Public Policy

In Trump v. Slaughter, the U.S. Supreme Court made a profound change to the administrative state. The Court ruled that "for cause" removal protections for members of the Federal Trade Commission (FTC) are an unconstitutional infringement on the President's executive powers. Gone is Humphrey's Executor v. United States, the seminal case that upheld limits on the President's authority to remove FTC Commissioners, and nine decades of independent agency leadership with a degree of insulation from Presidential control. The implication of Slaughter for other independent agencies, including the...

On Tuesday, May 19th, President Trump issued two Executive Orders regarding financial services. The first, Integrating Financial Technology Innovation into Regulatory Frameworks, addresses the role of fintechs in the financial system, including supporting bank-fintech partnerships, charters, and access to Federal Reserve payment systems. The second, Restoring Integrity to America’s Financial System, covers banking products and services provided to immigrants and related BSA/AML and ability-to-repay requirements. Neither will result in immediate changes. Rather, the EOs direct the federal...

One thing in the OCC's GENIUS Act proposed rule that I can wholeheartedly endorse: "The OCC proposes to use the term 'Federal Reserve' in place of 'Board' for greater clarity because the proposed rule refers separately to boards of directors in various sections." This practice should be adopted across the bank regulatory ecosystem. The prevailing practice of using "the Board" on second reference to the Federal Reserve decreases the accessibility of regulatory documents and increases cognitive load for anyone who has to read them -- even us experts.

In a pending case brought by the union representing CFPB employees, the Administration has informed the court that CFPB will run out of funding early next year and that the Administration will not seek additional funding for the agency. This memorandum examines the implications for the CFPB’s key functions – rulewriting, supervision, enforcement, and publication of market data – should the agency cease operations in early 2026. The Dodd-Frank Act provides the CFPB with exclusive authority to prescribe rules implementing federal consumer financial laws. These laws include ECOA, EFTA, FDCPA,...

Nobody likes Vullo v. OCC, New York's challenge to the nondepository national fintech charter half a decade ago. For most people in the industry, the case stands for the idea that the OCC can’t charter national banks that don’t take deposits, unless the bank is restricted to trust company activities. The OCC dislikes this for a few reasons, but mostly because it isn’t true. The lower court’s decision against the OCC was reversed on procedural grounds, and the case went away after the applicant at issue applied for deposit insurance. Had the lower court’s substantive reasoning been put to the...

Before you get too excited about the "skinny" master account (aka payment account) proposed by Fed Governor Waller, it's important to read his words carefully. Waller repeatedly stressed that the account would be available to "legally eligible" entities. Under current law, this means depository institutions. Waller's proposal is not a recipe for payment service provider (PSP) access as adopted by the UK, EU, Canada, and others. It is a Fed compromise offer for the many "Tier 3" depository institutions that are currently eligible for master accounts that the Fed does not want to give them. To...