more optimistically by the Trump administration, we still expect consumer finance agencies to be on guard in this rapidly evolving ecosystem and to propose rules and initiate enforcement actions if abuse is detected, notwithstanding the more friendly outlook.
Peer-to-Peer Money Transfer Services
In 2024, peer-to-peer money transfer services were under the microscope, and that focus is likely to remain in 2025. In July 2024, the Senate Homeland Security and Governmental Affairs Permanent Subcommittee on Investigations (PSI) issued a majority staff report that scrutinized the reimbursement practices of Zelle’s three largest owner banks — JPMorgan Chase Bank N.A. (Chase); Wells Fargo Bank N.A. (Wells Fargo); and Bank of America N.A. (BANA). The report concluded that Zelle failed to offer consumers sufficient protections comparable to those offered by other payment methods such as credit and debit cards. Later that same month, the PSI also held a hearing in which representatives of Early Warning Services (EWS) — the company that operates the Zelle network — Chase, Wells Fargo, and BANA provided testimony on how each of their respective employers investigates and treats fraud and scams related to Zelle. Finally, in December 2024, the CFPB filed a lawsuit against EWS, Chase, Wells Fargo, and BANA (Defendants), alleging that the Defendants failed to implement effective consumer safeguards and properly investigate complaints or provide consumers with legally required reimbursement for fraud and errors. While the new administration is expected to review all pending enforcement actions, regardless of the outcome of this specific enforcement action, we expect the attention on peer-to-peer money transfer services to continue, including potential legislation or rulemaking designed to protect victims of fraudulent schemes and transfers.
Short-Term Small-Dollar Credit Fintech Products
One industry that is particularly bullish that it will see a change in fortune under the Trump administration is fintech, especially companies that provide alternatives to traditional payday and title loans, including EWA. The CFPB, DOJ, and FTC have targeted the industry over what they have characterized as false and misleading statements regarding fees and other changes (including tips and donations) and a failure to comply with the Truth in Lending Act (TILA) and/or Regulation Z. For example, in July 2024, the CFPB announced a long-expected interpretive rule characterizing even many nonrecourse EWA products as “credit.”
More recently, in December 2024, the DOJ and FTC filed a lawsuit against Dave Inc., an EWA provider, alleging that Dave misled consumers by deceptively advertising its products, charging hidden fees, misrepresenting how Dave uses consumers’ tips, and charging recurring monthly fees without providing a simple mechanism to cancel them.
The CFPB also filed a lawsuit in May 2024 against a different company — SoLo Funds — that operated a peer-to-peer small-dollar short-term lending platform where borrowers had the option of offering a “tip” to a lender. The CFPB likewise alleged that the tips were, in fact, finance charges that required TILA-compliant disclosures and implicated state usury limits. However, in a recent turn of events and likely demonstration of the Trump administration’s position on EWA and related products, on February 24, 2025, the CFPB agreed to dismiss the suit against SoLo Funds with prejudice.
Indeed, the Trump administration’s position on EWA and related products may have been previewed in a comment letter that 20 state attorneys general submitted to the CFPB during the EWA rule’s comment period. The letter opposed the interpretive rule on several grounds, including that EWA products are not “credit” and tips and other voluntary charges are not “finance charges.”
At the same time, a number of states have moved forward with their own legislation regulating EWA. Though a handful of states have enacted legislation that provides that EWA products are not classified as loans if certain characteristics are satisfied, most recently, the California DFPI finalized regulations over EWA that require companies to register with the agency and classify EWA as a loan product. Thus, even if the Trump administration adopts a more friendly approach to the industry, at the state level, we expect divergent approaches to regulating EWA and other novel short-term small-dollar products.
Credit Reporting
Shortly before the change in administration, the CFPB had signaled that in 2025 it intended to consider revisions to the FCRA because there had been a rapid evolution of the consumer reporting marketplace, including the emergence of companies using business models that rely on newer technologies and novel methods to collect and sell consumer data. In a similar vein, in December, the CFPB proposed a rule aimed at regulating data brokers. Data brokers are companies that collect, aggregate, and sell consumer information such as credit, criminal, employment, and rental histories and other sensitive information. The proposed rule would treat data brokers as consumer reporting agencies under the FCRA. The rule proposes that a data broker that sells any of four types of information about consumers — a consumer’s credit history, credit score, debt payments, or income or financial tier — generally is selling a consumer report. The rule also proposes that when a data broker communicates consumer information for any reason, if a person receiving the information then uses the information for an FCRA purpose, the communication would be a consumer report. The proposed rule also would place the same restrictions on data brokers: that a data broker could only sell a consumer report if the user had a permissible purpose under the FCRA, which does not include for marketing purposes, and would require a clear and conspicuous disclosure how the consumer report would be used. These initiatives now face an uncertain future.
“Junk” Fees
Assuming the CFPB survives and is permitted to operate in some fashion under the Trump administration, we expect the agency will continue to focus enforcement priorities on so-called junk fees, albeit on a more limited scope than the wide-ranging types of fees former Director Chopra considered “junk.”
In March 2024, the CFPB finalized a rule that capped credit card late fees at $8 and eliminated annual adjustments to the late fee cap based on the Consumer Price Index. This rule would have taken effect in early May 2024; however, the U.S. Chamber of Commerce and others filed a lawsuit seeking a preliminary injunction to stop the CFPB from implementing the rule on the basis that it exceeded its statutory authority. The preliminary injunction was granted in May 2024 and is still in effect, with a recent motion to lift the stay denied in December 2024.
During his election campaign, President Trump stated that he would place a temporary cap of about 10% on credit card interest rates, which received swift criticism from the credit card industry.
Most recently, in December 2024, the CFPB issued its final rule to cap the overdraft fees that financial institutions with at least $10 billion in assets can charge to consumers. This rule is set to take effect in October 2025; given the broad popular support for limits on fees and interest, the CFPB may think twice before moving to repeal the rule. (The same is true for the rule published in March 2024 that reduced the average credit card late fee.) But even a sympathetic Trump administration may not be enough to save the overdraft fee cap. Shortly after promulgation, several bank and credit trade associations sued to block the rule, arguing that the CFPB exceeded its regulatory authority and seeking an order and judgment setting aside the final rule. The case is currently pending.
In the waning days of the Biden administration, the CFPB also indicated that it was considering a rulemaking or guidance by June 2025 to address mortgage closing costs. The CFPB stated it was preparing for potential interventions that could increase competition. This effort, too, could survive the change in administration.
One proposed rule that did not survive the change in administration, however, was the CFPB’s proposed rule to “prohibit nonsufficient funds (NSF) fees on transactions that financial institutions decline in real time.” These fees apply to “transactions declined right at the swipe, tap, or click,” which include declined ATM withdrawals, declined debit card purchases, and declined peer-to-peer payments. The CFPB withdrew this proposal on January 10, 2025.
Mortgage Servicing Rules
In July 2024, the CFPB issued a proposed rule to amend the 2013 Mortgage Servicing Rules to require additional support for homeowners in default. The proposed rule would add additional requirements for servicers to meet before they foreclose on the property of defaulted borrowers and require servicers to comply with enhanced protections previously made available during the COVID-19 pandemic. Under the proposed rule, servicers would no longer be required to collect a “complete application” prior to offering loss mitigation options. The loss mitigation review cycle would begin as soon as the borrower requests mortgage relief. Thereafter, “dual tracking” would be prohibited, and borrowers would be protected against the accrual of certain fees. The proposed rule also requires servicers to provide translations of required written communications into languages spoken by a significant majority of their non-Spanish-speaking borrowers. The final rule is expected to be issued in July 2025.
Debt Collection and Credit Repair
During the first Trump administration, the CFPB directed much of its enforcement attention at allegedly unfair, deceptive, and abusive acts or practices engaged in by debt collection and credit repair companies. These industries — which have little lobbying power in the halls of Congress and are even less popular with consumers — became the punching bags. We would expect more of the same from the FTC and CFPB over the next four years as both agencies scale back “regulation by enforcement” and devote their resources to targeting clearly unlawful conduct, such as charging advance fees for credit repair services or misrepresenting the status or amount of a debt.
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