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
Federal Activities:
On August 22, the U.S. House of Representatives incorporated a provision into the National Defense Authorization Act for Fiscal Year 2026, effectively barring the Federal Reserve (Fed) from developing or issuing a central bank digital currency (CBDC). This strategic move, leveraging the “must-pass” nature of the defense bill, aims to advance crypto policy after previous standalone CBDC ban efforts failed in 2023. The provision restricts the Fed from issuing digital assets or testing currencies, except for stablecoins, aligning with priorities on crypto privacy. Despite the House’s actions reflecting growing political resistance to centralized digital currency, the Senate’s approval remains uncertain. For more information, click here.
On August 21, the Consumer Financial Protection Bureau (CFPB) took a significant step forward in its reconsideration of the Section 1033 open banking final rule, originally issued in November 2024, by issuing an advance notice of proposed rulemaking (ANPR). This move follows the CFPB’s announcement that it would be reopening the rulemaking process when it requested a stay to the original rule amidst legal challenges. The CFPB recently decided to stay the Section 1033 rule, which mandated certain financial institutions to provide consumers and authorized third parties with access to their financial data. The ANPR attempts to gather public input on the following four pivotal issues: scope of representation, cost defrayment, data security, and data privacy. For more information, click here.
On August 21, Acting Chairman Caroline D. Pham of the Commodity Futures Trading Commission (CFTC) announced the commencement of the agency’s next crypto sprint initiative, aimed at implementing recommendations from the President’s Working Group on Digital Asset Markets report. This initiative underscores the administration’s priority to enable immediate trading of digital assets at the federal level. Pham highlighted the support received from stakeholders for the CFTC’s listed spot crypto trading initiative, which aligns with the SEC’s Project Crypto and President Trump’s directive for American leadership in digital finance. The CFTC invites stakeholders to submit feedback on the report’s recommendations by October 20, as part of its effort to operationalize the president’s vision for a “Golden Age of innovation” in crypto markets. For more information, click here.
On August 21, the CFPB initiated an adversary proceeding against Synapse Financial Technologies, Inc., which specializes in bridging nonbank fintech platforms with traditional banks to offer consumer banking services. Synapse had filed for Chapter 11 bankruptcy on April 22, 2024, but the CFPB’s complaint alleges that Synapse violated the Consumer Financial Protection Act of 2010 by inadequately maintaining records of consumer funds, leading to discrepancies with partnering banks’ records and resulting in a shortfall of $60 to $90 million. Consequently, consumers were allegedly deprived of access to their funds for extended periods, with many still not receiving their full account balances. The proposed stipulated final judgment, if approved by the court, includes injunctive relief prohibiting the sale of customer information and imposes a $1 civil money penalty. For more information, click here.
On August 21, the U.S. Court of Appeals for the D.C. Circuit granted the Justice Department’s emergency motion to prevent former NCUA Board Members Todd Harper and Tanya Otsuka from returning to their positions while their appeal is pending. This decision replaces a temporary stay issued last month with a formal stay pending appeal. Harper expressed disappointment over the ruling, highlighting the agency’s operational challenges due to the lack of a quorum, which hampers decision-making on critical issues such as interest-rate ceilings for federal credit unions and multibillion-dollar mergers. For more information, click here.
On August 21, the U.S. Securities and Exchange Commission (SEC) announced the appointment of Judge Margaret “Meg” Ryan as the director of the Division of Enforcement, effective September 2. Judge Ryan, a senior judge of the U.S. Court of Appeals for the Armed Forces, brings extensive legal experience to the SEC, having served as a judge advocate in the U.S. Marine Corps and as a partner at prominent law firms. SEC Chairman Paul S. Atkins praised her appointment, emphasizing her role in enforcing securities laws related to fraud and manipulation. Acting Director Sam Waldon will return to his role as chief counsel for the division, continuing his service at the SEC. Judge Ryan expressed her commitment to upholding the SEC’s mission to protect investors and deter fraudulent activities in financial markets. For more information, click here.
On August 19, Federal Reserve Board Vice Chair for Supervision Michelle W. Bowman delivered a speech at the Wyoming Blockchain Symposium, emphasizing the transformative potential of blockchain and digital assets in reshaping the financial system. She highlighted the importance of embracing innovation while balancing regulatory oversight to ensure safety and soundness in banking. Bowman discussed the Fed’s approach to integrating new technologies, such as tokenization and AI, into bank supervision, advocating for a tailored regulatory framework that accommodates technological advancements. She urged collaboration between regulators and industry to leverage blockchain for combating fraud and enhancing efficiency in financial transactions. Bowman’s remarks underscored the need for regulatory certainty and adaptability to foster innovation and maintain America’s competitive edge in the digital asset space. For more information, click here.
On August 19, U.S. Senate Banking Committee Chairman Tim Scott participated in a fireside chat at the Wyoming Blockchain Symposium, discussing his legislative efforts to advance digital asset regulation in line with Trump’s vision to establish the U.S. as the global leader in cryptocurrency. Following the successful advancement of the GENIUS Act to the president’s desk, Scott plans to push digital asset market structure legislation through the Senate Banking Committee in September. He emphasized the importance of collaboration with the Trump administration and other key figures to ensure comprehensive legislative action, highlighting the necessity of creating an environment conducive to innovation and competition. Scott’s remarks underscored the urgency of legislative progress to support the evolving digital asset landscape and the broader financial system. For more information, click here.
On August 19, the Federal Deposit Insurance Corporation (FDIC) board of directors approved a proposed rule to amend the regulations concerning the display of the FDIC official digital sign and nondeposit signage. This proposal aims to simplify the requirements for banks to display these signs on digital deposit-taking channels, including bank websites, mobile applications, ATMs, and similar devices. The changes seek to refine the display requirements established in a 2023 final rule, ensuring that signage appears on screens and pages where it is most relevant to consumers. Stakeholders are invited to submit comments on the proposed rule within 60 days following its publication in the Federal Register. For more information, click here.
On August 19, PSQ Holdings, Inc. announced the closure of a CFPB investigation into its subsidiary, Credova Financial LLC, which had been ongoing since February 2021. The investigation was characterized by PSQ Holdings as politically motivated, allegedly aimed at suppressing Credova’s activities related to the Second Amendment. The closure is viewed by PublicSquare, the parent company, as a victory affirming its commitment to liberty and constitutional rights. For more information, click here.
On August 18, the Office of the Comptroller of the Currency (OCC) terminated the consent order against Anchorage Digital Bank, N.A., a crypto bank based in Sioux Falls, SD. The original order, issued in April 2022, aimed to ensure the bank’s compliance with laws and regulations by addressing deficiencies in its compliance program, including suspicious monitoring procedures and customer due diligence controls. Anchorage Digital had already begun implementing corrective measures, such as forming a committee and hiring an outside consultant. The OCC’s decision to terminate the order reflects its assessment that the bank’s safety, soundness, and compliance no longer necessitate the order’s continuation. For more information, click here.
On August 15, the OCC released its annual update to the Bank Accounting Advisory Series (BAAS). This update includes staff responses to frequently asked questions from the banking industry and bank examiners, aiming to ensure consistent application of accounting standards and regulatory reporting among national banks and federal savings associations. The latest edition revises certain content for clarity and removes outdated questions, while maintaining the prior conclusions and interpretations of the OCC Office of the Chief Accountant. The BAAS serves as a guide based on generally accepted accounting principles and regulatory guidance, rather than representing official rules or regulations of the OCC. For more information, click here.
On August 12, banking industry groups expressed concerns about the GENIUS Act’s prohibition on stablecoin issuers offering interest or yield, warning that loopholes could lead to significant deposit outflows and undermine credit creation. In a joint letter, the groups urged Congress to close these loopholes to protect the stability of the financial market and ensure credit flow to American businesses and families. One day later, on August 13, a coalition of state financial regulators, legislators, consumer advocacy groups, and banking associations called on Senate leaders to remove Section 16(d) from the GENIUS Act. They argued that this section allows state-chartered uninsured depository institutions with stablecoin subsidiaries to bypass state licensing and oversight, weakening consumer protections and state sovereignty. For more information, click here and here.
On August 8, Billy Long, the IRS commissioner, announced his departure after just two months in the role, as Trump plans to nominate him as ambassador to Iceland. Treasury Secretary Scott Bessent will temporarily lead the IRS. Long, a former auctioneer and Missouri congressman, was confirmed by the Senate in June amidst leadership changes at the IRS, which has seen several interim commissioners since Trump’s return to office. The Trump administration has focused on reducing the IRS workforce, planning cuts of up to 40%. Long’s tenure included offering early dismissals to IRS employees and navigating the agency’s tumultuous leadership landscape. Meanwhile, the IRS faces internal challenges, including significant staff reductions and legal disputes over access to tax data. For more information, click here.
State Activities:
On August 19, Wyoming made history as the first U.S. state to introduce a government-backed stablecoin, the Frontier Stable Token (FRNT). Issued by the Wyoming Stable Token Commission, FRNT is fully collateralized with U.S. dollars and short-term Treasury securities, with an additional 2% overcollateralization mandated by state law to ensure stability and consumer confidence. The token is deployed across seven major blockchains, enhancing accessibility and integration with decentralized finance (DeFi) applications. Supported by industry partners like LayerZero, Franklin Advisers, Inca Digital, and The Network Firm, FRNT will be available on the Kraken exchange and through Rain’s Visa-integrated card platform on Avalanche. Governor Mark Gordon emphasized Wyoming’s leadership in blockchain policy, noting the state’s passage of more than 45 digital asset laws since 2016. For more information, click here.
On August 19, Massachusetts Attorney General Andrea Joy Campbell announced a $795,000 settlement with Peabody Properties, Inc., a property management company based in Braintree, MA. This settlement, pending court approval, addresses Peabody’s alleged failure to protect the personal information of thousands of Massachusetts residents and its delay in notifying both the AG’s office and affected consumers following multiple data breaches. Between November 2019 and September 2021, Peabody experienced five cybersecurity breaches, exposing sensitive information such as Social Security numbers and bank account details. As part of the consent judgment, Peabody is required to implement comprehensive cybersecurity measures, including phishing protection software and multifactor authentication, and conduct annual security assessments for three years. The settlement aims to resolve claims under the Massachusetts Consumer Protection Act and Data Security Law. For more information, click here.
On August 18, the Digital Asset Kiosks Act, Public Act 104-0429, was approved by Illinois Governor JB Pritzker and became effective immediately. This legislation aims to protect Illinois residents from fraud and scams associated with digital asset kiosk transactions by establishing registration requirements, customer disclosures, and other safeguards. The act mandates that digital asset kiosk operators register with the Department of Financial and Professional Regulation, adhere to transaction limits, and provide clear disclosures to customers. It also requires operators to implement anti-fraud measures, use blockchain analytics, and maintain a dedicated communication line for law enforcement. Additionally, the act sets forth procedures for refunds in cases of fraudulent transactions and outlines the department’s authority to enforce compliance, including the imposition of penalties and the ability to issue cease and desist orders. For more information, click here.
On August 15, Public Act 104-0297 was approved by Illinois Governor JB Pritzker, amending the Collection Agency Act to address coerced debt. Effective January 1, 2026, this new law provides that debtors are not liable for debts incurred through coercion, fraud, or intimidation, and outlines a process for debtors to assert coerced debt by submitting a written statement to collection agencies. The act mandates collection agencies to cease collection activities upon receiving a complete statement of coerced debt and requires them to notify consumer reporting agencies of disputed information. It also establishes civil liability for perpetrators of coerced debt and sets penalties for collection agencies failing to comply with the act. For more information, click here.
