FinReg Currents - Week 10

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:

• House Hearing on the Structure of the Consumer Financial Protection Bureau (CFPB)
• Financial Crimes Enforcement Network (FinCEN) Interim Beneficial Ownership Rule
• Office of the Comptroller of the Currency (OCC) Ceases Examinations for Reputational Risk
• Federal Deposit Insurance Corporation (FDIC) Upcoming Rulemaking on Reputational Risk
• Securities and Exchange Commission (SEC) Crypto Task Force Meeting

House Hearing on the Structure of the CFPB

On March 26, 2025, the House Financial Services Committee Subcommittee on Financial Institutions held a hearing, entitled “A New Era for the CFPB: Balancing Power and Reprioritizing Consumer Protections.” The hearing was held to examine the regulatory and legal landscape for federal consumer financial protection, the structure and funding of the CFPB, and the statutory authorities granted to the CFPB under the Consumer Financial Protection Act. The subcommittee also reviewed a number of related pending legislative proposals.

FinCEN Interim Beneficial Ownership Rule

On March 26, 2025, FinCEN published an interim final rule limiting the Corporate Transparency Act regulations and beneficial ownership information reporting requirements to foreign companies only. In the interim final rule, domestic companies, their beneficial owners, and U.S. persons are specifically excluded from the reporting requirement of beneficial ownership information. Foreign reporting companies with U.S. beneficial owners are not required to report these individuals. The rule became effective upon publication, and initial reports are due by April 25, 2025 for reporting companies already registered to do business in the U.S. Newly registered reporting companies will have 30 days to file an initial beneficial ownership information report. Comments on the interim final rule are due by May 27, 2025.

FinCEN did not comment on whether previously reported information for domestic companies and U.S. persons will be deleted, or how FinCEN will handle this information.

OCC Ceases Examinations for Reputational Risk

On March 20, 2025, the OCC announced that it will no longer examine its regulated institutions for reputation risk and has started removing references to reputation risk from the Comptroller’s Handbook booklets and guidance issuances. Although reputational risk will be removed from examination documents, the OCC states that it expects “banks [to] remain diligent and adhere to prudent risk management practices across all other risk areas.”

FDIC Upcoming Rulemaking on Reputational Risk

According to press reports, Acting FDIC Chairman Travis Hill stated in a March 24, 2025 letter to House Financial Services Oversight Subcommittee Chairman Dan Meuser (R-Pa.) that the FDIC is preparing a rule to eliminate reputational risk from supervisory activities. In addition, he said the FDIC is planning to “eradicate” reputational risk from agency materials, including examination manuals and guidance. Hill also voiced support for general supervisory reform to “focus more on core financial risks and less on process, administration, and documentation.” He clarified that the reform would likely take years but would include changes in examiner training and policy changes in the FDIC examination manual and CAMELS ratings.

In addition to reputational risk and supervisory reform, Hill wrote that the FDIC is in discussions with the President’s Working Group on Digital Asset Markets and the Treasury Department to modify digital assets policy, including “providing a pathway for banks to engage in digital asset and blockchain-related activities.”

SEC Crypto Task Force Meeting

On March 21, 2025, the SEC Crypto Task Force hosted a roundtable as part of its “Spring Sprint Toward Crypto Clarity” series. Former SEC Commissioner Troy Paredes led a wide-ranging panel discussion on how securities laws should approach crypto assets, with panelists from across industry and academia. In remarks at the roundtable, Acting Director Mark Uyeda discussed the application of the Howey test to crypto assets, and stated that the “notice-and-comment rulemaking or explaining the [SEC’s] thought process through releases” should have been considered in place of enforcement action. The head of the Crypto Task Force, Commissioner Hester Peirce, labeled the event “a restart of the [SEC’s] approach to crypto regulation.” Commissioner Caroline Crenshaw cautioned against changing the definition of a security for crypto assets, as a modified definition could allow evasion of the law. On March 25, 2025, the SEC Crypto Task Force announced four additional roundtables over the next three months, each focused on a different aspect of digital assets.

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 9 | Morrison Foerster
• FinReg Currents – Week 8 | Morrison Foerster
• FinReg Currents – Week 7 | Morrison Foerster
• FinReg Currents – Week 6 | Morrison Foerster
• FinReg Currents – Week 5 | Morrison Foerster
• FinReg Currents – Week 4 | Morrison Foerster
• FinReg Currents – Week 3 | Morrison Foerster
• FinReg Currents – Week 2 | Morrison Foerster
• FinReg Currents – Week 1 | Morrison Foerster