Banking and BNPL Shifts in Limbo as Trump’s Executive Order Pauses Pending Regulations 

Amid the blizzard of executive orders that marked the first day of the Trump administration, there was widespread speculation that the new president would take some significant steps to drastically reshape agencies such as the Consumer Financial Protection Bureau (CFPB) and the Federal Deposit Insurance Corp. (FDIC).

Thus far, at of Tuesday morning (Jan. 21), the standout order from President Donald Trump has been to pause all pending regulations. By extension, that order paves the path to the aforementioned reshaping of agencies that have been tasked with oversight of banking, FinTechs, financial services and products in general.

Sweeping in nature, the order can be found here, and applies to “all executive departments and agencies” while directing them to “not propose or issue any rule in any manner, including by sending a rule to the Office of the Federal Register (the “OFR”), until a department or agency head appointed or designated by the President after noon on January 20, 2025, reviews and approves the rule.” The read-across here is that new rule-making is on hold until the current administration heads (such as Rohit Chopra, director of the CFPB) are replaced.

Opening Up New Commentary Periods, Too

Trump’s order also states that agencies must “immediately withdraw any rules that have been sent to the OFR but not published in the Federal Register, so that they can be reviewed and approved,” which effectively shuts down any rule-making that’s been moving through the typical processes but have not yet made it into public discourse.

Perhaps most tellingly, the executive order also states that agencies must “consider postponing for 60 days from the date of this memorandum the effective date for any rules that have been published in the Federal Register, or any rules that have been issued in any manner but have not taken effect, for the purpose of reviewing any questions of fact, law, and policy that the rules may raise.” That postponement also opens the door to new commentary periods from stakeholders.

“Should actions be identified that were undertaken before noon on January 20, 2025, that frustrate the purpose underlying this memorandum, I may modify or extend this memorandum, to require that department and agency heads consider taking steps to address those actions,” Trump added in the order.

Flurries of Rule-Making

To be sure, there’s been a spate of rule-making, perhaps most visibly in evidence from the CFPB. As PYMNTS has reported, last month the bureau proposed a new rule that would curtail data brokers’ access to consumers’ data and the ability to sell that information. The rule would classify data brokers — which collect and sell consumer-level data, including details about credit scores, social security numbers and debt repayment histories — as consumer reporting agencies.

Separately, this month, the CFPB signaled that there may be new rules in the making for BNPL lenders, in response to a petition from consumer groups to increase oversight on loans extended by non-banking companies (which would also impact earned wage access lending). A November final rule (which took effect at the end of last year) essentially treats Big Techs moving more firmly into the payments sphere as banks.

As for the banks themselves, and with a nod to the FDIC, commentary periods for a proposed rule on record keeping tied to bank/FinTech partnerships had been extended to last week from early December. The proposed rule would enhance and expand recordkeeping for bank deposits received from third-party, non-bank companies that accept those same deposits on behalf of consumers and businesses.

At a high level, the proposal requires FDIC-insured banks holding certain custodial accounts to ensure accurate records are kept determining the individual owner of the funds and to reconcile the account for each individual owner on a daily basis.

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