[author: Eric Maxwell]
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
On March 18, President Donald Trump dismissed Democratic Commissioners Alvaro Bedoya and Rebecca Kelly Slaughter from the U.S. Federal Trade Commission (FTC). For more information, click here.
On March 17, Trump nominated Federal Reserve Governor Michelle Bowman to the position of vice chair for supervision at the central bank. Bowman, who has served on the Federal Reserve Board since 2018, is a former community banker and state regulator known for her criticism of stringent bank regulations. Bowman will replace Michael Barr, who stepped down from the role at the end of February. For more information, click here.
On March 12, the Consumer Financial Protection Bureau (CFPB) filed a status report in the credit card late fee rule litigation indicating that it is actively working toward a resolution. The litigation centers on the CFPB’s final rule issued on March 5, 2024, which amended 12 C.F.R. § 1026.52(b) to reduce the safe harbor for late fees from $30 for the first missed payment and $41 for subsequent late payments (within six billing cycles) to $8, and prohibited adjustments for inflation. The plaintiffs challenged this rule under the Administrative Procedure Act, arguing that it exceeded the CFPB’s statutory authority under the Credit Card Accountability and Disclosure Act. The status update follows last month’s court’s order, which required the CFPB to explain its plans for proceeding with the case. The report states: “Counsel for the Bureau have begun discussing with Plaintiffs’ counsel potential ways to resolve this case. Based on those conversations, the Bureau is optimistic that an agreement can be reached within 30 days, but the parties require additional time to see if an agreed resolution is feasible.” For more information, click here.
On March 11, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued a Geographic Targeting Order (GTO) to combat illicit activities and money laundering by Mexico-based cartels and other criminal actors along the southwest border of the U.S. The GTO mandates that all money services businesses (MSBs) in 30 ZIP codes across California and Texas file Currency Transaction Reports (CTRs) with FinCEN for cash transactions at a $200 threshold. The GTO, effective 30 days after its publication in the Federal Register and lasting for 179 days, is part of a broader government strategy to disrupt the operations of drug traffickers and other criminal actors. This initiative follows Trump’s executive order designating certain cartels as Foreign Terrorist Organizations (FTOs) and Specially Designated Global Terrorists (SDGTs), further restricting their access to the U.S. financial system. For more information, click here.
On March 10, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency released the results of the Shared National Credit (SNC) Program reviews for the first and third quarters of 2024. The report indicated that overall credit risk remains moderate, with a slight increase in the severity of risk due to higher interest rates and compressed operating margins in certain sectors. The total SNC commitments increased to $6.5 trillion, with a modest rise in special mention and classified commitments from 8.9% in 2023 to 9.1% in 2024. The report highlighted that leveraged loans, which comprise nearly half of total SNC commitments, continue to pose high credit risk, particularly in the Technology, Telecom, and Media sectors. The agencies emphasized the need for robust risk management practices to adapt to changing economic conditions and mitigate the impact of layered risks in leveraged lending. For more information, click here.
On March 10, Christopher Mufarrige, the newly appointed director of the Bureau of Consumer Protection at the FTC, published a blog explaining the significance of civil investigative demands (CIDs) for businesses and the ramifications for failing to respond. The director warns that “[i]f your business receives such a demand for information, we expect you to respond in a reasonable and timely manner or face legal consequences.” A CID is an investigative tool granted to the FTC under Section 20 of the FTC Act. It functions similarly to a subpoena, allowing the FTC to compel businesses to provide documents, testimony, tangible items, reports, or answers to specific questions. The primary purpose of a CID is to investigate potentially unfair or deceptive acts or practices. Ignoring or refusing to comply with a CID can lead to the commission seeking judicial enforcement to ensure compliance. For more information, click here.
On March 7, the Community Financial Services Association of America (CFSA) and the Consumer Service Alliance of Texas filed a petition for a writ of certiorari with the U.S. Supreme Court seeking to overturn a decision by the U.S. Court of Appeals for the Fifth Circuit. The Fifth Circuit held that in order to obtain judicial relief, a party challenging governmental action taken by an individual who remained in office against the president’s wishes due to an unconstitutional removal restriction must show that a hypothetical replacement officer would have taken a different action. The petitioners argue that the Fifth Circuit’s requirement for them to demonstrate that a hypothetical replacement would have acted differently is at odds with the Supreme Court’s decision in Collins v. Yellen. According to CFSA, the Fifth Circuit’s approach is unusually stringent as both the Ninth and Tenth Circuits interpret the standard as requiring plaintiffs to show only that a president would have fired the challenged official in absence of the removal protection. According to the petition, the Fifth Circuit’s approach requires petitioners to “supply evidence that, in a world where Cordray had been removable, Trump’s hypothetical replacement for him in 2017 would have acted differently with respect to the Rule.” For more information, click here.
On March 7, the Federal Communications Commission (FCC) issued a warning to consumers about the increasing prevalence of “Grandparent Scam” robocalls, which exploit personal information to defraud elderly individuals. This warning coincides with the Department of Justice’s indictment of 25 Canadian nationals for their involvement in a scam that targeted elderly victims in more than 40 states by falsely claiming to be relatives in need of bail money. The FCC’s alert highlights the sophisticated tactics used by scammers, including spoofing phone numbers, using social media information, and employing voice cloning technology. The FCC advises consumers to verify the authenticity of such calls, avoid providing personal information or money to unknown callers, and report any suspicious activity. For more information, click here.
On March 7, Federal Reserve Chair Jerome H. Powell delivered remarks at the University of Chicago Booth School of Business during the 2025 U.S. Monetary Policy Forum. Powell highlighted that despite elevated uncertainty, the U.S. economy remains robust with solid labor market conditions and inflation moving closer to the Federal Reserve’s 2% target. He noted that GDP growth has been steady, supported by resilient consumer spending, although there are signs of potential moderation. The labor market continues to show strength with low unemployment rates and wage growth outpacing inflation. Powell acknowledged the progress in reducing inflation from its mid-2022 peak but emphasized that the path to achieving the 2% target remains uneven. He also discussed the potential impacts of significant policy changes under the new administration, including trade, immigration, fiscal policy, and regulation, on the economy and monetary policy. Powell concluded by mentioning the Federal Reserve’s ongoing review of its monetary policy framework, aiming to adapt and improve its approach to better serve the American people. For more information, click here.
On March 4, the Federal Housing Finance Agency (FHFA) issued two orders requiring Fannie Mae and Freddie Mac to report the results of their stress testing as of December 31, 2024. These orders, issued under the authority of section 165(i)(2) of the Dodd-Frank Act and section 401 of the Economic Growth, Regulatory Relief, and Consumer Protection Act, mandate that financial companies with total consolidated assets exceeding $250 billion conduct periodic stress tests. The FHFA’s orders stipulate that each entity must submit their stress test results to both the FHFA and the Board of Governors of the Federal Reserve System. The stress tests are designed to assess whether these entities have sufficient capital to withstand severely adverse economic conditions. For more information, click here and here.
On March 13, the Utah legislature passed H.B. 279, known as the Earned Wage Access Services Act. This legislation aims to regulate earned wage access (EWA) providers. Notably, “providers” is defined to include a person engaged in the business of offering earned wage access, but not an employer that advances a portion of earned wages directly to employees or independent contractors. To operate as an EWA provider in Utah, among other things, entities must register with the Division of Consumer Protection. If signed by the governor, the act will take effect on May 7. For more information, click here.
On March 12, the State of Arkansas enacted House Bill 1184, which amends the Fair Mortgage Lending Act to enhance consumer privacy protections applications. The bill introduces definitions for “consumer report” and “mortgage trigger lead,” and prohibits the use of mortgage trigger leads in misleading or deceptive ways. It mandates clear disclosures in initial communications with consumers, restricts solicitations to those who have opted out of prescreened offers, and prohibits contacting individuals on the national “Do-Not-Call” registry. The legislation aims to ensure transparency and protect consumer information in the mortgage lending process. For more information, click here.
On March 10, California Attorney General Rob Bonta announced the shutdown of 42 fraudulent cryptocurrency websites in 2024, which allegedly scammed victims out of at least $6.5 million, with an average loss of $146,306 per victim. These scams, often referred to as “pig-butchering” scams, involve scammers building trust with victims through random messages and directing them to fake investment websites. Bonta emphasized the importance of vigilance and urged Californians to avoid sending money to unknown individuals. The California Department of Justice also provided a list of red flags to help consumers identify illegitimate websites, including impossible rates of return, lack of contact information, and the use of stolen images and content. For more information, click here.
On March 10, Bonta announced an investigative sweep into the location data industry to ensure compliance with the California Consumer Privacy Act (CCPA). The investigation targets advertising networks, mobile app providers, and data brokers that may be violating CCPA requirements by collecting and sharing detailed consumer location data without proper consent. The enforcement sweep aims to protect consumers’ rights to stop the sale and sharing of their personal information and to limit the use of their sensitive data, including geolocation information. For more information, click here.
