As the federal Consumer Financial Protection Bureau (CFPB) retreats from its traditional enforcement and supervision roles, financial services companies are entering a period of regulatory uncertainty — and heightened legal risk. But uncertainty doesn’t just bring exposure; it also creates opportunity.
At a recent Venable webinar, partners Jonathan Pompan, Michael Bresnick, and Chris Boone discussed how companies can rethink how they approach compliance, risk, and innovation in a landscape no longer shaped by aggressive federal oversight alone.
In a wide-ranging discussion, the panel explored how the vacuum left by the CFPB is being filled — by state regulators, the FTC, and private litigants — and what that means for institutions operating in sectors like fintech, crypto, and digital payments.
Deregulatory shifts may open new doors, but the speakers cautioned that the underlying legal framework remains firmly in place. Companies that calibrate their strategies to this evolving reality—balancing measured compliance with forward-looking innovation—will be well positioned to thrive as the regulatory map continues to evolve.
Consumer Financial Laws Still Govern — Even as Oversight Retreats
The CFPB is “functionally…largely dormant,” said Pompan. Although the agency technically remains intact and its statutes are still enforceable, he noted that “supervision is essentially paused,” and “most supervision and enforcement are no longer priorities.” The acting CFPB director has “rescinded nearly all of the Chopra-era guidance” and significantly reduced staffing, further underscoring the Bureau’s diminished role.
This shift in regulatory posture is allowing companies to rethink how they structure compliance and oversight. “It means that they no longer know exactly where the hook is,” Pompan said. He cautioned that “companies should not assume deregulation equals de-risking—particularly with states able to step into any perceived regulatory gaps.”
While federal oversight may have waned, federal consumer financial law remains unchanged. “For legal and compliance teams, this is a moment that calls for discipline: document your interpretations, update your risk assessments, and create audit trails showing good-faith compliance,” Pompan said. “In this regulatory vacuum, your process and continued involvement by legal and compliance is your protection — and that will need to be self-driven.”
He continued: “This is a strategic moment to review compliance programs, especially state by state, and ensure core practices align with both current federal and emerging state expectations, while also being mindful of the potential for a future regulatory ‘snapback.’”
State AGs, FTC, and DOJ Step in to Fill Federal Oversight Gap
With the CFPB retreating, other regulators are moving into the breach. Boone noted that California and New York are actively expanding their reach. Pompan confirmed that these states are “definitely picking up the pace,” with California’s DFPI and New York’s DFS both seeking to grow their supervisory role. He cautioned that companies should now prepare for a “51-state compliance strategy” and “more acute and less predictable” risks.
Meanwhile, Bresnick made it clear that “the FTC is alive and well and in fact, it seems to be thriving.” He highlighted a recent $5 million settlement with UK-based payment processor Paddle, in which the agency emphasized that “vigorous enforcement” of payment systems protects consumers from fraud. The DOJ is also signaling strong interest in consumer fraud and financial crime, particularly where institutions facilitate bad actors. “If you are conspiring with the bad merchants,” Bresnick warned, “they’re going to prosecute you.”
“If you’re the company they choose to pursue — especially in an area like fintech, crypto, or receivables management — it can be a very public, very painful process,” said Pompan. “And, for advertisers and marketers, including lead generators, you have a history of enforcement in consumer financial services that transcends administrations,” he added. “No one wants to be the FTC’s next use-case for what ‘not to do.’”
Crypto Deregulation and the Path Forward for Compliance Teams
The conversation turned toward digital assets and opportunities, where Boone described “a fundamental change in how the federal government is engaging with cryptocurrency technology.” He cited executive orders aimed at promoting innovation and repealing prior restrictions, adding that the new posture is to “make the United States the crypto capital of the planet.” But he emphasized caution: “The welcome mat is out, but the rules still matter.”
The SEC has also softened its stance, according to Boone, withdrawing enforcement actions and offering guidance that staking, mining, and stablecoin activities “when properly structured are not securities transactions.” Still, he warned, “simply branding something a meme coin won’t let issuers evade the securities laws.”
Banking regulators have also clarified and softened their positions on several topics related to banking activities in the crypto space, according to Boone, including by issuing interpretive letters permitting banks to provide custody services and engage in other activities.
Pompan concluded with a broader observation for legal and compliance teams: “The statutes that are still in place are still the law,” and “the ability to show the work…will be as important as ever.”
To learn more about upcoming webinars in this series, Deregulation Nation: Legal Perspectives on the Changing Rules, click here. The series runs through the summer.