As European financial services companies and fintechs brace for a wave of new regulations, their counterparts in the U.S. are anticipating a strong trend in the opposite direction as President Trump and the Republicans take control of the government.
Right now, with 2025 barely underway, U.S. regulators in a number of instances are still in crack-the-whip mode with regard to fintechs and financial services companies.
Last week, we learned that Digital Currency Group will pay a combined $28.5 million in civil penalties for misleading investors about the financial condition of its subsidiary, Genesis Global Capital. Also last week, American Express agreed to pay $230 million to settle charges of alleged deceptive sales charges for credit card and wire transfer products to small businesses. Mastercard will have to pay $26 million to settle a gender and race bias-based class action lawsuit.
A little earlier this month, the Consumer Financial Protection Bureau (CPFB) announced that it was suing Capital One for allegedly cheating millions of consumers out of more than $2 billion in interest. The Commodity Futures Trading Commission convinced a U.S. District Court to enter a consent order against Gemini Trust Company with a $5 million civil monetary penalty. Also this month, the SEC reported charges against nine investment advisers and three broker-dealers for recordkeeping failures and issued fines totaling more than $63 million. Speaking of the SEC, it has ordered popular brokerage Robinhood to pay $45 million in penalties over a variety of compliance failures.
You get the picture. The question is, with the arrival of the Trump team, how much of this regulatory oversight is likely to go dark?
In the U.S., the focus will be on agencies like the SEC and the CPFB. On his first day in office, President Trump issued a regulatory freeze. This will prevent agencies from implementing proposed rules until an agency appointed by the Trump administration reviews the specific regulation. The Trump administration has not spoken directly about the CPFB, though it is widely believed that the current director Rohit Chopra will be fired if he does not resign.
What proposed rules from the CPFB might find themselves in the freezer? There are a few worth highlighting. These include the CPFB’s rule limiting the ability of financial institutions to charge overdraft fees, which is slated to go into effect in October, as well as a rule banning the listing of medical debt on credit reports that was issued just last month. Another key ruling relates to aspects of the Truth in Lending Act (TILA) and its requirements for Property Assessed Clean Energy (PACE) transactions.
The CPFB is sufficiently concerned about the changes likely to come from the Trump administration that it has issued a report called “Strengthening State-Level Consumer Protections.” The report, which states the case for consumer financial protection laws going all the way back to the Woodrow Wilson administration at the beginning of the 20th century, speaks loftily about the importance of federal-state partnership when it comes to protecting consumers. It even praises state-level legislation for providing “an important source of information” to Congress and federal regulators, enabling them to better “adjust standards over time.”
Nevertheless, analysts have suggested that the report appears to be an attempt to encourage state legislatures to adopt their own consumer protection laws in the event that consumer financial protection laws at the federal level are weakened or removed entirely. Given the intensity and eagerness with which the Trump team is taking to its task, that might not be such a bad idea.
Photo by David Daza
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