FinReg Currents - Week 3

Each week of the first 100 days of the new Trump Administration, we will publish updates on key federal financial services regulatory and related developments.

This week, we review the following developments as of Wednesday:

• Consumer Financial Protection Bureau (CFPB) Leadership Change
• Halt to Existing CFPB Proceedings
• Senate Hearing on Debanking
• Securities and Exchange Commission (SEC) Crypto Task Force Update
• Federal Deposit Insurance Corporation (FDIC) Release of Crypto Supervision Documents

• Department of Government Efficiency (DOGE) Efforts Related to Financial Services

CFPB Leadership Change

According to press reports, late on January 31, 2025, President Trump fired Rohit Chopra as Director of the CFPB. Chopra was a Biden appointee who led the agency since October 2021; his five-year term was otherwise slated to continue until October 2026. According to a February 3, 2025 CFPB statement, President Trump designated Treasury Secretary Scott Bessent as CFPB Acting Director as of January 31. In the statement, Bessent said, “I look forward to working with the CFPB to advance President Trump’s agenda to lower costs for the American people and accelerate economic growth.” Bessent is expected to lead the CFPB on a temporary basis until a full-time director is nominated and confirmed.

Halt to Existing CFPB Proceedings

On February 3, 2025, Treasury Secretary and CFPB Acting Director Bessent halted all ongoing CFPB regulatory proceedings and litigation. Specifically, according to press reports, Bessent sent an email to staff directing them to stop work on all pending rulemakings, suspend the effective dates of final rules that have not gone into effect, and halt all enforcement activities and litigation.

Senate Hearing on Debanking

On February 5, 2025, the Senate Banking Committee held a hearing entitled “Investigating the Real Impacts of Debanking in America.” Testimony was heard from, among others, the CEO of Anchorage Digital, the only federally chartered crypto bank; the CEO of Old Glory Bank; and a representative of the Brookings Institution.

In a related development, on February 5, 2025, Senate Banking Committee Ranking Member Elizabeth Warren (D-Mass.) issued a press release on debanking that includes a letter she sent to President Trump on February 4, 2025. In the letter, Ranking Member Warren calls on President Trump to prevent the debanking of Americans.

SEC Crypto Task Force Update

As noted in our week 1 update, on January 21, 2025, SEC Acting Chairman Mark Uyeda announced the launch of a crypto task force (“Task Force”) to develop a regulatory framework for crypto assets, led by Commissioner Hester Peirce. On February 4, 2025, Commissioner Peirce issued a statement that outlines topics on which the Task Force will be working, including :

• Examining different types of crypto assets to determine their status under securities laws.
• Assisting with identification of areas that fall outside the SEC’s jurisdiction. In addition, the Task Force said it welcomes requests for no-action letters.
• Considering the possibility of recommending SEC action to provide temporary prospective and retroactive relief for coin or token offerings under certain circumstances.
• Considering a recommendation that the SEC modify existing paths to registration so that those interested in registering token offerings will have a viable path for doing so.
• Exploring possible updates to the special purpose broker-dealer no-action statement, including expansion to cover broker-dealers that custody crypto asset securities alongside crypto assets that are not securities.

The SEC has set up a dedicated Task Force web page and is soliciting industry input on its work.

FDIC Release of Crypto Supervision Documents

On February 5, 2025, FDIC Acting Chairman Travis Hill announced the release of 175 additional documents related to the agency’s supervision of banks that engaged in, or sought to engage in, crypto-related activities. Acting Chairman Hill said that he “directed staff to conduct a comprehensive review of all supervisory communications with banks that sought to offer crypto-related products or services. While this review remains underway, we are releasing a large batch of documents today, in advance of a court‑ordered deadline of Friday.”

DOGE Efforts Related to Financial Services

While it is still early days, the DOGE reportedly is considering actions that could have direct implications for the financial services industry. In particular, according to press reports, DOGE head Elon Musk has called for the elimination of the CFPB and discussed consolidation of the federal banking agencies. The DOGE is a temporary agency established by Executive Order 14158 and scheduled to terminate on July 4, 2026.

For more details on any of these developments, or to discuss how these changes may impact your business, please reach out to our team. Stay tuned for next week’s update, where we will continue to bring you the latest in federal financial services regulatory and related developments.

You may use the following links to access our prior issues:

FinReg Currents - Week 2 | Morrison Foerster

FinReg Currents - Week 1 | Morrison Foerster