- Podcast Episode: A Deep Dive Into the Fight for the CFPB’s Survival
- Podcast Episode: Do Arbitrators Follow the Law? A New Study Provides Data, but the Debate Continues
- Don’t Miss Our Exclusive Webinar on President Trump’s Debanking Executive Order
- CFPB Seeks Comments on Raising ‘Larger Participant’ Thresholds
- SBA Directs Financial Institutions to End, Correct Debanking Actions
- Plaintiffs Ask for Delay in Compliance Dates for CFPB Open Banking Rule
- CFPB Invites Comments on New Section 1033 ‘Open Banking’ Rule
- Appeals Court Issues Stay Keeping Harper and Otsuka Off NCUA Board
- Republican Senators Ask Financial Regulators to Overhaul Matters Requiring Attention Process
- CFPB Drops Probe of Credova Financial LLC, Saying It Was Politically Motivated ‘Debanking’
- 2025 HR Legal Summit: Sessions and Speakers Announced
- Ballard Spahr Event: Wage and Hour Update for Business
- Looking Ahead
Podcast Episode: A Deep Dive Into the Fight for the CFPB’s Survival
We recently wrote about the August 15th D.C. Circuit Court of Appeals decision in the lawsuit brought by the labor unions representing CFPB employees against Acting Director Russell Vought. The unions sought injunctive relief in response to what they described as an attempted “shutdown” of the Bureau.
In a 2–1 ruling, the Court of Appeals vacated a preliminary injunction issued by the District Court. That injunction had temporarily blocked the CFPB from carrying out a reduction-in-force (RIF) that would have left the Bureau with only about 200 employees to carry out its statutory responsibilities.
Today, our Consumer Finance Monitor podcast takes a deep dive into this critical decision and its implications. Alan Kaplinsky (founder and former practice group leader, now senior counsel in our Consumer Financial Services Group) joins Joseph Schuster (a partner in the Group) for a wide-ranging conversation covering:
- The majority opinion by Judge Katsos
- The dissenting opinion by Judge Pillard
- The plaintiffs’ options for further review — and why the odds may be at least 50–50 that the full D.C. Circuit (with 11 judges, seven appointed by Democratic presidents) will grant en banc review
- Why plaintiffs might choose to continue litigating in the district court as the CFPB implements the RIF and scales back activities to only those that are statutorily mandated
- How the CFPB’s sharply reduced budget (cut nearly in half by the “Big Beautiful Bill”) shapes the Bureau’s future functions
- What the CFPB could look like once litigation ends and “the dust settles”
- The impact of the just-released semiannual regulatory agenda
- The current status of the complaint portal
- What’s happening with the CFPB’s supervision and enforcement efforts
- How the DOJ and FTC are approaching consumer financial services issues
- Whether state attorneys general are stepping up enforcement to fill the gap left by a diminished CFPB
This is a must-listen episode for anyone following the future of the CFPB, the role of other federal agencies, and the actions of state AGs in regulating consumer financial services.
To listen to this episode, click here.
Consumer Financial Services Group
Podcast Episode: Do Arbitrators Follow the Law? A New Study Provides Data, but the Debate Continues
This episode of the Consumer Finance Monitor podcast is centered around a novel and thought-provoking article by David Horton, a professor of law at the University of California, Davis. The article, titled, “Do Arbitrators Follow the Law? Evidence from Clause Construction, “dives into the intriguing question of whether arbitrators render decisions that align with judicial rulings. Horton explores the longstanding debate on arbitration’s adherence to legal standards, focusing on whether arbitrators have followed the Supreme Court’s 2019 decision in Lamps Plus, Inc. v. Varela (2019) that class-wide arbitration is not permitted when an arbitration clause is silent or ambiguous on the matter. The podcast episode explores the ramifications of Horton’s finding that in about 27% of the arbitrations studied, the arbitrators did not follow Lamps Plus. Horton interprets that finding as suggesting that a significant minority of arbitrators may be motivated by financial considerations in allowing a class arbitration to proceed, notwithstanding Lamps Plus, because it is more lucrative for them than an individual arbitration.
Mark Levin, senior counsel at Ballard Spahr, also joins the program. Mark interprets Horton’s findings differently, emphasizing that in his view Horton’s data strongly supports the conclusion that arbitration is not lawless since an overwhelming majority of the arbitrators (73%) did follow Lamps Plus. Mark also dismisses Horton’s suggestion that some arbitrators’ rulings may be swayed by financial considerations as pure speculation. On the contrary, he observes, the fact that some arbitrators have not strictly followed Lamps Plus does not show they were not following the law since the issue of clause construction has a lengthy complex history and prominent courts such as the Second Circuit have themselves found reasons for distinguishing Lamps Plus.
Consumer Finance Monitor is hosted by Alan Kaplinsky, senior counsel at Ballard Spahr, and the founder and former chair of the firm’s Consumer Financial Services Group. We encourage listeners to subscribe to the podcast on their preferred platform for weekly insights into developments in the consumer finance industry.
To listen to this episode, click here.
Consumer Financial Services GroupDon’t Miss Our Exclusive Webinar on President Trump’s Debanking Executive Order
On August 7, President Trump signed a landmark executive order, “Guaranteeing Fair Banking for All Americans.” This sweeping action prohibits financial institutions of any size from denying services to individuals or businesses based on political or religious beliefs, orientation, or lawful industry involvement.
The order is already being called one of the most consequential banking actions in years. It directs regulators to eliminate “reputational risk” from supervisory frameworks, investigate past and current debanking practices, and impose potential penalties—including fines and consent decrees. It also raises complex questions about how banks can balance these new mandates with AML/BSA requirements and risk management.
For financial institutions, regulators, compliance professionals, and their customers, the stakes could not be higher.
Why You Should Attend
Our complimentary webinar will give you the insights and strategies you need to stay ahead:
- Understand the full scope of the executive order — including provisions that could dramatically alter compliance and supervisory expectations.
- Get clarity on legal foundations — Does UDAAP, UDAP, or ECOA provide sufficient authority for enforcement?
- Learn what counts as a “lawful business” — and whether institutions must serve industries such as crypto, cannabis, pornography, or firearms.
- Navigate federal vs. state conflicts — including how the order interacts with “fair access” and “anti-debanking” laws already enacted in states like Florida and Tennessee.
- Prepare your institution — with best practices, risk assessments, and when to consider outside counsel reviews.
This is a must-attend event for officers, directors, legal and compliance professionals at financial institutions, as well as anyone working with federal or state financial regulators.
Event Details
A New Era for Banking: What President Trump’s Debanking Executive Order and Related State Laws Mean for Financial Institutions, Government, and Banking Customers
September 24, 2025
12:00 – 1:30 PM ET
Featured Speakers
Brian Knight, Senior Counsel, Corporate Engagement, Alliance Defending Freedom
Todd Phillips, Assistant Professor, Maurice R. Greenberg School of Risk Science, J. Mack Robinson College of Business, Georgia State University
Jason Mikula, Publisher, Fintech Business Weekly
Graham Steele, Rock Center for Corporate Governance, Stanford Law School
Will Hild, Executive Director, Consumers’ Research
Moderator
Alan S. Kaplinsky, Founder and Former Practice Leader, Consumer Financial Services, Ballard Spahr LLP
Complimentary Registration
Register Here.
CFPB Seeks Comments on Raising ‘Larger Participant’ Thresholds
On August 8, 2025, the Consumer Financial Protection Bureau (CFPB) issued four advance notices of proposed rulemaking (ANPR) inviting comments on whether it should substantially reduce the number of nonbank companies the CFPB supervises in the auto finance, international money transfer, debt collection, and consumer credit reporting markets. An agency spokesperson told Law 360, “As part of President Trump’s overhaul of this abusive agency, ‘Larger Participant’ regulations are open for re-examining after more than a decade. We are giving the power back to the American people and asking them to tell us how these regulations impact their daily lives.”
Section 1024 of the Consumer Financial Protection Act gives the CFPB supervisory authority over all nonbank covered persons offering the following consumer financial products or services: (1) origination, brokerage, or servicing of consumer loans secured by real estate, and related mortgage loan modification or foreclosure relief services; (2) private education loans; and (3) payday loans. The Bureau further has supervisory authority over ‘‘larger participant[s] of a market for other consumer financial products or services, as defined by rule[s]’’ the CFPB issues. To date, the Bureau has issued six rules defining larger participants of markets for consumer financial products and services for purposes of CFPA section 1024(a)(1)(B). It did not invite comments on its larger participant rule for student loan servicers and its larger participant rule for general-use digital payment application providers, which was nullified under the Congressional Review Act, as we’ve previously discussed.
In general, the Bureau is concerned that “the benefits of [the current thresholds] may not justify the compliance burdens for many of the entities that are currently considered larger participants in [each particular] market.” The following summary of the notices highlights how the CFPB is considering the alteration of the definition of “larger participant” in the four specific markets, the implications of those changes, and the benefits the Bureau hopes to observe as a result.
Consumer Reporting Market
The Bureau published its first larger participant rule, the Consumer Reporting Larger Participant Rule, on July 20, 2012. The final rule established that nonbank covered persons with more than $7 million in annual receipts resulting from certain consumer reporting activities would be considered larger participants. The consumer reporting market includes consumer reporting agencies selling consumer reports, consumer report resellers, analyzers of consumer reports and other account information, and specialty consumer reporting agencies. The ANPR clarifies that specialty consumer reporting agencies “primarily collect and provide specific types of information that may be used to make decisions regarding particular consumer financial products or services, such as payday loans or checking accounts.”
The Bureau notes that its test for larger participants in this market may be out-of-date. The definition of ‘‘annual receipts’’ was adapted from the definition of the term used by the Small Business Administration (SBA). When the Consumer Reporting Larger Participant Rule was issued, the SBA small-business threshold was $7 million in annual revenues. Today, the corresponding threshold is $41 million in annual revenues. Moreover, the Bureau originally only relied on Economic Census data to determine market sizes. Since then, the U.S. Census Bureau, in cooperation with the Small Business Administration Office of Advocacy, has developed an additional data source called Statistics of U.S. Businesses (SUSB). The SUSB data includes an estimated 250 total entities, of which fewer than 30 are above the current SBA threshold of $41 million in annual revenues for small businesses in NAICS code 561450 (Credit Bureaus).
The Bureau advises that, based on its risk-based prioritization process, the Bureau’s examinations have largely focused on entities with annual receipts that significantly exceed both its own $7 million threshold, as well as the SBA’s $41 million annual revenue threshold. In fact, according to the CFPB, the vast majority of the consumer reporting companies that it has examined have had annual receipts exceeding $50 million. Based on these examinations, the Bureau estimates that increasing the annual receipts threshold to match the SBA annual revenue threshold of $41 million would only leave about six larger participants in the market. The CFPB does not formally propose a $41 million threshold.
Consumer Debt Collection
The CFPB published the Consumer Debt Collection Larger Participant Rule on October 31, 2012. A nonbank covered person is a larger participant in the consumer debt collection market if they have more than $10 million in annual receipts resulting from consumer debt collection activities. The Bureau explained that it set the threshold at $10 million in annual receipts because it believed that threshold would cover a sufficient number of market participants to effectively assess compliance and risks to consumers, but at the same time cover only consumer debt collectors that can reasonably be considered ‘‘larger’’ participants in the market.
The Bureau is likewise concerned that its standard may be out-of-date. The SBA size standard for collections agencies is, most recently, $19.5 million, almost twice the Bureau’s threshold. As a result, several collection agencies, classified as small businesses according to the SBA, are supervised as larger participants by the CFPB. While the Economic Census and SUSB differ on actual market size, both sources indicate that the collections industry has consolidated significantly since the Consumer Debt Collection Larger Participant Rule was issued. According to the CFPB, based on the most recent data from the 2022 Economic Census and the SUSB data, there are now about 2,500 to 3,000 entities engaged in debt collection, more than 1,000 less than when the CFPB issued the rule. Of this number, only approximately 200 to 250, have annual receipts exceeding $10 million. Among firms with over $10 million in revenues, roughly half have annual receipts between $10 and $25 million. The notice asserts that most of these entities are likely small business concerns, as defined by the SBA.
Therefore, the Bureau suggests that increasing the annual receipts threshold to $25 million would result in roughly 100 to 125 larger participants who have between roughly 55 to 70 percent of the total revenues reported for the covered debt collection industry. The CFPB does not formally propose a $25 million threshold, and also addresses thresholds of $50 and $100 million.
International Money Transfer
The Bureau published the International Money Transfer Larger Participant Rule on September 23, 2014. The final rule established that nonbank covered persons making at least one million aggregate annual international money transfers are larger participants in the market. International money transfers are electronic fund transfers sent by nonbank covered persons from U.S. consumers to persons or entities abroad. The notice distinguishes the definition of an “international money transfer” from the Bureau’s definition of ‘‘remittance transfer,’’ in two main ways.
- The definition substitutes ‘‘international money transfer provider’’ in each place where the term ‘‘remittance transfer provider’’ appears in 12 CFR 1005.30(e).
- The International Money Transfer Larger Participant Rule defines ‘‘international money transfer’’ without regard to the amount of the transfer, unlike the Remittance Rule, which excludes transfers of $15 or less from the definition of ‘‘remittance transfer.’’
The International Money Transfer Larger Participant Rule was first issued to help ensure that these entities were complying with the consumer protections afforded by Electronic Fund Transfer Act as implemented by the Remittance Rule, as well as other federal consumer financial laws. According to the CFPB, based on data that State regulators collected from the fourth quarter of 2023 through the third quarter of 2024, approximately 28 nonbank covered persons currently qualify as larger participants. The notice remarks that the market for international money transfers is heavily concentrated. The Bureau found that the largest eight non-depository financial institutions conducted approximately 77% of estimated remittance transfers.
The CFPB proposes that a higher threshold might better balance the goals of protecting consumers while not unnecessarily imposing costs on covered persons. For example, the Bureau estimates that if it raises the threshold from 1,000,000 to 10,000,000 international money transfers per year, only approximately 15 nonbank covered persons would qualify as larger participants, but an estimated 94% of all international money transfers would still be covered. The CFPB does not formally propose a 10,000,000 threshold, and also addresses thresholds of 30,000,000 and 50,000,000.
Automobile Financing
The Bureau published the Automobile Financing Larger Participant Rule on June 30, 2015. Currently, a nonbank covered person is a larger participant of the automobile financing market if the nonbank covered person has at least 10,000 aggregate annual originations. The final rule defined ‘‘annual originations’’ to mean “the sum of the following transactions for the preceding calendar year: credit granted for the purchase of an automobile; refinancings of such obligations (and any subsequent refinancings thereof) that are secured by an automobile; automobile leases; and purchases or acquisitions of any of the foregoing obligations.”
The automobile financing market includes the following types of nonbank covered persons: (1) specialty finance companies; (2) ‘‘captive’’ nonbanks (commonly referred to as ‘‘captives’’); and (3) Buy Here Pay Here (BHPH) finance companies. Specialty financing companies typically provide financing to subprime borrowers who tend to have past credit problems, lower income, or limited credit histories, which prevent them from being able to obtain financing elsewhere. Captives are subsidiary finance companies owned by auto manufacturers. They facilitate their parent companies’ auto sales by providing consumers with financing and leases. According to the CFPB, at present, the five nonbank entities with the highest number of originations are captives. Lastly, BHPH dealers traditionally focus on subprime and deep subprime borrowers, and typically retain retail installment contracts or assign them to an affiliated finance company. Based on the Bureau’s analysis of data from Experian VelocitySM for the period of February 1, 2024, to January 31, 2025, approximately 63 entities qualified as larger participants in this market. The 63 entities include all three categories of nonbanks: specialty finance companies, captives, and BHPH finance companies. However, the CFPB advises that 18 entities accounted for 80% of the originations.
In the advance notice, the Bureau expressed concern that the number of larger participants in the automobile financing market subject to supervision may be too broad, and potentially diverting limited Bureau resources to determine who is a larger participant and whether an entity should be examined in a particular year. By raising the threshold, the Bureau argues it could focus its supervisory oversight on the most active market participants with the highest interaction with consumers. For example, the Bureau noted that if it raises the threshold from 10,000 to 550,000 aggregate annual originations only 11 nonbank entities would qualify as larger participants, but the updated rule would still cover approximately 66% of originations. The CFPB does not formally propose a 550,000 originations threshold, and also addresses thresholds of 300,000 and 1,050,000 originations.
General Questions
In addition to market specific questions, the notices broadly ask commenters to provide insight on the following topics:
- What additional sources of data can be reliably used to inform estimates of current market sizes?
- How would changing the current threshold for larger participant benefit and/or harm consumers?
- What are the costs to covered entities that are specific to the Bureau’s supervisory authority for larger participants in the relevant market?
- Are there costs or benefits to consumers, including rural consumers, servicemembers, and veterans, of raising the larger participant threshold?
- Are there significant recordkeeping requirements that would be reduced by raising the larger participant threshold?
- Should the Bureau’s test for defining larger participants in the consumer reporting market account for the SBA’s size standards? If so, how?
- The International Money Transfer ANPR specifically asks, would an increase in the threshold have a potential disproportionate impact on any geographic regions, and if so how?
The comment periods for all four notices end on September 22, 2025.
While the CFPB’s cutbacks have been a cause of major concern among consumer advocates and various legislators and regulators, it remains to be seen whether these changes will be adopted and, if they are, whether the changes will result in the reduced, but more effective oversight the Bureau predicts.
SBA Directs Financial Institutions to End, Correct Debanking Actions
Citing President Trump’s executive order, the SBA has sent letters to its network of more than 5,000 lenders instructing them to end what the Trump administration said is politicized or unlawful debanking.
The SBA is requiring all lenders to stop debanking and reinstate qualified customers who were denied services on the basis of political, religious or ideological beliefs. “Lenders who fail to comply with these directives will lose their good standing with the SBA and will be subject to additional punitive measures,” the SBA said.
“Since the Obama administration, financial institutions have – both independently and at the direction of federal regulators – weaponized the banking system against Americans who refused to bend the knee to a partisan ideology,” SBA Administrator Kelly Loeffler said. “Access to banking should not be a partisan issue – but far too many confirmed debanking cases have targeted right-leaning businesses, non-profits, and people – including Christian, pro-life, and Second Amendment organizations.”
On August 7, President Trump signed an Executive Order, “Guaranteeing Fair Banking for All Americans.” This sweeping action prohibits financial institutions of any size from denying services to individuals or businesses based on political or religious beliefs, orientation, or lawful industry involvement.
The SBA said that both the Obama and Biden administrations pressured financial institutions to engage in debanking. The agency cited the Obama administration’s “Operation Chokepoint,” a program that it said pressured lenders to debank gun manufacturers and other “politically disfavored” but legal entities. The administration said that there are myriad examples of groups being debanked under the guise of “reputational risk.” The SBA said that even President Trump has been debanked by numerous institutions that refused to accept his deposits or closed his accounts.
At the same time, many of the same institutions were encouraged to increase services to politically left-leaning political causes, according to the agency. The Biden administration pushed SBA loan programs to favor “green energy,” the SBA said.
The SBA directed lenders to take action by December 5, 2025. Those actions are to:
- Identify any past or current policies that influence their institutions to engage in politicized debanking as outlined in President Trump’s executive order.
- Make reasonable efforts to identify and reinstate clients of their institutions who were denied services due to debanking.
- Identify all potential clients denied access to financial services due to debanking.
- Identify all potential clients denied access to payment processing through a politicized debanking action.
Lenders must submit a report to the SBA by January 5, 2026, providing evidence of their compliance with the directives to remain in good standing with the agency and avoid punitive measures.
For financial institutions, regulators, compliance professionals, and their customers, the debanking stakes could not be higher.
On September 24, Ballard Spahr will hold a webinar, “A New Era for Banking: What President Trump’s Debanking Executive Order and Related State Laws Mean for Financial Institutions, Government, and Banking Customers.”
During the webinar, we will explain why financial institutions should promptly engage counsel to conduct a privileged review of all policies, procedures and adverse actions to ensure compliance with the executive order.
The webinar will be held between 12:00-1:30 PM ET.
Register here.
Back to TopPlaintiffs Ask for Delay in Compliance Dates for CFPB Open Banking Rule
The banking plaintiffs in the suit challenging the CFPB’s open banking rule (Rule) have asked a federal court to delay the compliance date of the Rule, contending that even though the Trump administration has said it was rescinding the rule and writing a new one, the compliance dates technically remain in effect.
The plaintiffs contend that the current compliance dates will result in their members having to spend money and time complying with a rule that will never go into effect.
The Rule is scheduled to go into effect on June 30, 2026. Forcht Bank and banking trade groups said the CFPB will not be able finalize a new rule by that date, meaning the effective date remains in place. And, they said, the administration has done nothing to delay that effective date.
Dodd-Frank requires the CFPB to issue rules that would allow consumers to obtain transaction data and other information concerning a consumer financial product or service that the consumer obtained from the covered entity.
When the Rule was issued on October 22, 2024, it was immediately met with criticism from industry groups. Forcht Bank, the Bank Policy Institute and Kentucky Bankers Association filed a lawsuit the day the Rule was released, seeking injunctive relief, alleging that the CFPB exceeded its statutory authority.
The Trump administration agreed and said it was simply withdrawing the Rule. However, more recently, the administration said it was writing a new rule in an expedited process and intends to issue a Notice of Proposed Rulemaking soon.
“But an advance notice of proposed rulemaking is not even the actual, subsequent notice of proposed rulemaking that commences the public-comment process,” the plaintiffs argue.
They added, “It is only a preparatory step, antecedent to a potential future rulemaking, not itself a decision to reconsider the [previous] rule.”
The plaintiffs said that eight years lapsed between the CFPB’s initial request for information and the release of the current banking rule.
Without a new stay, delaying the rule’s effective date, “Plaintiffs and their members face irreparable harm in the form of substantial time and funds they will need to expend to comply with a Rule that the promulgating agency has admitted is unlawful and announced its intention to commence a new rulemaking process to replace,” they said. Those expenditures are likely to be wasted, the plaintiffs said.
The plaintiffs ask Judge Danny C. Reeves to issue a stay, delaying the rule’s enforcement until one year following the conclusion of the litigation.
Meanwhile, the battle over open banking rages on.
A coalition of consumer groups has sent a letter to leaders of the House Financial Services and Senate Banking, Housing and Urban Affairs Committees asking them to hold hearings on the open banking rule.
“On July 29, the CFPB announced its intention to start a new rule-writing process – a decision that could indicate its renewed understanding that a financial data right rule is both overdue and essential, though other potential motivations have also surfaced,” the groups, including the Consumer Federation of America, the National Consumer Law Center and Public Citizen, wrote.
They continued, “The original rule benefited consumers and the market for consumer financial products and services by cementing consumers’ rights to share their data with the financial institutions of their choosing, enabling them to shop for a better deal and more easily ‘vote with their feet’ by using products and services offered by providers that compete with large banks or credit unions.”
They added that at the same time, the rule established some of the strongest data privacy protections that have been seen at the federal level.
The groups wrote that the rule was the product of a multi-year rulemaking process.
“The CFPB went to unusual lengths to engage consumers, academics, non-profits, and industry stakeholders from banks, credit unions, financial technology companies, and trade associations, almost all of whom expressed high-level support for the rule for years,” they wrote.
In other open banking news, the Financial Technology Association and 80 groups are accusing banks of finding ways to deny consumers access to basic financial services.
“Large banks are taking aggressive action to preserve their market position by imposing exorbitant new ‘account access’ fees that would prevent consumers from connecting their accounts to better financial products of their choice,” the groups wrote, in a letter to President Trump. “This access is critical to ensuring Americans have control of their own financial lives in a digital economy.”
They continued, “This is not a dispute over fair pricing; it is an anti-competitive move designed to consolidate power. It threatens to cripple innovative products and may cause small businesses and financial tools to shut down entirely.”
They asked President Trump to “use the full power of your office and the broader administration” to prevent the largest banks from “raising new barriers to financial freedom.”
Responding to the FTA letter, banking trade groups said in a statement, “Banks don’t charge consumers fees to access their data, and because of banks’ innovation and investments in secure systems, consumers have access to more financial products and secure services than ever.”
The banking trade groups accused the Financial Technology Association and other groups of having a double standard in which they may charge fees for service, while banks are expected to provide the same service for free.
“We look forward to seeing a personal financial data rights rule that comports with the statute, protects consumers, and ensures a level playing field to encourage innovation, a process the Consumer Financial Protection Bureau has already begun,” they concluded.
Attempting to address the concerns of the plaintiffs, the Bureau said on August 21 that it intends to issue a Notice of Proposed Rulemaking to extend the compliance dates.
Kristen E. Larson and Ronald K. VaskeCFPB Invites Comments on New Section 1033 ‘Open Banking’ Rule
As promised, the CFPB is issuing an Advance Notice of Proposed Rulemaking soliciting comments on the agency’s open banking rule.
In the notice, scheduled to be published in the Federal Register on August 22, 2025, the CFPB lists four areas it wants addressed and then provides a list of questions that commenters might answer.
Those four areas are:
- The proper understanding of who may serve as a “representative” of the consumer.
- The “optimal” approach to the assessment of fees to defray the costs incurred by a “covered person” in responding to a request from a customer.
- The threat and cost-benefit pictures for data security associated with compliance with Section 1033—the section of Dodd-Frank that requires so-called “open banking.”
- The threat of data privacy issues associated with Section 1033 compliance.
Comments are due 60 days after the publication in the Federal Register.
When the Section 1033 final rule was issued on October 22, 2024—during the Biden administration—it was immediately met with criticism from industry groups. Forcht Bank, the Bank Policy Institute, and the Kentucky Bankers Association filed a lawsuit the day the Rule was released, seeking injunctive relief, alleging that the CFPB exceeded its statutory authority.
The Trump administration agreed and said it was simply withdrawing the Rule. However, more recently, the administration said it would write a new rule through an expedited process and that it intends to issue a Notice of Proposed Rulemaking soon.
This Advance Notice of Proposed Rulemaking initiates that process.
The CFPB said, “The statutory text of section 1033 of Dodd-Frank provides that, subject to rules issued by the CFPB, consumers shall have access to requested information in the control or possession of financial entities relating to the products or services obtained from those financial entities.”
However, the CFPB further stated that Section 1033 is “quite sparse and does not specifically address several important questions that arise from the rights it creates.”
For instance, section 1033 does not specify who may act on the consumer’s behalf, nor does it address the costs associated with providing the requested information, according to the CFPB. It also does not address “the potential negative consequences to the consumer of exercising this right in an environment where there are tens of thousands of malign actors regularly seeking to compromise data sources and transmissions,” the CFPB said.
Section 1033 also is silent about the potential negative consequences to the consumer in exercising the right where the data may contain information the consumer might not want disclosed but the consumer may not realize that data might be disclosed by the third-party through which the consumer made the request, according to the CFPB.
“A consumer’s financial transactions reveal an enormous amount of information about their habits and lifestyle,” the CFPB said. “Even for those who are comfortable with the existence of an extensive digital record that can often accurately be used to predict their behavior, there is certain information that [a] few individuals may not want revealed to everyone and anyone, sometimes even those closest to them.”
Finally, the CFPB said the law does not address “the potential benefits to consumers or competition of facilitating the consumer-authorized transfer of data to financial technology companies, application developers, and other third parties.”
The CFPB is seeking comments on the threats to data privacy as a result of the licensing or sale of sensitive financial information.
The CFPB also said it plans to issue a Notice of Proposed Rulemaking to extend the current rule’s compliance dates and is seeking comments on the appropriateness of the compliance dates.
The Section 1033 rule finalized under the Biden administration is scheduled to go into effect on June 30, 2026. Forcht Bank and banking trade groups that sued challenging that rule, said the CFPB will not be able finalize a new rule by that date. As a result, they contend that financial institutions must prepare for the implementation of the Biden administration’s rule. Consequently, they asked U.S. District Judge Danny C. Reeves of the Eastern District of Kentucky to issue a stay further delaying the effective dates.
Banking trade groups said they welcome the opportunity to comment on a possible new proposal.
“The Bureau’s decision to reopen this rulemaking process is a welcome step toward restoring accountability, consumer protection, and the rule of law,” Lindsey Johnson, President and CEO of the Consumer Bankers Association said. “The prior administration’s rule stretched far beyond what Congress intended in Section 1033, mandating broad data sharing that created real risks of fraud, breaches, and consumer harm.”
Rebecca Romero Rainey, President and CEO of the Independent Community Bankers of America, said she hopes that any new rule contains the provisions of the old rule “exempting small community banks from the requirement to create and maintain a third-party developer interface, allow banks to charge reasonable fees for third parties to access bank customers’ data, and enhance bureau oversight of third-party data privacy protections. The nation’s community banks should not be required to bear the costs of establishing and maintaining developer portals to allow third-party companies to access consumer data.”
She said the ICBA hopes that the CFPB focuses on promoting data security at third-party entities. “Enhancing data security and oversight at these third-party entities will help ensure community banks are not faced with the impossible task of vetting the security protocols of potentially thousands of fintech companies seeking to access their customers’ data,” she added.
“Stakeholders from every part of the data sharing chain have significant concerns with the current rule, and we look forward to engaging with the new leadership at the CFPB to address critical issues important to consumers including the need for a robust liability regime for resolving unauthorized activity or data breaches; preserving data providers’ ability to safeguard data; ending once and for all the dangerous practice of screen scraping that puts consumer personal information at greater risk; the government-mandated subsidization of other companies’ business models; and how long covered entities will have to come into compliance with the regulatory requirements,” said Rob Nichols, President/CEO of the American Bankers Association.
He added that ABA members also hope the new Personal Financial Data Rights Rule will retain the positive aspects of the existing regulation, such as the role of industry standard setting for data formats and strong privacy protections to prevent the unwitting sale of consumers’ sensitive personal financial information by data aggregators.
We will continue to monitor the issuance of any stay of the compliance dates in the litigation and the CFPB’s new rulemaking proceeding.
Kristen E. Larson and Ronald K. VaskeAppeals Court Issues Stay Keeping Harper and Otsuka Off NCUA Board
Todd Harper and Tanya Otsuka will not be reinstated to the NCUA board while the District of Columbia Court of Appeals considers whether their firing by the Trump administration is illegal, a panel of the court has decided.
The two already had been barred from the board through a temporary administrative hold, pending further court order. But now, a stay has been issued keeping the two off the board while the Trump administration’s appeal of a lower court order is considered.
Judge Amir H. Ali, of the U.S. District Court for the District of Columbia had determined that the Democrat NCUA board members Todd Harper and Tanya Otsuka could only be removed for cause. President Trump had fired them without cause and, thus, Judge Ali had ruled that President Trump had fired them illegally.
Because no stay had been issued by the time of a July meeting, the two participated in that meeting.
Later, the administrative hold was issued.
The Appeals Court agreed to consider the case on an expedited basis, agreeing to a request by Harper and Otsuka.
The developments were first reported by Law360.
Alan S. Kaplinsky, John L. Culhane, Jr., and Richard J. Andreano, Jr.Republican Senators Ask Financial Regulators to Overhaul Matters Requiring Attention Process
Republican senators on the Banking, Housing, and Urban Affairs Committee are asking banking regulators to review their process of using Matters Requiring Attention (MRA) in the bank supervisory process.
“If used effectively, these are valuable supervisory tools that can mitigate broader issues and maintain financial stability,” 11 GOP senators said in a letter to the FDIC, OCC, and the Federal Reserve. “However, we are concerned that the lack of structure, uniformity, and legal basis has allowed the MRA process to become increasingly opaque, ineffective, and inconsistent.”
The senators said that MRAs are not specifically mentioned in any law or guidance but were created by the regulatory agencies without public comment. They added that this has led to inconsistent application and “fragmented interpretations” that can create confusion for financial institutions.
“We are concerned that the absence of a clear legal framework provides individual agencies with broad discretion, which has allowed the process to devolve into a subjective supervisory tool, vulnerable to inconsistent application,” the senators wrote.
The OCC, Federal Reserve, and FDIC have each developed their own internal definitions and standards for issuing and resolving MRAs, they wrote. In addition, banks have no way to challenge MRAs, and regulators face no consequences for failure to follow up on MRAs, according to the senators.
The senators cited Silicon Valley Bank, which had a significant number of MRAs when it collapsed. “Several of the findings reflected known safety and soundness deficiencies in liquidity risk management and interest rate risk modeling—both primary contributors to the bank’s collapse,” they contended. “Despite the warning signs, SVB maintained a satisfactory rating for management and liquidity.”
The senators urged the agencies to make changes to the MRA process to address shortcomings.
“Regulators should reconsider current definitions and establish clear standards and expectations for issuing and resolving MRAs, subject to the rulemaking process under the Administrative Procedure Act,” they wrote. They added, “These standards should be uniform across the OCC, Federal Reserve, and FDIC, and based on true bank ‘safety and soundness.’”
“To restore effectiveness, discipline and consistency into the process, we must ensure that MRAs are used judiciously—reserved for material risks and accompanied by legal grounding and clear expectations,” they said.
In addition, regulators should be held accountable for ensuring that problems are resolved in a timely fashion.
The senators concluded, “Without true legal grounding and accountability on both sides, MRAs risk becoming a check-the-box exercise rather than a valuable supervisory tool that can mitigate more widespread risk.”
The Republican senators signing the letter are Senate Banking, Housing and Urban Affairs Committee Chairman Tim Scott, R-S.C.; Sen. Katie Britt, R-Ala.; Sen. Mike Crapo, R-Idaho; Sen. Michael Rounds, R-S.D.; Sen. Thom Tillis, R-N.C.; Sen. Bill Hagerty, R-Tenn.; Sen. Cynthia Lummis, R-Wyo.; Sen. Jim Banks, R-Ind.; Sen. Kevin Cramer, R-N.D.; and Sen. Dave McCormick, R-Pa.
Scott A. Coleman, Joseph J. Schuster, and Ronald K. Vaske
CFPB Drops Probe of Credova Financial LLC, Saying It Was Politically Motivated ‘Debanking’
Contending that the Biden administration’s investigation of Credova Financial LLC was an instance of politically motivated debanking, the CFPB is dropping its probe of the company.
“After reviewing the case, the Bureau has determined that this investigation exemplifies the type of weaponization against disfavored industries and individuals that President Trump and Acting Director Vought are committed to ending,” Mark Paoletta, chief legal officer of the CFPB wrote in a letter to James Giudice, general counsel and chief legal officer at PSQ Holdings, Credova’s parent company.
Paoletta continued, “In sum, this investigation was not aimed at protecting consumers, but at suppressing activities protected by the First and Second Amendment. This investigation also represents precisely the kind of unconstitutional targeting that President Trump prohibited in his executive order on debanking.”
President Trump has issued an executive order directing banking agencies to adopt policies to ensure that financial institutions do not use reputational risk as a basis for restricting access to banking services—a process known as “debanking.”
President Trump, in the order, stated that financial institutions have engaged in unacceptable practices to restrict law-abiding individuals and businesses from access to financial services on the basis of their political beliefs or lawful business activities. He said some financial institutions targeted conservatives and those on the political right following the events at the U.S. Capitol on January 6, 2021.
Banking regulators have said they are adjusting guidance and regulations to ensure that debanking has ended. And Representative Andy Barr, (R-Ky.), has said he will introduce legislation codifying President Trump’s executive order.
Credova has said that 90% of its business comes from shooting sports and outdoor recreation sectors. It said it provides point-of-sale financing to outdoor recreation merchants and the firearms industry.
Paoletta said the record of the investigation demonstrates that it was conducted in a biased manner that targeted the company’s exercise of its constitutional rights. He said that in the early stages of negotiations the Bureau’s staff said that Credova should consent to cease leasing firearms as part of its business.
“The Bureau’s demands in its proposed settlement agreement unmistakably appear targeted at shutting down Credova’s firearms business through crushing monetary penalties and arbitrary injunctive restrictions,” Paoletta wrote.
He alleged that after a period of inactivity and allowing evidence to go stale, the CFPB ratcheted up its probe via a proposed consent decree submitted to the company on December 3, 2024, shortly before President Biden left office.
Paoletta said the date was the same day that Public Square, Credova’s parent company, announced the addition of Donald Trump Jr. to its board of directors. The CFPB then pressured Credova to settle before the inauguration of President Trump, he added.
“I am glad that Credova had the fortitude to resist that pressure,” Paoletta wrote.
“The Bureau confirmed what we have always known: the investigation was biased, targeted lawful commerce, and designed to suppress constitutionally protected activity rather than protect consumers,” the company said, in a blog post.
The Washington Post reported that there have been more than 50 complaints filed against Credova in the CFPB’s database. Many of the complaints relate to debt collection practices, the Post reported. The Post also reported that the company has a record of consumer complaints and settlements over state consumer protection violations,
The news organization also reported that the company and the California Department of Financial Protection and Innovation entered into a consent order in 2024 to resolve claims that the firm failed to provide details about possible third-party convenience fees.
And in 2021, the company and another Nevada-based finance firm reached a settlement with the Massachusetts attorney general’s office to resolve claims that they illegally leased dogs in violation of the state’s consumer protection law, according to the Post.
We have been following debanking issues for many years on our blog and podcast show. Click this link to listen to a podcast show consisting of a debate about the wisdom of a few state debanking statutes. Click this link to listen to a podcast about “Operation Chokepoint,” a former government initiative to discourage banks from doing business with payday lenders. Click this link for a discussion of reputational risk.
On September 24, we will hold a webinar, “A New Era for Banking: What President Trump’s Debanking Executive Order and Related State Laws Mean for Financial Institutions, Government, and Banking Customers.” This is a must-attend event for officers, directors, legal and compliance professionals at financial institutions and those working for financial regulators.
The webinar will be held from noon to 1:30 PM ET.
To Register.
Alan S. Kaplinsky, John L. Culhane, Jr., and Ronald K. Vaske
2025 HR Legal Summit: Sessions and Speakers Announced
Ballard Spahr LLP’s Labor and Employment Group, in collaboration with the Southeastern Pennsylvania Chapter of SHRM (SEPA SHRM), is pleased to present our sessions and speakers for the upcoming HR Legal Summit. This program is designed for HR professionals and in-house counsel to stay informed on legal trends and developments, ensuring compliance and effective management of workplace issues.
Prioritize your professional development and register today!
Thursday, September 18, 2025
8:00 AM – 4:30 PM ET
Presidential Caterers
2910 Dekalb Pike
East Norriton, PA 19401
Sessions and Speakers
Collaborative Partnerships: HR, the Business, and the Law
Brian Pedrow
Workplace Harassment: New Claims for a New Era
Denise Keyser
Navigating the Accommodation Landscape: Practical Guidance for HR Professionals
Christine Thelen
Workforce Reorganization and RIFs: The Right Approach to Right-Sizing
Charles Frohman
Trump Labor Board: As the Pendulum Swings
Louis Chodoff and Rebecca Leaf
Empowered Separations: HR Strategies for Turning Firings into Opportunities
Sean Jackson and Shirley Lou-Magnuson
CLE Credits: This program is approved for 4.5 (incl. 1.0 PA Ethics; and 1.0 CA and NY Elimination of Bias) CLE credits in CA, NY, and PA; and 5.7 (incl. 1.2 Ethics) NJ. Uniform Certificates of Attendance will also be provided for the purpose of seeking credit in other jurisdictions.
HRCI and SHRM credits are also available.
For more information about the conference or sponsorship opportunities, please contact Laurie Sample at sepa-administrator@sepashrm.org or visit the 2025 HR Legal Summit Event Page.
Brian D. Pedrow, Denise M. Keyser, Christine Thelen, Charles Frohman, Louis L. Chodoff, Rebecca A. Leaf, Sean Jackson and Shirley S. Lou-MagnusonBallard Spahr Event: Wage and Hour Update for Business
Arizona employers are being sued by individuals and groups of employees for alleged overtime and wage and hour violations. Please join us to learn how to protect your company from these expensive lawsuits, and prepare for government investigations.
This seminar will update attendees on:
- The marked increase of litigation over wage and hour issues and how your company can avoid being sued
- How employers can efficiently review their classifications of employees as exempt or nonexempt from overtime
- Address recordkeeping requirements for overtime and hours worked
- How to effectively track hours for remote and hybrid worker
- Avoiding and responding to state and federal investigations and considering self-reporting programs
Thursday, October 30, 2025
7:30 AM – 9:00 AM
Arizona Biltmore Golf Club
2400 Biltmore Estates Drive
Phoenix, AZ 85016
Program Details
7:30 AM – 8:00 AM | Registration and Breakfast
8:00 AM – 9:00 AM | Program
CLE Credit: This program is approved for 1.0 CLE credits in CA, NJ, NY, and PA. 1.0 HRCI and SHRM credits are pending. The State Bar of AZ does not approve or accredit CLE activities for the MCLE requirement. This activity may qualify for up to 1.0 hours toward your annual CLE requirement for State Bar of AZ. Uniform Certificates of Attendance will be provided for the purpose of seeking CLE credit in other jurisdictions.
For more information, contact Meg Connolly at connollymr@ballardspahr.com.
Jay Zweig and Melissa Costello
Recent Consumer Financial Services Developments at the Federal Trade Commission
A Ballard Spahr Webinar | September 9, 2025, 12 PM ET
Speakers: Alan S. Kaplinsky and John L. Culhane, Jr.
MBA – Human Resources Symposium 2025
September 9-10, 2025 | MBA HQ, 1909 M St NW, Floor B1, Washington, D.C.
Labor Law Issues in 2025 and Beyond: New Rules, New Challenges
September 9, 2025 – 10:30 AM ET
Speaker: Meredith S. Dante
Loan Originator Compensation: Where We Stand Today and Where We Could be Headed
September 9, 2025 – 1:00 PM ET
Speaker: Richard J. Andreano, Jr.
September 15-16, 2025 | The Notary Hotel, Philadelphia, PA
Are you prepared for the GSE Release?
September 16, 2025 – 9:00 AM ET
Speaker: Richard J. Andreano, Jr.
A New Era for Banking: What President Trump’s Debanking Executive Order and Related State Laws Mean for Financial Institutions, Government, and Banking Customers
A Ballard Spahr Webinar | September 24, 2025, 12 PM ET
Speakers: Alan S. Kaplinsky
MBA – Compliance and Risk Management Conference
September 28-30, 2025 | Grand Hyatt, Washington, D.C.
COMPLIANCE CONVERSATIONS TRACK: Loan Originator Compensation
September 28, 2025 – 2:15 PM ET
Speaker: Richard J. Andreano, Jr.
CaMBA – Legal Issues and Regulatory Compliance Conference
December 8-9, 2025 | Irvine Marriott Hotel, Irvine, CA
Employment Law Updates – how to protect yourself
December 9, 2025 – 11:00 AM PT
Speaker: Richard J. Andreano, Jr.
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