FinReg Currents

Keep up with the latest legal and industry insights, news, and events from MoFo

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:

Senate Nomination Hearing on Consumer Financial Protection Bureau (CFPB) Director Nominee Jonathan McKernan

Senate Passage of CRA Resolution on CFPB Digital Payment Apps Rule

House Financial Services Committee Markup of Congressional Review Act (CRA) Overdraft Resolution
Federal Deposit Insurance Corporation (FDIC) Proposed Rules Dropped and Compliance Date Extended

CFPB Open Banking Rule Paused
CFPB Enforcement Actions Dismissal
Treasury Department Halt of Corporate Transparency Act (CTA) Beneficial Ownership Reporting Enforcement for U.S. Companies
Securities and Exchange Commission (SEC) Dismissal of Cryptocurrency-Related Enforcement Actions
SEC Staff Statement on Meme Coins

Senate Nomination Hearing on CFPB Director Nominee Jonathan McKernan

At a February 27, 2025 nomination hearing, CFPB director nominee Jonathan McKernan gave a statement before the Senate Banking Committee. Throughout the hearing, McKernan’s prepared statement and responses to questions centered on following the law and the CFPB’s statutory mandate. Prior to his nomination to be CFPB director, McKernan was a member of the board of directors of the FDIC. The Senate Banking Committee plans to consider his nomination in an executive session on March 6, 2025.

Senate Passage of CRA Resolution on CFPB Digital Payment Apps Rule

On February 27, 2025, Senator Pete Ricketts (R-Neb.) and Representative Mike Flood (R-Neb.) introduced companion CRA resolutions, S.J. Res. 28 and H.J. Res. 64, to nullify the CFPB rule entitled “Defining Larger Participants of a Market for General-Use Digital Consumer Payment Applications.” The rule was finalized on November 21, 2024, and became effective January 9, 2025. House Majority Leader Steve Scalise (R-La.) had included the rule on his February 20, 2025 list of potential CRA targets. On March 5, 2025, the full Senate passed S.J. Res. 28 by a vote of 51-47. No action has yet been taken on H.J. Res. 64.

House Financial Services Committee Markup of CRA Overdraft Resolution

On March 5, 2025, the House Financial Services Committee held a markup of H.J. Res. 59, the CRA resolution disapproving the CFPB rule entitled “Overdraft Lending: Very Large Financial Institutions.” In his opening statement, Committee Chairman French Hill (R-Ark.) said that “[t]he CFPB’s misguided overdraft rule imposes a government mandated price cap that would reduce consumer choice, deny this needed service to our citizens, and stifle innovation.” Chairman Hill cited a Federal Reserve Bank of New York staff report on overdraft fee ceilings and the unbanked, which states that “overdraft fee caps hinder financial inclusion.” The Committee approved H.J. Res. 59 to be favorably reported to the full House of Representatives for consideration by a vote of 30 to 19.

FDIC Proposed Rules Dropped and Compliance Date Extended

On March 3, 2025, the FDIC voted via notational vote to rescind the 2024 Statement of Policy on Bank Merger Transactions, delay compliance dates for certain digital sign requirements, and withdraw four proposed rules.

On an interim basis, the FDIC proposed reinstating the Merger Policy Statement used prior to 2024 and a broader return to the historic approach. The FDIC expects to release a comment request on the bank merger regulatory framework and eventually “comprehensively revise” the policy. Comments on the proposal to rescind the 2024 Statement of Policy will be due 30 days after publication in the Federal Register.

When announcing the delay in certain compliance dates for digital sign requirements to March 1, 2026, the FDIC stated that it will use the extra time to propose changes to the rule to address implementation issues. The compliance date delay applies only to the requirement to display the FDIC official sign on the depository institution’s digital channels, ATMs, and similar devices.

The FDIC withdrew proposed rules on brokered deposits, corporate governance and risk management, the Change in Bank Control Act, and incentive-based compensation agreements. If the FDIC decides to pursue these rulemakings in the future, it will have to issue new proposed rules and seek comment.

CFPB Open Banking Rule Paused

According to press reports, on February 25, 2025, the CFPB and banking trade groups agreed to pause the CFPB open banking rule while the CFPB determines whether the agency will continue to support the rule under the new administration. The order from the Eastern District of Kentucky stays litigation proceedings, moves scheduling deadlines back 30 days, and incorporates a 30-day tolling of the plaintiffs’ compliance deadlines under Rule 1033. Because many of the plaintiffs’ compliance deadlines do not begin until April 2026 or beyond, the tolling is unlikely to have a major effect. The joint motion to stay proceedings indicates that the “CFPB’s new leadership needs time to review and consider the CFPB’s position on various pending agency actions and recently finalized rules, including the rule Plaintiffs challenge here.” The Trump administration and CFPB Acting Director Russell Vought have not yet disclosed whether they will support the open banking rule.

CFPB Enforcement Actions Dismissal

Over the past week, according to press reports, the CFPB has filed joint stipulations of voluntary dismissal for its enforcement actions against Early Warning Services, Capital One, TransUnion, Rocket Homes, and companies in four other enforcement actions. The cases are reported to have been dropped with prejudice, which ensures that the cases cannot be revived against the companies at a later date. The CFPB reportedly has not provided rationale for its dismissals.

Treasury Department Halt of CTA Beneficial Ownership Reporting Enforcement for U.S. Companies

On March 2, 2025, the Treasury Department determined that it will “not enforce any penalties or fines associated with the beneficial ownership information reporting rule” under current deadlines. Further, there will be no enforcement against U.S. citizens or domestic companies or beneficial owners even after the upcoming rule changes. The Treasury Department will also issue a proposed rule to ensure that the rule is narrowed to cover only foreign companies.

In an announcement on February 18, 2025, the Financial Crimes Enforcement Network (FinCEN) had pushed back deadlines for the majority of reporting companies to file a beneficial ownership report to March 21, 2025. On February 27, 2025, the agency also signaled its intent to issue an interim rule to further extend reporting deadlines while also providing new guidance for compliance. Both the Treasury Department and FinCEN pointed to the Trump administration’s desire to limit regulatory burdens on U.S. businesses in justifying the moves.

SEC Dismissal of Cryptocurrency-Related Enforcement Actions

On February 27, 2025, the SEC announced the dismissal of its enforcement action against Coinbase, as the agency’s newly formed Crypto Task Force helps to develop a clear digital asset framework. In a statement following the dismissal, SEC Commissioner Hester Peirce, leader of the Crypto Task Force, voiced her concern about the SEC’s initial action against Coinbase, characterizing the action as part of the “Commission’s larger strategy to use its enforcement tool to regulate the crypto industry.” The SEC’s press release announcing the dismissal of the Coinbase action – which did not contain any allegations of fraud – noted that the newly formed Cyber and Emerging Technologies Unit “will root out those seeking to misuse innovation to harm investors, including fraud involving blockchain technology and crypto assets.” Both Kraken and Consensys have also announced that the SEC has agreed to dismiss pending lawsuits. Finally, according to media reports, the SEC has closed crypto investigations into a number of digital asset companies, including Robinhood, Uniswap Labs, Gemini, OpenSea, and Yuga Labs.

SEC Staff Statement on Meme Coins

On February 27, 2025, the SEC Division of Corporation Finance released a Staff Statement on meme coins. The Division defines meme coins as a type of crypto asset inspired by internet trends or culture whose value is driven by the market but have little use or function. The Staff Statement finds that meme coins “do not involve the offer and sale of securities under the federal securities laws” because a meme coin does not ensure rights to a future profit or asset. As such, those involved in their sale do not need to register with the SEC. However, the statement points out that fraud in the offer and sale of meme coins is subject to enforcement action by other federal or state agencies.

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.

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