James Kim, a leader in Troutman Pepper Locke’s Payments + Financial Technology Group, was quoted in the January 16, 2025 Banking Risk & Regulation article, “Trump Administration Expected to Roll Back Biden-Era UDAP Rules.”
James Kim, head of law firm Troutman Pepper Locke’s fintech group, says: “UDAP has been controversial in the US in the past couple of years. Now that we have a new president and a new Congress, the use of UDAP may change.
“If the federal agencies are more business-friendly, certain state regulators will become more aggressive in filling the void.”
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Kim notes that this rule is one of several “last-ditch measures” rapidly issued by current CFPB Director Rohit Chopra ahead of Trump’s inauguration on January 20.
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State regulators will likely step in to address perceived enforcement gaps, intensifying scrutiny on financial institutions, predicts Kim. This dual-level focus will require firms to navigate evolving compliance demands while maintaining consumer trust.
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Kim stresses that understanding these risks is essential, highlighting that practices like misleading advertising or opaque disclosures are precisely the behaviours regulators aim to curb.
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“The big risk is the reputational one,” says Kim. “No bank wants a reputation that they mistreat customers or do false advertising.”
