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 April 4, Brandon Milhorn, president and CEO of the Conference of State Bank Supervisors (CSBS), delivered keynote remarks at the 2025 Fintech Conference hosted by the Federal Reserve Bank of San Francisco. Milhorn emphasized the importance of innovation in the financial services sector, drawing parallels between the entrepreneurial spirit of the 1849 California Gold Rush and today’s Silicon Valley. He highlighted the critical role of bank-fintech partnerships and the need for regulatory frameworks that support technological advancements, particularly for community banks facing numerous challenges. Milhorn also discussed the potential of distributed ledger technology and stablecoins to revolutionize the financial system, while cautioning against regulatory approaches that might stifle innovation. He called for targeted, risk-based operational guidance to foster a dynamic and resilient financial services marketplace. For more information, click here.
On April 4, the U.S. Securities and Exchange Commission’s (SEC) Division of Corporation Finance issued a statement to clarify the application of federal securities laws to certain types of stablecoins, specifically those designed to maintain a stable value relative to the USD on a one-for-one basis and backed by low-risk, liquid assets. The division concluded that the offer and sale of these “covered stablecoins” do not constitute the offer and sale of securities under the Securities Act of 1933 or the Securities Exchange Act of 1934. This determination is based on the characteristics of covered stablecoins, which are marketed for use in commerce rather than as investments, and are supported by reserves to ensure redemption on demand. The division’s analysis under the Reves and Howey tests further supports that covered stablecoins are not securities, as they are intended for commercial purposes and not for profit from investment. For more information, click here.
On April 2, the House Financial Services Committee approved a stablecoin bill with a 32-17 vote. The bill, which had stalled in Congress for years, gained renewed urgency following substantial crypto industry spending in the 2024 election and strong backing from President Donald Trump. The approval saw a coalition of Republicans and a few Democrats advancing the measure to the House floor for further consideration in the coming months. For more information, click here.
On April 1, Chairman French Hill (R-AR) and members of the House Committee on Financial Services sent letters to various federal agencies, requesting the rescission, modification, or re-proposal of specific actions taken by the Biden-Harris administration. These letters, addressed to the Federal Reserve Board, the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC), the Consumer Financial Protection Bureau (CFPB), and the Securities and Exchange Commission (SEC), argue that certain rules and guidance issued under the previous administration stifled competition and innovation, lacked proper cost-benefit analysis, and had significant negative economic consequences. The letters also highlight concerns about regulatory actions affecting digital assets and financial technology, urging a rollback to foster innovation and competition. Additionally, the committee requested that the Financial Stability Oversight Council (FSOC) rescind updated guidance that made it easier to subject nonbank financial companies to Federal Reserve supervision, advocating for a more holistic approach that emphasizes cost-benefit analysis. For more information, click here.
On April 1, the CSBS, a nationwide organization of state banking and financial regulators from all 50 states, the District of Columbia, and U.S. territories, has raised significant concerns regarding the current draft of the Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) Act. The STABLE Act of 2025, introduced by House Financial Services Committee Chairman French Hill (R-AR) and Digital Assets, Financial Technology, and Artificial Intelligence Subcommittee Chairman Bryan Steil (R-WI), aims to create a clear and consistent regulatory environment for digital assets. CSBS argues that “while the federal government stood largely idle or in opposition,” states have provided innovative frameworks for digital asset regulation. But, according to the CSBS, the STABLE Act would change that by “effectively centraliz[ing] power over a nascent industry in a single federal agency.” According to CSBS, this approach would undermine the strategic advantage of cooperative federalism. For more information, click here.
On March 31, the Federal Financial Institutions Examination Council (FFIEC) announced the availability of the 2024 Home Mortgage Disclosure Act (HMDA) Modified Loan Application Register (LAR) data on its HMDA Platform. This data, submitted by approximately 4,898 HMDA filers, includes loan-level information from financial institutions, modified to protect consumer privacy. The CFPB’s 2015 HMDA rule has made these data files accessible online. For more information, click here.
On March 31, the OCC announced its withdrawal from the interagency principles for climate-related financial risk management for large financial institutions. Acting Comptroller of the Currency Rodney E. Hood stated that the principles were overly burdensome and duplicative, emphasizing that the OCC’s existing guidance already requires banks to maintain a sound risk management framework that includes potential exposures to severe weather events or natural disasters. Hood reiterated the OCC’s commitment to ensuring regulatory requirements are effective without being excessive, while maintaining the safety, soundness, and fairness of the federal banking system. The OCC expects all banks to have effective risk management processes appropriate to their size, complexity, and the risk of their activities. For more information, click here.
On March 28, the Federal Reserve Board, the FDIC, and the OCC (together, the federal banking agencies) announced their intent to rescind the 2023 Community Reinvestment Act (CRA) final rule and reinstate the previous CRA framework. The CRA, enacted in 1977, was designed to address systemic inequities in access to credit by encouraging banks to meet the credit needs of their entire communities from which they draw deposits, including low- and moderate-income (LMI) areas, while adhering to safety and soundness principles. This decision comes in light of pending litigation in the Fifth Circuit by various banking trade associations contesting the rules by alleging regulatory overreach. The agencies stated they will continue to work together to promote a consistent regulatory approach to implementation of the CRA. For more information, click here.
On March 28, the Federal Reserve Board published a FEDS Note titled “Outlining and Measuring the Benefits of Risk Sensitivity in Bank Capital Requirements.” The note argues that aligning regulatory capital requirements with the riskiness of banks’ assets enhances the efficiency of these requirements. The note explains that risk-sensitive capital frameworks ensure that banks taking on higher risks are required to hold more capital, thereby internalizing their risk-taking and mitigating potential externalities from bank failures. The note also presents a conceptual framework for assessing the impact of risk sensitivity on the net benefits of capital requirements, finding that risk sensitivity increases these net benefits and can reduce the optimal level of capital needed. The discussion includes the benefits of risk sensitivity, criticisms of risk-based capital requirements, and a methodology for measuring the net benefits of risk-sensitive capital requirements. For more information, click here.
On March 27, Hood delivered remarks at the National Community Reinvestment Coalition’s Just Economy Conference, emphasizing the critical role of innovation in fostering financial inclusion. Hood highlighted his long-standing commitment to financial inclusion, describing it as the civil rights challenge of our generation. He discussed the importance of providing underserved communities with access to quality financial services, affordable credit, and financial literacy training. Hood also underscored the potential of financial technology (fintech) to enhance financial inclusion and the significance of homeownership in building generational wealth. He praised the OCC’s Project REACh for its success in developing innovative solutions to financial inclusion and announced the restructuring of an OCC office to drive collaborative efforts in this area. The new Office of External Relations and Strategic Partnerships, led by Andrew Moss, will focus on affordable homeownership, small business support, technology, and geographic-specific initiatives to promote economic opportunity and mobility. For more information, click here.
On March 26, the U.S. Department of Housing and Urban Development (HUD) Secretary Scott Turner announced a significant policy change by the Federal Housing Administration (FHA) to revise its residency requirements, effectively removing access for illegal immigrants and nonpermanent residents to FHA-insured mortgages. This policy update eliminates the “non-permanent residents” category from the Title I and Title II programs, ensuring that FHA-insured financing is exclusively available to U.S. citizens. The new policy, which takes effect on May 25, also impacts Deferred Action for Childhood Arrivals (DACA) recipients and individuals with pending asylum or refugee status. This move aligns with Trump’s executive orders on immigration and aims to prioritize American citizens in taxpayer-funded housing programs. For more information, click here.
State Activities:
On April 4, the California Department of Financial Protection and Innovation (DFPI) published a notice of proposed rulemaking to amend regulations under the Digital Financial Assets Law (DFAL). The proposed regulations aim to clarify the licensing process for entities engaging in digital financial asset activities, including exemptions from the Money Transmission Act, application requirements, and procedures for notifying the Department of changes. The DFPI has not scheduled a public hearing but will do so if requested in writing by May 4. Written comments on the proposed regulations can be submitted until May 19. For more information, click here.
On April 2, the California Senate Banking and Financial Institutions Committee passed Senate Bill No. 825, which aims to amend Section 90002 of the Financial Code, will now be re-referred to the Committee on Judiciary. SB 825 seeks to enhance consumer financial protection by clarifying that the California Consumer Financial Protection Law (CCFPL) does not prevent the commissioner of financial protection and innovation from enforcing provisions against unfair, deceptive, or abusive acts or practices (UDAAPs), even for those operating under certain licenses. This legislative move is in response to the diminished enforcement activities of the federal CFPB under the current administration. The bill also revises requirements for finance lenders to ensure that credit education programs are reviewed and approved by the commissioner, whether provided directly or by third parties. For more information, click here.
