Fintech and Payments 2025 – Predictions for the Year Ahead

Nobody would ever accuse the life of a fintech and payments compliance specialist to be dull. The last few months of 2024 certainly lived up to this standard. The end of the year saw flurry of rulemakings and moves by banking and fintech regulators trying to clean house before the change of administrations.

Well, the change of administrations has occurred and the whiplash regulatory environment has been replaced by . . . uncertainty and an eerie quietness. Most notably, the CFPB has effectively been shuttered for the time being and, if reports are to be believed, may have its work force pared down to a mere 50 employees.

Let’s dive head first into the uncertainty and make some unfounded predictions for the year ahead.

Final(ish) Rules will remain – at best – in limbo for the time being

Whether finalized and waiting compliance deadline, such as the CFPB’s open banking rule, or proposed but left unfinished like the CFPB’s interpretive rule for earned wage access products, the watchword(s) for 2025 will be . . . wait, what now? The open banking rule may survive pending potential Congressional Review Act review or outside litigation but the earned wage access rule, along with all similarly “in process” rulemakings, is effective dead. The year ahead will be filled with determining what additional actions or guidance, if any, may be helpful from the federal level.

More likely, the regulatory action will turn to the states. This is particularly true for product verticals like earned wage access where we have seen a number of states propose legislation in recent years and some states, such as Wisconsin and Missouri, actually enact laws.

Fewer Rules, Less (Federal) Enforcement

One thing made perfectly clear in the first months of the Trump Administration is that the appetite for banking and fintech rulemakings among the powers that be at the federal regulators is not high. At a minimum we would expect 2025 to see far fewer rulemaking initiatives and interpretive guidance than we saw in 2024. We also expect to see far less enforcement activity at the federal level, from the CFPB in particular. Some of this no doubt reflects a change in policy and viewpoint of the people heading the agencies, some of it, however, is just a practical reality of what is possible with a much reduced federal workforce.

And . . . What about the states?

Much has been made in recent weeks of the states – either through their attorney’s general offices or state banking departments – stepping in and filling the compliance void left by the CFPB. While it’s true that many states have the technical ability to fill this role by ramping up enforcement of their state UDAP laws or non-bank licensing requirements, one can’t forget that states face their own budgetary and resource limitation issues and may not want to allocate limited state resources to greater enforcement activity. For that reason, while we may see an uptick in enforcement in states like California or New York, we would not expect to see a material change in the enforcement trends at the state level.

As always, we will be keeping an eye on all of these trends and many more in the year ahead!