CTA Is Pausing Fines, Penalties and Enforcement Actions Regarding Filing of Beneficial Ownership Information Reports
Below is a statement from the Financial Crimes Enforcement Network (FinCEN) released February 27, 2025 stating it will not take any enforcement action against a Reporting Company that fails to file or update a beneficial ownership information report per the Corporate Transparency Act, pending the release of a new “interim final rule.” FinCEN intends to issue this interim final rule (which will extend the reporting deadline) prior to the current reporting deadline of March 21, 2025. We will continue to monitor for updates. For now, however, failure to file will not result in fines, penalties or any other enforcement actions.
FinCEN Not Issuing Fines or Penalties in Connection with Beneficial Ownership Information Reporting Deadlines
Immediate release: February 27, 2025
WASHINGTON –– Today, FinCEN announced that it will not issue any fines or penalties or take any other enforcement actions against any companies based on any failure to file or update beneficial ownership information (BOI) reports pursuant to the Corporate Transparency Act by the current deadlines. No fines or penalties will be issued, and no enforcement actions will be taken, until a forthcoming interim final rule becomes effective and the new relevant due dates in the interim final rule have passed. This announcement continues Treasury’s commitment to reducing regulatory burden on businesses, as well as prioritizing under the Corporate Transparency Act reporting of BOI for those entities that pose the most significant law enforcement and national security risks.
No later than March 21, 2025, FinCEN intends to issue an interim final rule that extends BOI reporting deadlines, recognizing the need to provide new guidance and clarity as quickly as possible, while ensuring that BOI that is highly useful to important national security, intelligence, and law enforcement activities is reported.
FinCEN also intends to solicit public comment on potential revisions to existing BOI reporting requirements. FinCEN will consider those comments as part of a notice of proposed rulemaking anticipated to be issued later this year to minimize burden on small businesses while ensuring that BOI is highly useful to important national security, intelligence, and law enforcement activities, as well to determine what, if any, modifications to the deadlines referenced here should be considered.
Alexander Lovrine and Walter Weinberg contributed to this article.
SEC Provides Welcome Clarity Regarding Meme Coins
In welcome news, the US Securities and Exchange Commission (SEC) Division of Corporation Finance (Division) yesterday announced “[a]s part of an effort to provide greater clarity” that meme coins do not involve the offer and sale of securities under the federal securities laws. This is to say that transactions in meme coins (as defined below) do not need to be registered with the SEC, but also that buyers and sellers are not protected by federal securities laws. Importantly, the Division limited this interpretation to meme coins that match the following descriptions:
A type of crypto asset inspired by internet memes, characters, current events, or trends for which the promoter seeks to attract an “enthusiastic online community”
Similar to collectibles, meme coins are typically purchased for entertainment, social interaction, and cultural purposes, and their value is driven primarily by market demand and speculation
Meme coins typically have “limited or no use or functionality”
Because they are speculative in nature, meme coins tend to experience significant market price volatility, and often are accompanied by statements regarding their risks and lack of utility
Based on these descriptions, it is likely that some of the most popular meme coins (Dogecoin, Shiba Inu, Pepe, as well as the Official Trump and Official Melania coins) would be considered outside of the SEC’s jurisdiction when transacted in spot markets.
Inherently, by virtue of being classified as non-securities by the SEC, meme coins will generally be categorized as “commodities,” subject to the Commodity Exchange Act and the enforcement jurisdiction of the CFTC. As with other commodities, including wheat, copper, oil and bitcoin, the CFTC is authorized to prosecute manipulation and fraud in these markets, but does not have broader regulatory oversight as it does with derivatives markets.
That said, while the regulatory clarity provided by the SEC is highly anticipated and desired by the crypto industry, it is also worth noting that meme coins have already been considered by many to be “commodities.” Derivatives contracts on certain meme coins have been listed on CFTC-registered derivatives exchanges for some time suggesting that the CFTC, at least, already considers these to be within its purview.
The Division received a noteworthy statement of opposition from Commissioner Caroline Crenshaw, who posited that “the guidance offers no clear definition from law or even a basic dictionary” and called the value of the guidance “questionable.” In Commissioner Crenshaw’s view, the universe of meme coins is diverse, with a “continuum of offers and sales,” and the Supreme Court’s Howey test for investment contracts requires an individualized inquiry into each unique crypto asset.
With so many changes to come under the new Trump administration, we will be following this and other regulatory developments related to digital assets closely.
President Trump Addresses EB-5 Green Card Program and Proposes New Gold Card Immigration Program
On Feb. 25, 2025, President Trump announced that he will seek to end the U.S. EB-5 Immigrant Investor Program, which provides foreign investors with permanent residency in the United States. The EB-5 program requires a foreign national to invest in U.S. businesses that create 10 or more jobs per investor. The program has an investment amount of $1,050,000 that can be reduced to $800,000 if the investment is made in a high unemployment area, rural area, or through a government infrastructure project. Investors and their dependents are able to attain U.S. citizenship after five years of permanent residency.
Trump’s announcement aims to replace the EB-5 visa with a “Gold Card” program, which the president stated would require an investment of $5 million and that would grant “green card plus benefits,” including a path to citizenship, which the EB-5 program already provides. No further details were given, although in his announcement he noted that a detailed plan would be published in the next two weeks. According to the president, the goal is to attract wealthy people to the United States that would create businesses and help reduce the country’s deficit.
However, the president does not have the authority to ignore or override an act of Congress, including the Immigration and Nationality Act. Congress is given the authority to pass immigration laws that control admission, exclusion, and naturalization. This power is based on the Constitution’s Article 1, Section 8, Clause 18, which gives Congress the power to make laws that are necessary and proper to carry out the Constitution’s power. Likewise, the Supreme Court has ruled that Congress has “plenary” power over immigration, which means that Congress has almost complete authority over the passage of immigration laws. In 2022, Congress reauthorized the EB-5 program through Sept. 30, 2027, with the passage of the EB-5 Reform and Integrity Act. The president does not have authority to strike down an act of Congress, including the existing EB-5 program. Likewise, Congress has exclusive control over the allocation of employment based green card numbers and any change to that would need to be done by amending the Immigration and Nationality Act. The president can propose new immigration legislation, but only Congress can make new laws and amend existing laws. The president also has the authority to enforce immigration laws through agencies like U.S. Citizenship and Immigration Services, U.S. Immigration and Customs Enforcement, and U.S. Customs and Border Protection. Any attempt to strike down the EB-5 program may be met with immediate judicial action to enjoin and strike down any such proposal.
FDIC Withdraws Support for Colorado’s Opt-Out Law Before Tenth Circuit
On February 26, the FDIC withdrew its amicus brief in the 10th Circuit Court of Appeals challenging Colorado’s 2023 opt-out law which aimed to restricting higher-cost online lending. The FDIC’s decision follows a shift in the agency’s leadership and marks a departure from the previous administration’s position supporting Colorado’s interpretation of the Depository Institutions Deregulation and Monetary Control Act (DIDMCA).
Colorado’s opt-out law invokes a provision of DIDMCA that allows states to exclude themselves from the federal interest rate exportation framework, which enables banks to lend nationally at rates permitted by their home states. The law seeks to apply Colorado’s interest rate caps—some as low as 15%—to all loans made to Colorado residents, including those issued by out-of-state banks in partnership with fintech firms.
A coalition of industry groups challenged the law, arguing that Colorado is overstepping its authority by attempting to regulate lending that occurs outside the state. In June 2024, a federal district court sided with the industry groups, ruling that a loan is made where the lender performs its loan-making functions rather than where the borrower is located. The court issued a preliminary injunction preventing Colorado from enforcing the law against out-of-state lenders.
The FDIC initially supported Colorado’s position, arguing in its amicus brief that, for purposes of DIDMCA’s opt-out provision, a loan can be considered “made” where the borrower is located. However, citing a recent change in administration, the agency withdrew its brief before the Tenth Circuit could hear oral arguments in Colorado’s appeal.
Putting It Into Practice: The withdrawal follows the FDIC’s transition to Republican-led leadership under Acting Chairman Travis Hill, who has signaled a more favorable stance toward bank-fintech partnerships (previously discussed here). With oral arguments set for March 18, a ruling upholding Colorado’s law could inspire similar state restrictions, while a decision favoring industry plaintiffs would reaffirm federal rate exportation rules under the DIDMCA.
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CFPB Drops Lawsuit Against Online Lender Following Litigation Freeze
On February 23, the CFPB filed a joint stipulation in the United District Court for the Central District of California to dismiss its lawsuit against an online lending platform. The lawsuit, originally filed in May 2024, alleged that the platform misled borrowers about the total cost of its loans in violation of the Fair Credit Reporting Act (FCRA) and the Consumer Financial Protection Act (CFPA).
The dismissal follows a broader litigation freeze ordered by CFPB Acting Director Russ Vought (previously discussed here). The CFPB had previously sought a stay in the case against the online lending platform, but the U.S. district court judge denied the request, stating that there was “no good cause shown”.
The original lawsuit raised allegations concerning the platform’s lending practices, including:
Deceptive advertising of loan terms. The platform advertised its loans of having no interest or 0% APR while almost all loans required borrowers to pay lender tip fees or platform donation fees, significantly increasing the cost of borrowing.
Misleading loan disclosures. Borrowers were provided promissory notes and Truth in Lending disclosures that incorrectly stated loan costs, failing to include lender tip fees and platform donation fees.
Obscuring fee opt-outs. The platform allegedly designed its loan request process to obscure the “no donation” option, requiring borrowers to select a pre-set donation amount, interfering with their ability to understand loan terms.
Unlawful collection practices. The CFPB alleged that the platform attempted to collect payments on loans that were void or uncollectible under certain state usury or lender-licensing laws, misrepresenting borrowers’ repayment obligations and threatening negative credit reporting despite not actually reporting to credit bureaus.
Putting It Into Practice: Although the CFPB has dismissed the lawsuit, the issues raised in the case remain relevant for fintechs relying on nontraditional fee models (previously discussed here). While the lawsuit did not result in a legal determination, the CFPB’s approach underscores the risk for other companies operating under similar business models, particularly earned-wage access providers that rely on voluntary tips as state regulators have been active in this space (see prior discussions here and here). Fintechs should closely monitor enforcements like this matter and how the new administration approaches these issues.
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Federal Court Pauses Open Banking Rule Litigation
On February 25, a federal judge in the United District Court for the Eastern District of Kentucky approved a joint motion between the CFPB and banking trade groups to pause litigation over the agency’s 1033 open banking rule. The lawsuit challenges the CFPB’s rule requiring banks to allow consumers to share deposit and credit card account information with third-party fintech providers.
The banking trade groups argue that the CFPB’s regulation surpasses its authority under Section 1033 of the Dodd-Frank Act, contending that the rule places an excessive regulatory burden on banks while disproportionately benefiting fintech companies. The lawsuit was filed in October 2024, the same day the CFPB finalized the rule.
The rule (previously discussed here) establishes a framework requiring financial institutions to allow consumers to securely share account data with external fintech services. Under the rule, data providers must make the following covered data available: (i) transaction details; (ii) account balances; (iii) information for initiating payments to or from a Regulation E account; (iv) available terms and conditions; (v) upcoming bill details; and (vi) basic account verification information, such as name, address, email, phone number, and, if applicable, account identifier.
The rule requires data providers to authenticate consumers before sharing requested information and honor data requests from third parties as authorized by the consumer. They must also offer a way for consumers to revoke third-party data access and keep records of any denied data requests. Data providers need written policies to ensure compliance and must retain records for three years.
Putting It Into Practice: The agreed upon litigation pause delays the lawsuit challenging the rule (previously discussed here), but does not alter the compliance deadlines, the first of which remains set to begin on April 1, 2026. The pause allows time for the CFPB, under Acting Director Russel Vought, to assess the open banking rule and determine whether it aligns with the new administration’s policy objectives. The rule had bipartisan support so it will be interesting to see what happens. We will keep monitoring this space for developments.
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Class Action Certified Against Fintech Lender for Home Improvement Loans
In an order issued in January and made public on February 24, a judge in the United States District Court for the Northern District of California granted class certification to consumers alleging a fintech lender’s loan transaction fees were imposed unlawfully, while also granting summary judgment to the lender on claims regarding performance fees due to insufficient evidence.
The lender partnered with contractors and banks to provide point-of-sale loans to consumers for home-improvement and home-maintenance projects. The contractors used a technology platform developed by the fintech lender to offer financing offers to the consumer. The complaint alleges, among other claims, that the company violates California’s Credit Services Act, including by collecting transaction and performance fees, failing to provide specific disclosures, and failing to register with the California Department of Justice. It also alleges the company violates California’s Unfair Competition Law by violating the Credit Act and by violating the California Financing Law by not being licensed.
The court certified a class of California borrowers who took out consumer program loans of $500 or more from January 9, 2016 onward, where the loan was subject to a transaction fee of at least 1% of the principal amount. The court determined that the case met the necessary legal standards for class action status, including sufficient class size and commonality of claims.
The court also rejected the lender’s request for summary judgement on plaintiffs’ transaction fee claims, affirming that the fees may have been indirectly passed to consumers through higher project costs. The court determined that plaintiffs had provided sufficient evidence supporting these claims, allowing the case to proceed.
Conversely, the court granted summary judgment in favor of the lender on claims related to performance fees, determining that plaintiffs had failed to establish a direct financial impact on borrowers. While plaintiffs suggested that these fees contributed to increased interest rates, the court found no clear evidence supporting this assertion.
Putting It Into Practice: The case highlights the ongoing scrutiny of fintech lending models, particularly with respect to fee disclosures and cost pass-through mechanisms. Lenders should continue to monitor developments in this space; while federal enforcement agencies may step back, we expect the plaintiffs’ bar to continue to be active.
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Important Update – FinCEN Currently Not Issuing Fines or Penalties in Connection with CTA Reporting Deadlines (February 27, 2025 Edition)
On February 27, 2025, FinCEN issued a release providing that “it will not issue any fines or penalties or take any other enforcement actions against any companies based on any failure to file or update beneficial ownership information reports pursuant to the Corporate Transparency Act by the current [March 21, 2025] deadlines.” FinCEN further noted that “[n]o later than March 21, 2025, FinCEN intends to issue an interim final rule that extends BOI reporting deadlines [ …]”
In its release, FinCEN provides that it “intends to solicit public comment on potential revisions to existing BOI reporting requirements. FinCEN will consider those comments as part of a notice of proposed rulemaking anticipated to be issued later this year to minimize burden on small businesses while ensuring that BOI is highly useful to important national security, intelligence, and law enforcement activities [ …]”
As suggested by FinCEN, the upcoming timeline is as follows:
Now (as of February 27, 2025): FinCEN will not issue fines or penalties for failures to file, correct or update beneficial ownership information (BOI) reports by current deadlines and therefore filing, while mandatory, is at your discretion as to timing for the moment.
By March 21, 2025: FinCEN expressed its intent to issue an interim final rule extending certain, as yet undisclosed, BOI reporting deadlines.
Later in 2025: FinCEN expressed its plans to solicit public comments on potential revisions to BOI reporting requirements and issue a notice of proposed rulemaking.
Because FinCEN has committed not to enforce the CTA until after new forthcoming reporting deadlines have passed, it is necessary to pay careful attention to CTA updates as they develop.
California DFPI Reaches Settlement with Lender Over Crypto-Backed Loans
On December 23, 2024, the California Department of Financial Protection and Innovation (DFPI) announced a consent order with a lender to resolve its investigation into the company’s crypto-backed lending program, which the DFPI alleged violated multiple provisions of the California Financing Law. As part of the settlement, the lender has agreed to issue $162,800 in borrower refunds and pay $137,500 in penalties, while also implementing stricter underwriting standards, enhanced risk disclosures, and additional consumer protections.
The lender provides financial services related to crypto assets, including offering loans backed by cryptocurrency collateral. Between November 2019 and November 2022, the company issued 342 loans to 151 California residents, allowing borrowers to pledge crypto assets in exchange for fiat or crypto loans.
The DFPI found that the lender violated the California Financing Law in several ways including:
Failing to adequately assess borrowers’ ability to repay loans;
Misrepresenting annual percentage rates (APRs), leading to understated costs for consumers;
Charging undisclosed administrative fees to borrowers; and
Failing to maintain the required minimum net worth of $25,000 between October 2022 and April 2023.
Under the consent order, the lender must:
Issue refunds to eligible California borrowers and notify them via email about their refund amount and instructions for claiming it;
Send notices to California borrowers with active loans, providing information on how to close their loans; and
Comply with enhanced consumer protections, including improved underwriting and risk disclosure practices.
Putting it Into Practice: The DFPI’s action underscores increased regulatory scrutiny of crypto-backed lending programs and reinforces the expectation that crypto lenders must adhere to traditional consumer protection laws. For crypto lenders and financial institutions offering similar products, ensuring full compliance with lending regulations—including proper loan disclosures, accurate APR calculations, and borrower ability-to-repay assessments—will be critical to avoiding regulatory action. Market participants should take note of this case as a signal that state regulators are actively enforcing lending laws in the crypto space.
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EPA OIG Publishes Independent Audit of EPA’s FYs 2022 and 2021 (Restated) TSCA Service Fee Fund Financial Statements
On February 26, 2027, the U.S. Environmental Protection Agency’s (EPA) Office of Inspector General (OIG) published a report entitled Independent Audit of the EPA’s Fiscal Years 2022 and 2021 (Restated) Toxic Substances Control Act Service Fee Fund Financial Statements. Under the Toxic Substances Control Act (TSCA), as amended by the Frank R. Lautenberg Chemical Safety for the 21st Century Act, EPA is required to prepare and OIG to audit the accompanying financial statements of the TSCA Service Fee Fund. OIG rendered a qualified opinion on EPA’s fiscal years (FY) 2022 and 2021 TSCA Service Fee Fund financial statements, “meaning that, except for material errors in expenses and income from other appropriations and earned and unearned revenue, the statements were fairly presented.” OIG noted the following:
Material weaknesses: EPA materially understated TSCA income and expenses from other appropriations and EPA materially misstated TSCA earned and unearned revenue;
Significant deficiency: EPA needs to improve its financial statement preparation process; and
Noncompliance with laws and regulations: EPA did not publish an annual chemical risk evaluation plan for calendar year 2022.
OIG states that during its user fee analysis, it found that the TSCA fee structure in the fees rule for FY 2022 “appeared reasonable based on the data available when the EPA developed the fees rule.” According to OIG, the TSCA fees collected “adequately offset the actual or projected costs of administering the provisions of TSCA for the three-year period.” The fees collected in FYs 2020 – 2022 met the intent of TSCA to defray 25 percent of the specified costs of carrying out Sections 4 and 5, parts of Section 6, and Section 14.
OIG recommends that the chief financial officer:
Correct the calculation in the on-top adjustment for income and expenses from other appropriations;
Provide training for calculating the TSCA income and expenses from other appropriations on-top adjustment;
Correct the TSCA revenue balances;
Develop and implement accounting models for TSCA revenue-related activity;
Develop and implement a plan to strengthen and improve the preparation and management review of the financial statements; and
Correct other errors in the TSCA financial statements.
OIG recommends that the Assistant Administrator for Chemical Safety and Pollution Prevention develop and implement a plan to publish chemical risk evaluation plans at the beginning of each calendar year. EPA agreed with OIG’s recommendations and provided estimated completion dates for corrective actions.
Bankers Bond Insurance: Key Coverage Issues for Financial Institutions to Consider
Bankers blanket bond insurance—also referred to as bankers bonds, fidelity bonds, or financial institution bonds—provides financial institutions with protection against direct financial loss sustained as a result of criminal activity. Bankers bonds often cover:
losses caused through dishonesty of employees;
losses arising out of counterfeit currency;
loss in transit, including theft or physical destruction of property during transportation;
losses caused by computer systems fraud;
losses caused by unauthorized signatures; and
losses caused by forged checks.
Bankers bonds have several unique features different from many other insurance types because they protect against losses incurred as a direct result of fraudulent or criminal activities from within the company. While most bankers bonds are already tailored to protect companies operating within the financial sector, they are a highly customizable risk management solution. Depending on the jurisdiction, financial institutions may be required to purchase a bankers bond to operate.
While coverage depends on the specific facts, policy language and circumstances giving rise to the loss, bankers bond claims present a number of recurring issues that can result in coverage disputes. Below are several key issues to consider:
Discovery and Notice. Unlike other coverages, which may turn on when an accident occurred or whether a claim was first made, bankers bonds typically apply based on whether the loss was first “discovered” during the policy period. Because discovery triggers coverage, the timing of when the company first becomes aware of a covered loss can become a contested issue if, for example, the insurer contends it occurred before the inception of the bond or if notice was not given in a timely manner.
The meaning of “discovery” is often defined in the bond, and small changes can impact whether or not a loss is covered. Whose knowledge is relevant for the purpose of discovery? What standard measures whether those individuals should assume a particular loss is covered? Does the bond distinguish between knowledge gained by facts versus receipt of actual or potential claims? The way bankers bonds address these and many other questions can often decide whether a loss is covered.
Endorsements, Riders and Policy Customization. Bankers bonds are as varied as the financial institutions that buy them. That means that bonds are not one-size-fits-all and can be heavily negotiated to provide greater and different coverages than what may be available “off the rack.” These modifications are often accomplished through endorsements (or “riders”) modifying or expanding coverage.
Banks can secure riders for a variety of different risks—reward payments, debit cards, safe deposit boxes, transit cash letters, unauthorized signatures, warranty statements, automated teller machines, audit and examination expenses, check kiting and email transfer fraud, just to name a few. Riders can even allow banks to recover “claim expenses,” including legal fees, incurred in preparing and submitting covered claims for loss under the bond. Even the riders themselves are negotiable and can be modified.
Causation. Many bankers bonds require that the policyholder show that a loss “resulted directly from” dishonest, criminal or malicious conduct. While this kind of causation language is common, disputes nevertheless arise over whether the offending conduct and loss are close enough in the timeline of events to fit within the bond’s insuring agreement. For example, an insurer may contest whether a virus that infected the bank’s computers is close enough in time or sequence to resulting loss to constitute covered computer systems fraud. In cases of employee dishonesty and fraud, financial institutions should be mindful of the bond’s direct causation requirement.
Exclusions. Insuring agreements covering dishonest acts by employees often include significant carve outs that limit otherwise broad coverage for things like loans and trading losses. Those carve outs also can have important carve backs that preserve coverage if certain conditions are met. For example, most bonds will exclude losses resulting from loans, unless the dishonest employee was in collusion with parties to the loan transaction and received some kind of improper financial benefit. But some bonds place monetary thresholds on the financial benefit required to preserve coverage or presume the requisite benefits were obtained under certain circumstances. Paying close attention to carve outs and exceptions and, if needed, negotiating broader coverage can strengthen critical protections against fidelity claims involving employees.
Actual Loss. An important threshold question in any bankers bond claim is whether a loss actually occurred. Despite the repeated use of “loss,” many bankers bonds do not define the word, leaving it to courts to do so in the event of a dispute. One common theme in those disputes is whether the entity suffered an actual—rather than a theoretical—loss. In Cincinnati Insurance Co. v. Star Financial Bank, for example, the Seventh Circuit defined “loss” as an “actual present loss, as distinguished from a theoretical or bookkeeping loss.” 35 F.3d 1186, 1191 (7th Cir. 1994). Policyholders should be prepared to show an identifiable “loss” was suffered.
Cyber-Related Events. Given the proliferation of cybersecurity incidents and related exposures across all industries, including finance, bankers bonds have increasingly offered expanded coverage for cyber-related losses. In some instances, coverage between a cyber policy and a crime policy, like a bankers bond, may overlap.
But bankers bonds can provide critical coverage for a financial institution’s direct financial loss arising from a host of cyber incidents. Bonds can extend coverage to include perils such as extortion (including cyber-related extortion and ransomware) and erroneous transfer, social engineering fraud, computer fraud and similar cyber risks. Financial institutions should coordinate coverage between all policies, including bankers bonds and cyber policies, to ensure adequate protection from cyber risks and avoid gaps in coverage.
This non-exhaustive list highlights several common issues of focus to negotiate robust coverage for a range of risks under bankers bonds. The best time to assess those risks is before discovery of a loss or receipt of a claim. Financial institutions should be proactive in their pursuit of insurance and mindful of these key coverage issues relating to bonds. Retaining experienced coverage counsel, insurance brokers and other risk professionals during bond placement (and renewal) and early in the claims process can help maximize recoveries.
New CFPB Director Testifies on Agency Leadership and Enforcement Approach
On February 27, new CFPB Director Jonathan McKernan testified before the Senate Banking Committee, emphasizing his commitment to enforcing the law while operating within the confines of the law. His testimony focused on his commitment to enforcing the law within the framework of the Dodd-Frank Act and maintaining the agency’s core functions while exploring ways to enhance efficiency.
During his confirmation hearing, McKernan acknowledged that the CFPB director has the authority to adjust funding levels and streamline operations, which could impact staffing and enforcement priorities. When pressed by Democrats about potential external influence from outside groups or the White House, McKernan insisted that, if confirmed, he would be the one making decisions at the agency. He also pledged to maintain its complaint database and other required offices and functions.
Shortly before McKernan’s hearing, the CFPB dismissed several enforcement actions, including one against a mortgage lender of manufactured housing (previously discussed here). These dismissals have prompted discussions about potential shifts in the agency’s regulatory approach. Democratic senators used the hearing to question how these developments might align with McKernan’s espoused leadership approach at the CFPB.
In response, McKernan stated that any enforcement decisions under his leadership would be based on legal merits and resource considerations, emphasizing his commitment to ensuring that regulatory actions remain within statutory mandates while fostering a balanced and fair approach.
Putting It Into Practice: McKernan’s regulatory agenda, particularly his views on funding and enforcement policies, could lead to significant changes for financial institutions. The recent dismissal of multiple enforcement actions (previously discussed here) underscores the possibility of a shift in the Bureau’s oversight priorities. Financial institutions should closely monitor these developments to assess how regulatory expectations and compliance obligations may evolve under McKernan’s leadership.
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