The financial services industry is facing a period of significant transformation as the Trump administration moves swiftly to reshape regulatory policies, according to Venable professionals speaking in a webinar. This panel discussed ongoing shifts in banking, fintech, payments, and cryptocurrency regulation.
"The Trump administration is signaling a dramatic shift in the government's approach to financial services regulation," said partner Jonathan Pompan. He noted that the Consumer Financial Protection Bureau (CFPB) has come to a standstill, but that doesn't mean compliance obligations and enforcement risk have disappeared. Despite the CFPB's status, enforcement risks persist from state attorneys general, state regulators, and private rights of action – while the potential for regulatory snapback remains a longer-term consideration across various enforcement and regulatory bodies.
One of the most dramatic policy shifts is in the realm of cryptocurrency, where the administration is prioritizing deregulation to make the U.S. a global leader in digital assets. Partner Chris Boone highlighted a recent executive order that rescinds previous restrictions and prohibits the development of a Central Bank Digital Currency (CBDC).
Additionally, Trump's nominee for the Securities and Exchange Commission (SEC), Paul Atkins, is expected to ease regulatory scrutiny of cryptocurrency firms. This marks a stark departure from the previous administration's regulatory stance, which had led several crypto firms to block U.S. customers or move operations overseas. "It's really hard to overstate how significant a shift this is," said Pompan, adding that foreign crypto firms are now looking to expand into the U.S. under the new regulatory climate.
Beyond cryptocurrency, the administration is also revisiting long-standing financial regulations, particularly those impacting fintech partnerships, payments, and consumer lending. Partner Andrew Bigart pointed to increased scrutiny of bank-fintech partnerships, particularly in areas like third-party risk management and compliance obligations. Meanwhile, state regulators are also making moves, with California tightening its regulations and other states exploring stricter licensing requirements for financial services firms, noted associate Connor Webb.
With an uncertain regulatory future ahead, the panelists urged financial institutions to stay vigilant. "There's a fork in the road," Pompan said. "We don't know yet if this administration will maintain the CFPB as a functional agency in a deregulatory mode or pursue more drastic changes."
"The overarching theme of the first month of the second Trump administration is an aggressive and deliberate effort to fulfill campaign promises and implement his agenda as swiftly as possible," said senior policy advisor Sarah Donovan.
Update (February 13): Since our webinar on the Consumer Financial Services Outlook 2025, leadership at the CFPB has continued to evolve, although the agency remains on "pause." At the time of the webinar, Scott Bessent was serving as the acting director. Since then, Russell Vought has assumed the role, and now Jonathan McKernan has been nominated to lead the Bureau. Despite these changes, our discussion in the webinar remains highly relevant, providing insight into what to expect as the agency's future direction becomes clearer under new leadership, and impacts the consumer financial services legal landscape.
To learn more about upcoming webinars or to watch past recordings from our series, Transition Outlook: What to Expect from the Second Trump Administration, click here. The weekly webinar series runs through March 2025.