April 17 – Read the newsletter below for the latest Mortgage Banking and Consumer Finance industry news, written by Ballard Spahr attorneys. In this issue, we delve into the CFPB's decision to reopen rulemaking on the Section 1071 small business loan data collection and reporting rule, provide insights into the current state of the CFPB, highlight the published 2024 HMDA modified loan application data, and much more.
- Podcast Episode: Everything You Want to Know About the CFPB as Things Stand Today, and Lots More–Part 1
- Podcast Episode: Prominent Journalist David Dayen Describes His Reporting on the Efforts of Trump 2.0 to Curb the CFPB
- Podcast Episode: A Deep Dive Into Judge Jackson’s Preliminary Injunction Order Against CFPB Acting Director Vought
- DC Circuit so Far Largely Upholds Judge Jackson’s Order Preliminarily Enjoining the CFPB Acting Director From Shutting Down the CFPB
- Two Former Democratic FTC Commissioners File Suit Over Dismissal
- Chief Justice Temporarily Allows Trump Administration to Fire Members of Independent Agencies
- New Leadership at the Office of Federal Contract Compliance Programs Signals Potential Overhaul of Affirmative Action Compliance Framework
- The CFPB to Reopen Rulemaking on the Section 1071 Small Business Loan Data Collection and Reporting Rule
- 2024 HMDA Modified Loan Application Data Published
- SEPA SHRM and Ballard Spahr 2025 HR Legal Summit
- Republicans Ask Federal Banking Agencies to Withdraw Rules, Guidance
- Financial Services Committee Republicans Call on the CFPB to Withdraw Rules, Guidance
- Looking Ahead
Our podcast show is Part 1 of a repurposed interactive webinar that we presented on March 24, featuring two of the leading journalists who cover the CFPB – Jon Hill from Law360 and Evan Weinberger from Bloomberg.
Our show began with Jon and Evan chronicling the initiatives beginning on February 3 by CFPB Acting Directors Scott Bessent, Russell Vought, and DOGE to shut down or at least minimize the CFPB. These initiatives were met with two federal district court lawsuits (one in DC brought by the labor unions who represents CFPB employees who were terminated and the other brought in Baltimore, MD, by the CFPB and others) challenging one or more of these initiatives. Jon and Evan described the lawsuits in detail. While the Baltimore lawsuit was dismissed on the basis of lack of ripeness under the Administrative Procedure Act, Judge Amy Berman Jackson issued a TRO freezing the CFPB from terminating more CFPB employees through the end of March while she decides whether to enter a further injunction with respect to the CFPB’s initiatives.
Ballard Spahr partners, Rich Andreano and John Culhane, then gave an up-to-date status report on CFPB (a) final rules being challenged in litigation and/or eligible to be challenged under the Congressional Review Act; (b) final rules not being challenged in litigation, which may be repealed or amended or whose effective or compliance dates may be extended under the Administrative Procedure Act; (c) proposed rules; and (d) non-rule written guidance. Rich and John paid particular attention to the following final rules:
- The Small Business Loan Data Collection and Reporting Rule under Section 1071 of Dodd-Frank
- The Nonbank enforcement order Registry Rule
- The Fair Credit Reporting Act “Data Broker” Rule
- The Residential Property Assessed Clean Energy (PACE) Financing Rule
- The Residential Mortgage Servicing Proposed Rule
- Credit Card Penalty fees under Reg Z (Late Fee Rule)
- Personal Financial Data Rights (Open Banking) Rule under Section 1033 of Dodd-Frank
- Overdraft Lending Rule Applicable to very large financial institutions
- Prohibition on creditors and consumer reporting agencies reporting medical debt under Reg V
Part 1 of our podcast concludes with Rich and John describing the fact that supervision and examination of banks and nonbanks is apparently on hold.
This podcast show was hosted by former practice group leader for 25 years of the Consumer Financial Services Group and now Senior Counsel, Alan Kaplinsky.
To listen to this episode, click here.
Consumer Financial Services Group
The podcast show features a discussion with David Dayen, executive editor of the American Prospect, which is an online magazine about ideas, politics, and power. He’s the author of “Chain of Title: How Three Ordinary Americans Uncovered Wall Street’s Great Foreclosure Fraud,” which was published in 2016. David has written and published about 10 or so articles in which he chronicles in great detail the apparent effort by the Trump administration, acting through Scott Bessent and Russell Vought, to dismantle the CFPB by abruptly ordering a cessation of all activities and layoffs of probationary and term employees and a plan to layoff 1,300 or so additional employees.
Because this plan would have crippled the CFPB, two lawsuits were initiated in rapid fashion against Acting Director Vought seeking to enjoin him from pursuing this strategy. One lawsuit was brought by the two labor unions representing CFPB employees and others in the U.S. District Court for the District of Columbia and got assigned to Judge Amy Berman Jackson. The second lawsuit was brought by the City of Baltimore and others in the U.S. District Court for the District of Maryland. David describes in detail the case pending before Judge Jackson, including the hearings at which several CFPB employees testified. Those employees painted a very grim picture of the effort to shut down the agency. The DOJ lawyer stated that there was never an intent to shut down the CFPB and that the steps taken by the Acting Directors to “freeze” the CFPB were similar to steps taken by any new administration in order to provide time to evaluate the situation and decide what changes should be made to reflect the new administration’s policy objectives.
Shortly after the recording of this podcast, Judge Jackson issued on March 28 a 112-page opinion and three-page order in which she required the reinstatement with back pay of all CFPB employees that had been terminated, enjoined the CFPB from terminating any employees except for good cause related to the individual employee, fully maintain the consumer complaint portal, ordered the defendants to reinstate all third-party contracts which had been earlier terminated, ordered the defendants to not enforce a February 10 stop-work order and required that the CFPB not destroy any records. The defendants have filed a notice of appeal to the D.C. Circuit Court of Appeals. On March 29. On March 31, the defendants filed a motion in the Court of Appeals to stay Judge Jackson’s order. See this blog for more detail about Judge Jackson’s opinion.
Because of the importance of Judge Jackson’s opinion, Alan Kaplinsky and Joseph Schuster have recorded a special (additional) podcast show, where we dissected Judge Jackson’s opinion and order and the other lawsuit brought by the City of Baltimore against Acting Director, Russell Vought, challenging his consideration of returning operating finds to the Federal Reserve Board or Treasury. This podcast will be released Friday, April 4 on Consumer Finance Monitor, the weekly podcast show of the Consumer Financial Services Group at Ballard Spahr LLP, and it will be available on all major podcast platforms.
The Judge in the City of Baltimore case, in which the plaintiffs had not established nearly as complete a record as the case before Judge Jackson, denied the motion for a preliminary injunction based on the court’s belief that there was no final order which could be challenged under the Administrative Procedure Act.
We also discussed the possibility that Congress could subject the CFPB to funding through congressional appropriations by putting such language in the budget reconciliation bill which can be enacted by a simple majority and not 60 votes in the Senate.
Former Chair for 25 years and now Senior Counsel of the Consumer Financial Services Group, Alan Kaplinsky, hosts the discussion.
To listen to this episode, click here.
Consumer Financial Services Group
Our special podcast show deals primarily with a 112-page opinion and three-page order issued on March 28, 2025, by Judge Amy Berman Jackson of the U.S. District Court for the District of Columbia in a lawsuit brought, among others, by two labor unions representing CFPB employees against Acting Director Russell Vought. The complaint alleged that Acting Director Vought and others were in the process of dismantling the CFPB through various actions taken since Rohit Chopra was fired and replaced by Acting Director Scott Bessent and then Acting Director Russell Vought. This process included, among other things, the termination of probationary and term employees and possibly another 1,300 or so employees through a reduction-in-force, the issuance of a stop-work order, the closure of the CFPB’s main office in DC and branch offices throughout the country, the termination of most third-party contracts, the decision not to request any additional funding from the Federal Reserve Board for the balance of the fiscal year, and the voluntary dismissal of several enforcement lawsuits.
Senior Counsel and former Chair of Ballard Spahr’s Consumer Financial Services Group, Alan Kaplinsky, and Partner in the Consumer Financial Services Group, Joseph Schuster, discuss each part of the preliminary injunction issued by Judge Jackson which, among other things, required the CFPB to rehire all probationary and term employees who had been terminated, prohibited the CFPB from terminating any CFPB employee except for just cause (which apparently does not include lack of work because of the change in focus and direction of the CFPB), required the CFPB not to enforce a previous “stop-work” order or reduction-in-force. We observed that Judge Jackson’s order has required the CFPB to maintain for now a work force that is not needed for the “new” CFPB.
We also discuss that the preliminary injunction order does not require the CFPB to maintain any of the regulations promulgated or proposed by Rohit Chopra or to continue to prosecute any of the enforcement lawsuits brought by Director Chopra.
DOJ filed a notice of appeal on March 29 and on March 31 filed a motion in the DC Court of Appeals to stay Judge Jackson’s order. (After the recording of this podcast, the DOJ filed in the Court of Appeals a motion seeking a stay of Judge Jackson’s order. Pending a hearing on April 9, the court issued an administrative stay of Judge Jackson’s order. The three-judge panel is composed of two Trump appointees and one Obama appointee.) A copy of the blog co-authored by Alan and Joseph is linked here.
We also discuss another lawsuit initiated by the City of Baltimore and one other plaintiff against Acting Director Vought in Federal District Court for the District of Maryland seeking to enjoin him from returning to the Federal Reserve Board or the Treasury funds held by the CFPB. The court denied the motion for preliminary injunction on the basis that it was not ripe for adjudication under the Administrative Procedure Act because the CFPB never actually returned any funds.
Finally, Alan expresses surprise that the Acting Director has not relied on the argument that all funds received by the CFPB after September 2022 were unlawfully obtained because the Dodd-Frank Act stipulates that the CFPB can be funded only out of “combined earnings of the Federal Reserve Banks” and the fact that there have only been huge combined losses of the Federal Reserve Banks since September 2022 which continue through today and are likely to continue through the foreseeable future.
A link to the podcast is here.
Alan S. Kaplinsky and Joseph J. Schuster
On Friday, April 11, a panel of the D.C. Circuit Court of Appeals modified Judge Jackson’s preliminary injunction order of March 28 pending appeal, as follows:
- Provision two (which required blanket reinstatement of probationary and term employees that were fired by the CFPB) stayed insofar as it requires the CFPB to reinstate employees whom defendants have determined, after an individualized assessment, to be unnecessary to the performance of defendants’ statutory duties.
- Provision three (which mandated that the CFPB not terminate any CFPB employee, except for cause related to the individual employee’s performance or conduct; and not issue any notice of reduction-in-force to any CFPB employee) stayed insofar as it prohibits the CFPB from terminating or issuing a notice of reduction in force to employees whom the CFPB has determined, after a particularized assessment, to be unnecessary to the performance of its statutory duties.
- Provision four (which mandated that the CFPB not enforce the February 10, 2025, stop-work order or require employees to take administrative leave in furtherance of that order, and not reinstitute or seek to achieve the outcome of a work stoppage) was allowed to stay in effect with the understanding that it allows work stoppages that the CFPB has determined, after a particularized assessment, would not interfere with the performance of its statutory duties.
- Provision eight (which required that the CFPB report to the court by April 4 confirming compliance and that all appropriate individuals and entities have received notice of the order) was stayed, something which Judge Jackson already agreed to.
- All other provisions of the preliminary injunction were allowed to remain in full effect pending further order of the court.
The Court of Appeals did not define in the order or at oral argument on April 9 what it means by the term “particularized assessment.” Because of the lack of clarity in its meaning and the likelihood that the Court of Appeals will decide the appeal of Judge Jackson’s preliminary injunction order by the end of May or early June, the CFPB would be wise to follow Judge Jackson’s order before it was modified or to seek approval from the court before refusing to reinstate probationary or term employees or effectuating any reduction-in-force.
The Court of Appeals, in its order, also set the following accelerated briefing schedule:
- CFPB’s brief due April 25
- Plaintiffs’ opposition brief due May 9
- CFPB’s reply brief due May 13
- Oral argument has been scheduled for May 16 at 2:00 PM ET.
Apparently, because the Trump administration’s attempts to shut down the CFPB have so far been thwarted by the courts, Professor Hal Scott, has written another op-ed which was published in today’s Wall St Journal in which he once again urges the CFPB to switch course and take the position that its funding has been unlawful since September 2022 and it must cease operations. He recommends the following action: “Since the bureau is operating illegally, the president can halt its work immediately by executive order. The order should declare that all work at the CFPB will stop, that all rules enacted since funding became illegal in September 2022 are void, and that no new rules will be enforced.” Such an executive order will undoubtedly be challenged in court and the outcome is uncertain. Opponents will obviously question why this action was not taken long ago.
Alan S. Kaplinsky and Joseph J. Schuster
Two Former Democratic FTC Commissioners File Suit Over Dismissal
The two Democratic FTC members who were fired by President Trump have filed suit in federal court challenging their dismissal.
Alvaro Bedoya and Rebecca Slaughter filed suit in U.S. District Court for the District of Columbia contending that their dismissals were illegal since the FTC is supposed to be an independent agency. They said that President Trump’s decision was in direct violation of federal law and Supreme Court precedent.
In their suit, Bedoya and Slaughter said that under the FTC Act, the President may only remove a commissioner for “inefficiency, neglect of duty, or malfeasance in office.” In addition, they said that FTC members are protected by the 1935 decision of the Supreme Court in Humphrey’s Executor v United States, which upheld the constitutionality of the for cause removal standard applicable to FTC commissioners. In its 2020 ruling in Seila Law v. CFPB, the Supreme Court distinguished Humphrey’s Executor in finding the for cause removal standard applicable to the sole director of the CFPB to be unconstitutional.
“In short, it is bedrock, binding precedent that a president cannot remove an FTC commissioner without cause,” the two said, in their suit. “And yet that is precisely what has happened here: President Trump has purported to terminate Plaintiffs as FTC commissioners, not because they were inefficient, neglectful of their duties, or engaged in malfeasance, but simply because their ‘continued service on the FTC is’ supposedly ‘inconsistent with [his] administration’s priorities.’”
The two plaintiffs said that the President’s action is indefensible and they ask the court to declare the President’s attempted removals are unlawful and ineffective. They ask that the court rule that Bedoya and Slaughter are still members of their commissions.
They may face an uphill battle though.
In two related cases, involving the President’s attempt to remove a member of the National Labor Relations Board and a member of the Merit System Protections Board, notwithstanding federal laws that place similar restrictions on the President’s removal authority, the D.C. District Court granted summary judgment for the individuals involved, declaring that they remained members of their respective boards, and issued injunctions prohibiting government officials from enforcing President Trump’s removal orders.
However, the administration appealed those decisions to the D.C. Circuit Court and sought emergency stays pending appeal. Those stays were recently granted by a 2-1 vote of a panel of the D.C. Circuit, as the two judges who voted for the stays concluded in their respective concurring statements that the government was likely to succeed in showing that those restrictions on removal are unconstitutional. Their respective decisions were influenced, in part, by the Seila Law ruling.
We invite you to learn more and join us for a webinar at 12:00 PM ET on May 13, 2025, titled “What is Happening at the Federal Agencies (Other Than the CFPB) That is Relevant to the Consumer Financial Services Industry?” Click here to review the topics that will be covered and to register for this webinar.
John L. Culhane, Jr., Richard J. Andreano, Jr., and Alan S. Kaplinsky
Chief Justice Temporarily Allows Trump Administration to Fire Members of Independent Agencies
Chief Justice John Roberts has issued a temporary stay of a decision by the U.S. Court of Appeals for the District of Columbia that barred the Trump administration from firing members of two independent agency boards.
The stay follows a 7-4 appeals court decision that Cathy Harris, the chairwoman of the Merit Systems Protection Board, and Gwynne Wilcox, a member of the National Labor Relations Board, should return to their jobs. President Trump had fired the two women.
The administration asked for the stay and for the Supreme Court to consider the case in May.
“This case raises a constitutional question of profound importance: whether the president can supervise and control agency heads who exercise vast executive power on the president’s behalf, or whether Congress may insulate those agency heads from presidential control by preventing the president from removing them at will,” Solicitor General D. John Sauer, wrote.
The case is being closely watched by independent agencies as it is a test of President Trump’s power over boards or similar bodies governing those agencies. For instance, President Trump has dismissed two Democratic members of the FTC. Those two commissioners, Alvaro Bedoya and Rebecca Slaughter, also have filed suit challenging their dismissals.
The eventual fate of the fired members of the independent boards remains uncertain.
When the appeals court said that Harris and Wilcox may only be fired for cause, it relied on two Supreme Court rulings, Humphrey’s Executor and Weiner v United States, that upheld that argument.
But the Trump administration said a prohibition on the president’s ability to remove members of independent agencies is unconstitutional.
The administration is asking the Supreme Court for an emergency stay of the court’s ruling, contending that Humphrey’s does not apply to multimember agencies that wield substantial executive power.
“The President should not be forced to delegate his executive power to agency heads who are demonstrably at odds with the administration’s policy objectives for a single day—much less for the months that it would likely take for the courts to resolve this litigation,” the Solicitor General argued.
The full appeals court disagreed.
Discussing Humphrey’s Executor, and Weiner, the court said, “The Supreme Court has repeatedly told the courts of appeals to follow extant Supreme Court precedent unless and until that Court itself changes it or overturns it.”
”The Supreme Court’s repeated and recent statements that Humphrey’s Executor and Wiener remain precedential require denying the government’s emergency motions for a stay pending appeal,” the appeals court added.
Consumer Financial Services Group
On March 24, 2025, the U.S. Department of Labor announced the appointment of Catherine Eschbach as Director of the Office of Federal Contract Compliance Programs (OFCCP), the agency charged with overseeing regulation and enforcement of affirmative action laws for government contractors and subcontractors. Eschbach signaled a shift in the agency’s mission, stating the OFCCP “will restore a merit-based system to provide all workers with equal opportunity.”
In a follow-up email to her staff, Eschbach stated that “all reform options are on the table” and described much of the OFCCP’s historic enforcement as “out of step, if not flat out contradictory, to our country’s laws.” These comments from Eschbach signal a potential sea change in how the OFCCP approaches affirmative action compliance—especially in the wake of the Supreme Court’s decision in Students for Fair Admissions v. Harvard, which has spurred increased scrutiny of diversity, equity, and inclusion (DEI) programs across both public and private sectors.
OFCCP’s New Stated Enforcement Priorities
According to Eschbach, the following are among OFCCP’s new priorities:
- Mandating federal contractors to “wind down” unlawful DEI and affirmative action plans (AAPs) and practices within 90 days of the rescission of Executive Order 11246. As such, after April 21, 2025, (91 days after the rescission of Executive Order 11246), the OFCCP plans to verify and implement all enforcement options to ensure compliance with this announcement;
- Reviewing previously submitted AAPs for indicators of unlawful discrimination and determining whether further investigation and enforcement actions are needed;
- Investigating DEI programs across publicly traded corporations, large nonprofit associations, foundations with assets of $500 million or more, state and local bar and medical associations, and institutions of higher education with endowments over $1 billion;
- Scrutinizing OFCCP’s own authority under VEVRAA and Section 503 of the Rehabilitation Act for enforcement related to veterans and workers with disabilities; and
- Documenting compliance costs under prior DEI frameworks and assessing the legality of prior disparate impact enforcement.
Executive Order 11246 in the Crosshairs
Among the most notable developments is Director Eschbach’s indication that the agency will focus on its regulations and enforcement practices following the President’s rescission of Executive Order 11246 on January 21, 2025. E.O. 11246 has served as the cornerstone for OFCCP’s authority to require AAPs from federal contractors and subcontractors. Although the executive order has been rescinded, many of its implementing regulations technically remain in effect until formally withdrawn or replaced, creating legal uncertainty about ongoing obligations, such as the collective of applicant EEO data. This signaled focus on E.O. 11246 suggests the OFCCP may soon initiate rulemaking to revise or rescind existing regulations tied to E.O. 11246.
Affirmative Action Plan Audits and DEI Enforcement
Eschbach stated that the OFCCP will begin verifying whether contractors have properly wound down their use of AAPs within 90 days, and whether the action plans in existing or previously submitted AAPs reflect unlawful preferences. She further suggested that these plans may be used to identify targets for enforcement audits—raising the possibility of a new wave of government investigations focused on whether white people and males have been the subject of discrimination and the legality of DEI practices.
These potential OFCCP audits mirror similar efforts at the EEOC, which has also indicated a desire to examine whether employer DEI initiatives run afoul of Title VII, as reflected in the 20 investigatory letters issued by Acting EEOC Chair Andrea Lucas to large law firms.
Veterans and Individuals With Disabilities
The OFCCP indicated it will focus on its enforcement obligations under the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA), which protects veterans from job discrimination and requires federal contractors to set benchmarks for hiring protected veterans. The OFCCP will also focus its enforcement efforts on Section 503 of the Rehabilitation Act, prohibiting the federal government and federal contractors from discriminating against employees based on their disability.
In addition to these enforcement efforts, the OFCCP will also determine if “new rulemaking is necessary” and whether investigation and enforcement actions are “best housed” within OFCCP.
Litigation Update: Certification Requirement Enjoined
Notably, federal contractors under the Department of Labor are, at least temporarily, no longer required to certify their affirmative action compliance through the OFCCP’s Contractor Portal. The certification mandate—initially introduced as part of OFCCP’s increased accountability measures—was recently enjoined by a federal court in Chicago Women in Trades v. OFCCP, casting further doubt on the agency’s ability to enforce AAP compliance under its current legal framework.
Ballard Spahr’s Labor and Employment Group frequently advises employers on issues related to labor employment and policy. We will continue to monitor the new administration’s agenda and the impact of further antidiscrimination laws and interpretation. Please contact us if we can assist you with these matters.
Dana Mydland, Shirley S. Lou-Magnuson, and Brian D. Pedrow
As we have reported previously, including here, here, and here, the CFPB’s section 1071 small business loan data collection and reporting rule is facing court challenges. The U.S. Court of Appeals for the Fifth Circuit has stayed compliance with the rule for many financial institutions.
Most recently, the CFPB filed a response to a motion for a stay by the Revenue Based Finance Coalition in the lawsuit before the U.S. District Court for the Southern District of Florida in which it advised the court that “CFPB’s new leadership has directed staff to initiate a new Section 1071 rulemaking. The CFPB anticipates issuing a Notice of Proposed Rulemaking as expeditiously as reasonably possible.” The rule significantly expanded the data reporting categories specified by Congress and has been subject to criticism from small business lenders and their representatives and members of Congress. Presumably, the CFPB will propose a more limited section 1071 rule.
Last year Congress voted to disapprove the section 1071 rule under the Congressional Review Act, but President Biden vetoed the measure and Congress was unable to override the veto. Efforts are underway in the current Congress to repeal section 1071.
With regard to the motion for a stay of the rule, in its filing the CFPB stated “[b]ecause the anticipated rulemaking process may moot or otherwise resolve this litigation, holding this matter in abeyance would conserve the court’s resources.” The CFPB also stated that “staying the Final Rule’s effective date and holding the litigation in abeyance would not prejudice any party, as [the CFPB] agree[s] with Plaintiff’s request for relief here.” The CFPB proposed to the court that it submit periodic status reports every 90 days during the pendency of the rulemaking, and advised that it will promptly inform the court when the rulemaking process is complete.
Separately, on April 2, the House Financial Services Committee approved H.R. 976, which would repeal section 1071.
Richard J. Andreano, Jr. and John L. Culhane, Jr.
2024 HMDA Modified Loan Application Data Published
The CFPB has announced that Home Mortgage Disclosure Act (HMDA) Modified Loan Application Register (LAR) data for 2024 are now available on the Federal Financial Institutions Examination Council’s (FFIEC) HMDA Platform for about 4,898 HMDA filers.
The data published contains loan-level information filed by financial institutions and modified to protect consumer privacy.
For increased access to the public, the annual loan-level LAR data for each HMDA filer are available online. In the past, users could only obtain LAR data by making requests to specific institutions for their annual data.
To allow for easier public access to all LAR data, the Consumer Financial Protection Bureau’s 2015 HMDA rule made the data for each HMDA filer available electronically on the FFIEC’s HMDA Platform.
Additionally, for institution-specific modified LAR files, users can download one combined file that contains all institutions’ modified LAR data.
HMDA users also may find the CFPB’s Beginner’s Guide to Accessing and Using HMDA Data useful for background on HMDA and tech tips for understanding and analyzing the data.
The 2024 HMDA Loan Application Register data can be found on the FFIEC’s HMDA Platform, here.
SEPA SHRM and Ballard Spahr 2025 HR Legal Summit
Participating in SEPA SHRM’s premier legal conference, co-hosted with Ballard Spahr’s Labor and Employment Group, is essential for HR professionals and in-house to stay informed about legal trends and developments, ensuring compliance and effective management of workplace issues.
Ballard Spahr and the Southeastern Pennsylvania Chapter of SHRM (SEPA SHRM) are hosting our 13th Annual HR Legal Summit, where over 200 HR professionals will gain practical insights into labor and employment compliance for 2025 and beyond. The event will feature speakers from Ballard Spahr discussing legal changes relevant to HR and decision-makers, with opportunities for Q&A sessions and interactions with exhibitors and sponsors, with a particular focus on the changing legal landscape under the new administration. Staying proactively informed is crucial for supporting organizations and employees in these evolving times.
Early Bird Registration Deadline now through August 15, 2025.
Thursday, September 18, 2025
8:00 AM – 4:30 PM ET
Presidential Caterers
2910 Dekalb Pike
East Norriton, PA 19401
For more information about the conference, sponsorship opportunities or exhibiting, please contact Laurie Sample at sepa-administrator@sepashrm.org or visit the 2025 HR Legal Summit Event Page.
CLE Credits: Approval for CLE Credits in CA, NJ, NY, and PA is pending. Uniform Certificates of Attendance will be provided for the purpose of applying for CLE credit in other jurisdictions.
Republicans Ask Federal Banking Agencies to Withdraw Rules, Guidance
Republicans on the House Financial Services Committee have sent letters to financial regulators asking them to rescind a variety of measures the regulators issued during the Biden administration.
“These letters highlight the rules and guidance issued under the previous administration that reduce competition and innovation and must be rescinded or significantly modified,” the GOP members said in a joint letter to the regulators. “These rules and guidance [each] lacked [a] proper cost-benefit analysis, would have significant negative economic consequences, and frequently ran afoul of statutorily-mandated procedures intended to ensure well-formulated rulemaking.”
Republicans sent a joint letter to the Federal Reserve Board, FDIC, and Office of the Comptroller of the Currency all regulators, as well as individual letters to each of these regulators and to the CFPB.
In the joint letter to Federal Reserve Chairman Jerome Powell, Acting FDIC Director Travis Hill and Acting Comptroller of the Currency Rodney Hood, the Financial Services Committee GOP members ask the regulators to rescind a joint final rule implementing changes to the Community Reinvestment Act.
That final rule was issued in October 2023. “The rule’s high compliance costs, especially around new data collection requirements, complexity, and incentive structure might lead banks to reduce their lending to low and moderate-income individuals and communities,” the Republican members wrote.
They said that the final rule is too complex and goes well beyond the banking agencies’ statutory authority. In addition, financial institutions were not given enough time to comply with the rule, the GOP members wrote. See our prior posts on this and on related developments here and here, and our podcast here.
The GOP members also asserted that the banking regulators must provide more guidance to financial institutions and third-party vendors regarding risk management. In June 2023, the federal banking regulators issued guidance on managing the risks associated with third-party vendors. See our prior posts here, here, and here.
“The emphasis on banks’ sound management of potential risks arising from their third-party relationships throughout the relationship life cycle, while logically valid, was not accompanied with clear and objective expressions by the Federal banking agencies as to what third-party risk management practices would be consistent with the agencies’ expectations,” the Republicans wrote. They called on the agencies to revise existing guidance or issue new guidance to provide greater clarity to financial institutions and their third-party vendors.
In a separate letter to the Fed, the Republican members asked the agency to withdraw its Notice of Proposed Rulemaking that would lower the maximum interchange fee that a large debit card issuer can receive for a debit card transaction and that would establish a process for updating the maximum amount every two years. See our prior posts here, here, here, and here, and our podcast here.
“Since the proposal would update the maximum interchange fee based on average costs for all financial institutions with over $10 billion in assets, it would likely place smaller debit card issuers at a significant competitive disadvantage since they do not have the efficiencies of scale that larger issuers possess,” the Republicans said. The proposal also likely would result in banks raising other fees to make up for lost revenue from debit interchange fees, the Republicans asserted.
“Lastly, the FRB failed to adequately consider fraud costs, which disincentivize banks from investing in fraud prevention given they can no longer cover these costs through debit interchange fees” the Republicans contended. “We believe this proposal should be withdrawn.”
In a letter to the FDIC, the Republicans said that in October 2023, the agency updated its supervisory guidance on Non-Sufficient Funds (NSF) fees that arise from the re-presentment of the same unpaid transaction. See our prior posts here, here, here, here, here, and here .
The guidance said that most customer agreements are “deceptive” in their language “regarding NSF fees and recommended the elimination of such fees or that institutions should decline to charge more than one fee for the same transaction,” the GOP members said.
The guidance likely violated the Administrative Procedure Act by issuing a legislative rule, including new obligations, without the proper notice-and-comment process, they added. “Specifically, the guidance defines unfair or deceptive acts and practices, of which the primary authority to do so was granted to the CFPB and the FTC,” according to the Republicans.
John L. Culhane, Jr. and Richard J. Andreano, Jr.
Financial Services Committee Republicans Call on the CFPB to Withdraw Rules, Guidance
Republicans on the House Financial Services Financial Institutions Subcommittee have sent Acting CFPB Director Russell Vought a letter calling for the CFPB to withdraw a wide variety of final and proposed rules.
In addition, the GOP members are calling for the CFPB to withdraw guidance documents, circulars, interpretive rules, and advisory opinions that did not go through the comment period required under the Administrative Procedure Act.
“These misguided efforts reduce clarity for consumers, limit access to credit and financial products and services, and hinder the innovation that drives the American economy,” Committee Chairman Representative French Hill, (R-Ark.), Financial Institutions Subcommittee Chairman Representative Randy Barr, (R-Ky.), and Republican members of the Financial Institutions Subcommittee, wrote.
The Biden administration failed to consider negative consequences “in its rush to pursue partisan politics,” the GOP members wrote.
“Competition and innovation, not government edicts, are the best way to ensure consumers have access to low-cost financial products and services,” they added.
And, they said, “to best foster this environment, we believe these rules, circulars, guidance, and advisory opinions should be rescinded, modified, or reproposed as appropriate,” including the rules:
- Prohibiting credit reporting agencies from including medical debt on credit reports and lenders from considering this information when making credit decisions, leading consumers to taking on new debt they cannot afford. See our prior posts on this and related subjects here, here, here, and here and our podcast here.
- Prescribing ability-to-pay rules for Property Assessed Clean Energy (PACE) financing and applying certain liability provisions of the Truth in Lending Act (TILA). “The final rule does not properly consider the States’ sovereignty and has the potential to unnecessarily impede Americans’ ability to access critical funding to protect against natural disasters such as hurricanes and floods,” the Republicans wrote. In addition, the CFPB failed to follow the congressional directive in S.2155, the Economic Growth, Regulatory Relief, and Consumer Protection Act, to consider the unique nature of PACE financing in issuing a rule to apply certain TILA provisions to these transactions, according to the Republicans. See our posts on this and related subjects here and here.
- Imposing new restrictions on overdraft programs at financial institutions with more than $10 billion in assets. By classifying overdraft services as “overdraft credit” under Regulation Z, the rule imposes burdensome disclosure requirements they said. “The bottom line is that when financial institutions are forced to provide overdraft services without the ability to generate profit or under the strict requirements of Regulation Z, they will stop offering these services to consumers who rely upon them,” the Republicans wrote. See our prior posts on this and related subjects here, here, and here and our podcast here. Republicans are in the process of attempting to repeal this rule through the Congressional Review Act. The Senate and House have adopted a resolution repealing the rule and the resolution now is in President Trump’s hands. He is expected to sign the resolution.
- Modifying the CFPB’s small dollar loan program. Much of that rule has been rescinded and the CFPB has said it no longer will prioritize enforcement of the rule’s payment provisions that went into effect at the end of March. “The CFPB should continue to work through issues in these underlying requirements to ensure compliance is not overly burdensome,” the Republicans wrote. See our prior posts on this and related subjects here, here, and here.
- Capping credit card late fees. The GOP members contend that the rule threatens to restrict access to credit for riskier consumers and would require all cardholders to subsidize the few cardholders who pay late. They added that the rule also encourages individuals to pay late on their credit cards by removing a fee level that is adequate to deter late payments. See our prior posts on this and related subjects here, here, here, and here and our podcast here.
- Requiring financial institutions to report their lending to women- and minority-owned businesses. “The overly burdensome rule would require lenders to report on 81 data points, including sensitive personal information such as small business owners’ race, ethnicity, and sex,” they wrote, adding that the compliance costs will increase the cost of credit. The House Financial Services Committee has approved legislation rescinding this rule. See our prior posts on this and related topics here, here, and here and our podcasts here and here.
The Republicans said that despite their calls by the committee to stop rulemaking after the election, the CFPB issued several proposed rules after Trump won the election, but before he took office. Those pending rules should be withdrawn the Republicans said. They include proposals to:
- Prohibit certain contractual terms in agreements for consumer financial products and services. The overly broad and confusing rulemaking will inject further uncertainty into consumer contracts and require a wholesale reworking of existing contracts at significant costs to financial institutions, without clear benefits to consumers, according to the Republicans. See our prior posts on this and related subjects here and here.
- Expand the definitions for the terms “identity theft” and “identity theft report” in Regulation V. Specifically, the CFPB proposed forcing consumer reporting agencies to block any debt that was acquired “without effective consent.” This would fundamentally alter the accuracy of credit reporting and force consumer reporting agencies to become arbiters of whether a debt was “coerced,” a task for which they are ill suited and would have to expend significant resources to undertake, the GOP members wrote. See our prior on post on this and related subjects here.
- Expand the scope of Regulation V, including what is considered a consumer report. See our prior post on this and related subjects here, here, and here and our podcast here.
John L. Culhane, Jr. and Richard J. Andreano, Jr.
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A Ballard Spahr Webinar | April 22, 2025, 2 PM ET
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May 14-17, 2025 | Hilton San Diego Bayfront Hotel, San Diego, CA
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DATA PRIVACY, SECURITY AND AI TRACK: Evolving Regulatory Environment on AI in the Mortgage Industry
May 16, 2025 – 1:00 PM PT
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May 17, 2025 – 11:15 AM PT
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May 18-20, 2025 | The Broadmoor Resort, Colorado Springs, CO
Compliance Update PART I
May 19, 2025 – 11:00 AM MT
Speaker: Richard J. Andreano, Jr
Compliance Update PART II
May 20, 2025 – 8:40 AM MT
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