Navigating Changes in the First 100 Days of the Second Trump Administration
Each week of the first 100 days of the new Trump administration, we will publish updates on key federal financial services regulatory and related developments.
This week, we review the following developments as of Wednesday:
- House Passage of Senate Resolutions to Nullify Consumer Financial Protection Bureau (CFPB) Rules on Overdraft Fees and Digital Payment Apps
- House Financial Services Committee Markup
- Senate Action on Financial Nominees
- Federal Reserve Board (FRB) Governor Barr on Artificial Intelligence and Banking
- Federal Deposit Insurance Corporation (FDIC) Acting Chairman Hill’s Update on Key Policy Issues
- Justice Department Policy on Cryptocurrency Enforcement
- Securities and Exchange Commission (SEC) Statement on Stablecoins
- Office of the Comptroller of the Currency (OCC) Bulletin on Rescission of Community Reinvestment Act (CRA) Final Rule
House Passage of Senate Resolutions to Nullify CFPB Rules on Overdraft Fees and Digital Payment Apps
On April 9, 2025, the House of Representatives voted to pass two Senate Congressional Review Act resolutions: S.J. Res 18, to nullify the CFPB rule on overdraft fees; and S.J. Res 28, to nullify the CFPB rule providing for agency oversight of digital payment apps. The Senate passed both resolutions in March, and the resolutions will now go to President Trump for signature. If signed, the CFPB would be precluded from promulgating a rule on a substantially similar topic unless authorized by a law enacted subsequent to the CRA joint resolution.
House Financial Services Committee Markup
After a lengthy markup, the House Financial Services Committee approved several financial services bills for House floor action late on April 2, 2025. Specifically, the Committee approved substitute versions of H.R. 2392, the Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) Act; H.R. 2384, the Financial Technology Protection Act; H.R. 976, the 1071 Repeal to Protect Small Business Lending Act; H.R. 1919, the Anti-CBDC Surveillance State Act; and H.R. 478, the Promoting New Bank Formation Act. A number of amendments to the H.R. 2392 substitute were offered, but all were voted down.
Senate Action on OCC and SEC Nominees
On April 3, 2025, the Senate Banking Committee voted to advance to the full Senate the nominations of Jonathan Gould to be Comptroller of the Currency and Paul Atkins to be Chairman of the SEC. In his opening remarks, Committee Chairman Tim Scott (R-S.C.) said that Gould will “ensure financial institutions serve all credit-worthy Americans” and that Atkins will “provide much-needed clarity for digital assets.”
On April 9, 2025, the full Senate confirmed Atkins to be SEC Chairman. Atkins previously served as a Commissioner of the agency from 2002 to 2008.
FRB Governor Barr on Artificial Intelligence and Banking
In a speech on April 4, 2025, FRB Governor Barr spoke on the topic of AI, fintechs, and banks. He noted the possibilities of generative AI uses in financial services, such as analysis of data and documents, which could improve credit underwriting, and use of generative AI-powered chatbots to assist with customer service. He added that it is appropriate for banks to be cautious in adopting AI since the technology is not yet mature for many use cases, and he called out data security and inadvertent inclusion of personal or proprietary information as key concerns.
On use of generative AI in the context of bank–fintech relationships, Barr said that “there is a good chance that fintechs will help drive widespread Gen AI adoption in financial services,” in part because fintechs do not have to integrate new technology into older infrastructure, fintechs often need to make creative use of new technology to quickly demonstrate outcomes, and fintechs often can focus on one product rather than various business lines. Barr added that banks and fintechs could accelerate the use of generative AI in financial services, either from direct competition or through partnerships.
With respect to AI risk management, Barr recommended that banks familiarize themselves with trends in generative AI, monitor AI developments outside of banking, and incentivize good risk management practices by fintech partners. He emphasized the importance of fintechs and banks addressing who owns customer data and potential conflicts if bank customer data are included in a fintech’s generative AI model. Barr added that fintechs should “prioritize identifying biases in training data sets” and “adapt Gen AI solutions to be compatible with sound risk management approaches.”
FDIC Acting Chairman Hill’s Update on Key Policy Issues
In a speech at the American Bankers Association Washington Summit on April 8, 2025, FDIC Acting Chairman Travis Hill provided an update to his remarks on January 21, outlining the policy focus of the FDIC. He focused on the following updates to FDIC actions:
- De Novo Banks: Hill said the FDIC is reexamining deposit insurance applications from innovative business models like fintechs. He also announced an upcoming request for information regarding industrial loan companies.
- Digital Assets: Hill committed to a “more open-minded approach” to digital assets and blockchain, and discussed a variety of questions being considered for upcoming crypto‑related guidance.
- Resolution Planning: Hill said the FDIC will issue updated frequently asked questions related to the upcoming insured depository institution resolution plan submissions.
- Asset Thresholds: Hill discussed the lack of adjustments for inflation in some asset thresholds, including the $10 billion asset threshold applicable to small banks. He said the FDIC is examining whether to raise those thresholds.
Justice Department Policy on Cryptocurrency Enforcement
On April 7, 2025, Deputy Attorney General Todd Blanche sent a memorandum to all Department of Justice (DOJ) employees stating that the DOJ “will no longer pursue litigation or enforcement actions that have the effect of superimposing regulatory frameworks on digital assets” and that the National Cryptocurrency Enforcement Team will be disbanded. Blanche went on to describe new enforcement priorities for the DOJ, including a focus on individuals who target digital asset investors or individuals who use digital assets in crimes such as organized crime financing and terrorism.
The memorandum directs prosecutors to avoid charging regulatory violations for digital assets, which include unlicensed money transmission, unregistered broker-dealer violations, and unregistered securities offerings. The memorandum points to Executive Order 14178 (Strengthening American Leadership in Digital Financial Technology) in support of the change and states that the DOJ will participate in President Trump’s Working Group on Digital Asset Markets to develop a digital asset framework.
For more details on the DOJ's new enforcement policy for digital assets, see our client alert.
SEC Statement on Stablecoins
On April 4, 2025, the Staff of the SEC’s Division of Corporation Finance issued a statement that certain stablecoins, referred to as “Covered Stablecoins”, are not securities and therefore not subject to registration under the federal securities laws.
This is the third in a series of statements by the Staff analyzing whether certain digital assets constitute securities under the federal securities laws. The first two statements related to meme coins and proof-of-work crypto mining. In all three statements, the Staff concluded that the digital asset under consideration was not a security, removing it from the SEC’s regulatory purview.
While the statement offers some regulatory clarity for market participants and suggests that the current SEC is unlikely to pursue enforcement actions related to Covered Stablecoins, the statement does not address other enforcement risk such as state securities enforcement or private rights of action, nor does it address other legal frameworks such as banking and consumer protection laws.
For more details on the stablecoin statement, see our client alert.
OCC Bulletin on Rescission of CRA Final Rule
On April 7, 2025, the OCC released a bulletin on its intent to issue a proposal to rescind the CRA final rule issued jointly with the FDIC and FRB in October 2023. According to the bulletin, the proposal will seek comment on reinstating the CRA rules that existed prior to the October 2023 rule. The October 2023 rule is not currently in effect, as the rule’s implementation was stayed due to ongoing litigation, and the OCC is using the pre-October 2023 standards in evaluating banks for CRA performance.
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