This regular publication from DLA Piper focuses on helping banking and financial services clients navigate the ever-changing regulatory landscape.
In this edition:
- Board and policy changes possible at the Federal Reserve.
- CFPB puts data-sharing rule on hold, seeks public input on redraft.
- President Trump signs Executive Order on debanking.
- New Texas law on sales-based financing takes effect September 1, 2025.
- “Buy-Now-Pay-Later” licensing and regulatory provision enacted in New York, but regulations still pending.
- FDIC proposes rules to simplify signage requirements.
- Federal Reserve disbands Novel Activities Supervision Program.
Board and policy changes possible at the Federal Reserve. On August 25, 2025, President Donald Trump announced that he is terminating Federal Reserve Governor Lisa Cook – an action that is being challenged in the courts and may rise to the US Supreme Court.
In his August 25, 2025 letter, President Trump informed Cook she was “hereby removed” from her post “effective immediately.” As the basis for this action, the letter cited a “criminal referral” accusing Cook of mortgage fraud, first raised by Bill Pulte, Director of the Federal Housing Finance Agency (FHFA). It is unclear if the President has the legal authority to dismiss Cook, who has not been officially charged with wrongdoing. Section 10 of the Federal Reserve Act specifies that a president may only remove members of the Fed’s Board of Governors (Fed Board) “for cause,” though what merits a for-cause firing has not been explicitly defined.
Cook has filed suit to stop the President’s action and said she would not resign. On September 9, 2025, a US District Court judge in Washington, DC, granted Cook’s request for a court order to keep her seat on the Board for now, finding that Cook is “substantially likely to succeed on the merits.” Cook was nominated by President Joe Biden and confirmed by the Senate in 2022. Her term is not set to expire until 2038.
- The Supreme Court, in a May 22, 2025 decision upholding the President’s power to remove members from two federal labor-related boards, suggested an exception to this authority for the “constitutionality of the for-cause removal protections for members of the Federal Reserve’s Board of Governors,” calling the Fed a “uniquely structured, quasi-private entity.” Among the questions the courts would have to consider are whether an allegation is sufficient cause for removal, as well as whether alleged misconduct that occurred prior to Cook’s nomination and was unrelated to her official duties would qualify.
Miran nominated to Fed Board. If Cook’s removal is ultimately upheld, it would give President Trump a second vacancy to fill on the Fed Board, one of the three key federal banking regulatory agencies. On August 1, 2025, now former Fed Governor Adriana Kugler informed President Trump in that she would step down from the Board effective August 8. Kugler was nominated by President Biden and confirmed by the Senate in 2023. President Trump has announced that he will nominate Stephen Miran, currently the Chair of the White House Council of Economic Advisers, to fill the vacancy on a short-term basis.
In an August 7, 2025 post, President Trump said Miran would serve until January 31, 2026 and that “we will continue to search for a permanent replacement.” Miran served as an economic strategy advisor in the US Department of the Treasury during the first Trump Administration after a career as a private sector analyst and portfolio manager.
- On September 10, 2025, the Senate Banking Committee voted to advance the nomination of Stephen Miran to the full Senate. Getting Miran sworn in before the Fed’s upcoming September 16–17 Federal Open Market Committee meetings would entail an uncommonly rapid process.
In his current capacity, Miran has been a key champion for President Trump’s economic policies, including his deregulatory agenda. In a series of advocacy pieces for the Manhattan Institute, a think tank where he was a senior fellow, Miran has questioned the premise of the Fed’s independence from the executive branch.
CFPB puts data-sharing rule on hold, seeks public input on redraft. The Consumer Financial Protection Bureau (CFPB) has issued an advance notice of proposed rulemaking soliciting comments to inform its revised rule on consumer data sharing. As reported in the November 8, 2024 edition of Bank Regulatory News and Trends, CFPB issued what was then framed as a final rule last October (published in the Federal Register on November 18, 2024) interpreting the personal financial data rights (PFDR) established by the Consumer Financial Protection Act of 2010 (Title X of the Dodd-Frank Act).
The Biden-era PFDR Rule included a series of deadlines by which data providers would need to comply with the new requirements based on the size of the entity, running from April 1, 2026, through April 1, 2030. The PFDR Rule did not set explicit compliance dates for third parties that receive data on the grounds that their compliance was functionally tied to compliance by data providers.
- As part of its reconsideration of the PFDR Rule, the Bureau now plans to extend the compliance dates. CFPB is seeking input on what extensions may be appropriate, with a specific focus on whether financial institutions have encountered unexpected difficulties or costs in implementing the PFDR Rule to date, how long entities would need to comply with a revised rule, and how the necessary implementation time should vary based on the size of firms covered by the rule.
- The PFDR Rule was challenged in court by a bank, the Bank Policy Institute (a national banking trade association), and the Kentucky Bankers Association. On July 29, 2025, the US District Court for the Eastern District of Kentucky granted a motion to stay proceedings in the case, following CFPB’s announcement that it “seeks to comprehensively reexamine this matter alongside stakeholders and the broader public to come up with a well-reasoned approach . . . that aligns with the policy preferences of new leadership and addresses the defects in the [PFDR Rule].”
- On July 23, 2025, a coalition of fintech, crypto, and retail advocacy groups – including the Blockchain Association, the Crypto Council for Innovation, and the Financial Technology Association – sent a letter urging President Trump to defend what the industry refers to as “open banking” rules, which they said are under attack by the nation’s largest banks.
President signs Executive Order on debanking. President Trump on August 7, 2025 signed an Executive Order (EO) targeting “debanking,” the practice of denying banking or financial services to a customer or potential customer for reasons seemingly unrelated to their individualized financial, legal, or reputational risks. The EO, titled “Guaranteeing Fair Banking for All Americans,” notes that “financial institutions have engaged in unacceptable practices to restrict law-abiding individuals’ and businesses’ access to financial services on the basis of political or religious beliefs,” and “lawful business activities that the financial service provider disagrees with or disfavors for political reasons.”
A key example of “politicized or unlawful debanking” cited in the EO and an accompanying fact sheet is “Operation Chokepoint,” an Obama-era initiative aimed at reducing illicit activities by pressuring banks to terminate relationships with legal but high-risk businesses like payday lenders and firearms dealers. The EO states that the digital assets industry has also been the target of debanking. The EO called for specific actions:
- Federal banking regulators are directed to “remove reputational risk and other equivalent concepts that enable politicized or unlawful debanking from their guidance, examination manuals and other materials.”
- Regulators are tasked with reviewing financial institutions under their supervision for policies encouraging debanking and taking remedial actions, “including fines or consent decrees.” Cases involving debanking based on religion would be referred to the Attorney General.
- The Small Business Administration (SBA) is required to reinstate clients and potential clients previously denied services “due to unlawful debanking.”
- The Treasury Department and the White House Director of the National Economic Council are called on to develop additional legislative or regulatory actions.
Additional analysis on the EO was prepared by DLA Piper attorneys and is available here.
Banking regulatory agencies have already begun to move on elements of the new mandate. The Federal Reserve announced in June 2025 that “reputational risk will no longer be a component of examination programs in its supervision of banks.”
The Office of the Comptroller of the Currency announced in March 2025 that it was removing references to reputation risk from its Comptroller’s Handbook booklets and guidance issuances.
In an April 2025 speech, Travis Hill, Acting Chairman of the Federal Deposit Insurance Corporation (FDIC), said, “We are also working on a rulemaking related to reputational risk that would prohibit FDIC supervisors from (1) criticizing or taking adverse action against institutions on the basis of reputational risk and (2) requiring, instructing, or encouraging institutions to close, modify, or refrain from offering accounts on the basis of political, social, cultural, or religious views. Relatedly, we are also exploring additional ideas to comprehensively put an end to debanking.”
New Texas law requiring sales-based financing providers to issue disclosures and register took effect September 1, 2025. Texas Governor Greg Abbott (R) signed into law a measure requiring providers and brokers of commercial sales-based financing transactions, including merchant cash advance products, to register with the state Office of Consumer Credit Commissioner.
The statute, House Bill 700, passed by the State Legislature in May 2025 and signed by Abbot on June 20, 2025, also imposes disclosure requirements on providers offering these products to Texas borrowers.
Under the legislation, providers must deliver written disclosures and obtain recipients’ signature for commercial sales-based financing transactions of less than $1 million. Disclosures must include, among other items:
- The total amount of the financing, the disbursement amount and the finance charge
- The total repayment amount and the estimated period for the periodic payments to equal the total repayment amount under the terms of the financing
- The payment amounts, with different requirements for fixed or variable amounts
- A description of all other potential fees and charges not included in the finance charge
- A description of collateral requirements or security interests, if applicable, and
- A statement outlining whether the provider will pay compensation directly to a commercial sales-based financing broker.
The law exempts banks, bank holding companies, credit unions, and any of their affiliates. Violators of the law will be subject to a civil penalty of $10,000 for each violation, but the law does not provide for a private right of action.
- Texas’s new disclosure requirements took effect on September 1, 2025. However, the new registration requirements do not become effective until December 31, 2026.
Notably, the law prohibits a provider or commercial sales-based financing broker from establishing a mechanism for automatically debiting a recipient’s deposit account unless the provider or broker holds “a validly perfected security interest in the recipient's account under Chapter 9, Business & Commerce Code, with a first priority against the claims of all other persons."
Louisiana also enacts law imposing disclosure requirements on sales-based financing providers. Louisiana enacted its own commercial financing disclosure law – Louisiana House Bill 470 – effective August 1, 2025. Similar to Texas, it applies only to revenue-based financing transactions (ie, merchant cash advances).
HB 470 applies to "revenue-based financing transactions," defined as “an agreement under which a person engaged in a commercial enterprise sells or agrees to forward a percentage of sales, revenue, or income, and the person's payment obligation increases and decreases according to the volume of sales made or revenue or income received.”
Unlike Texas, however, it does not impose registration requirements or restrictions on automatic debits. Notably, Louisiana’s law is the first state commercial financing disclosure law that does not exempt any banks or other depository institutions. It is also the first law with no dollar amount maximum to limit the law’s scope to small business financing.
Texas and Louisiana join nine other states – California, Connecticut, Florida, Georgia, Kansas, Missouri, New York, Utah, and Virginia – that have enacted laws to regulate commercial financing in recent years.
“Buy-Now-Pay-Later” licensing and regulatory provision enacted in New York, but regulations still pending. In a first-of-its-kind move intended to protect consumers but criticized by industry, the recently enacted fiscal year 2026 New York state budget includes the “Buy-Now-Pay-Later (BNPL) Act,” legislation to regulate companies and products in the growing BNPL sector.
BNPL loans allow customers to split payments into four equal installments. Many lenders don’t charge interest on the loans, but some providers charge service, convenience, or late fees, according to a description by CFPB. The New York law defines a BNPL loan to mean “closed-end credit provided to a consumer with such consumer’s particular purchase of goods and/or services” with limited exemptions for motor vehicles and certain credit sales.
BNPL providers will be required to obtain a license from the New York Department of Financial Services (NYDFS). A limit of 16 percent on interest rates is mandated under the law, consistent with the state’s civil usury cap. All BNPL lenders will be required to disclose the key terms of loans in a manner that complies with applicable federal regulations, including Regulation Z (the Truth in Lending Act, or TILA), as well as additional regulations still to be promulgated by NYDFS. Other provisions include refund requirements, consumer dispute procedures, and data sharing restrictions.
The law only applies to state-chartered banks, and excludes from its purview a “national bank, federal savings bank, federal savings and loan association, federal credit union, federal trust company, or foreign banking corporation licensed by the comptroller of the currency to transact business in” the state.
- While the state budget was signed by New York Governor Kathy Hochul (D) on May 9, 2025, the BNPL provision does not take effect until 180 days, or about 6 months, from the date that NYDFS promulgates implementing regulations. No timetable for the rulemaking process has been announced, but the agency would have to draft regulations and solicit public comments before a final administrative framework is established and application forms are developed.
- In a May 9, 2025 signing statement, Governor Hochul touted the law’s safeguards for consumers.
- However, New York appears to be moving in the opposite direction as federal regulators. In May 2025, CFPB announced it would not enforce a May 2024 interpretive rule to apply new requirements to BNPL loans. The Financial Technology Association (FTA) had sued to block the rule.
- In a May 7, 2025 statement, the FTA said that the New York budget provision “reflects a fundamental misunderstanding of BNPL products.”
FDIC proposes rules to simplify signage requirements. By notational vote without a meeting, the FDIC announced a notice of proposed rulemaking to simplify signage and advertising rules. In its press release, the FDIC noted that, “The proposed changes are intended to revise requirements adopted in a 2023 final rule that, among other things, established the FDIC official digital sign and required signage for ATMs and digital banking channels.” The proposed rule is intended to focus these disclosures to those screens and pages where it is most relevant, in order to reduce the potential for consumer confusion and the watered-down effect that over-disclosure may have when included in unnecessary contexts.
Comments on the proposed rule are due October 20, 2025.
Fed Board disbands Novel Activities Supervision Program. The Fed Board announced that it was withdrawing its 2023 guidance creating the Novel Activities Supervision Program. The program was established to coordinate and focus supervisory efforts for novel activities conducted by banks related to crypto-assets, distributed ledger technology (ie, blockchain), and fintech partnerships with nonbank institutions delivering financial products and services to consumers. Noting that the Board and its staff have become suitably familiar with these topics, the Board’s withdrawal of the special program will move supervision of such back into the standard supervisory process.
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