New Consumer Financial Services Fintech Business Opportunities Arising from Deregulation at the CFPB during Trump 2.0 – Part 2

Today’s podcast episode is a continuation of a previous repurposed webinar held on August 12th, focusing on emerging opportunities in the consumer financial services sector under the Trump administration. The session aims to provide insights into the evolving regulatory landscape and its implications for businesses and consumers. The first part of the webinar, released last Thursday, September 4, covered  the recently-passed GENIUS Act (which creates a federal infrastructure for Stablecoin); developments in crypto-backed lending and credit builder loans; the mortgage industry; developments in earned wage access and rent-to-own and lease-to-own financing products; and insights on income share agreements. Joining the podcast today are the following members of Ballard Spahr’s Consumer Financial Services Group: Kristen Larson, of counsel, provides insights into the open banking rule; John Socknat, co-leader of the Group, speaks on home equity investment products; John Culhane, a partner in the group, relays insights on large installment loans at point of sale; and Dan Wilkinson, an associate, provides an overview of digital wallets. Consumer Finance Monitor is hosted by Alan Kaplinsky, Senior Counsel at Ballard Spahr, and the founder and former chair of the firm's Consumer Financial Services Group for 25 years.  We encourage listeners to subscribe to the podcast on their preferred platform for weekly insights into developments in the consumer finance industry.

In the latest episode of our podcast, we explore the significant shifts in the regulatory landscape under the second Trump administration and how these recent deregulatory actions have opened new pathways for banks and FinTech companies by reducing barriers to entry and compliance costs. This evolving environment presents opportunities for innovation and market expansion, although state law oversight, including licensing and regulatory requirements. Today’s episode is part one of a two-part series. Joining the podcast today are the following members of Ballard Spahr’s Consumer Financial Services Group: Kristen Larson, of counsel, provides insights into the recently-passed GENIUS Act (which creates a federal infrastructure for Stablecoin); Ron Vaske, a partner, covers developments in crypto-backed lending and credit builder loans; John Socknat, co-leader of the Group, speaks on crypto and the mortgage industry; Dan Wilkinson, an associate, provides an overview of developments in earned wage access and rent-to-own and lease-to-own financing products; and John Culhane, a partner in the group, relays insights on income share agreements. Part two of this webinar will be released next Thursday, September 11.  In that episode, Kristen Larson, John Socknat, John Culhane, and Dan Wilkinson, return to continue the conversation, discussing open banking; home equity investment products; home equity loans; buy now, pay later; large installment loans at point of sale; payday loans; and digital wallets to access credit-like features. Consumer Finance Monitor is hosted by Alan Kaplinsky, Senior Counsel at Ballard Spahr, and the founder and former chair of the firm's Consumer Financial Services Group for 25 years.  We encourage listeners to subscribe to the podcast on their preferred platform for weekly insights into developments in the consumer finance industry.

We recently wrote about the August 15th D.C. Circuit Court of Appeals decision in the lawsuit brought by the labor unions representing CFPB employees against Acting Director Russell Vought. The unions sought injunctive relief in response to what they described as an attempted “shutdown” of the Bureau. In a 2–1 ruling, the Court of Appeals vacated a preliminary injunction issued by the District Court. That injunction had temporarily blocked the CFPB from carrying out a reduction-in-force (“RIF”) that would have left the Bureau with only about 200 employees to carry out its statutory responsibilities. Today, our Consumer Finance Monitor podcast takes a deep dive into this critical decision and its implications. Alan Kaplinsky (founder and former practice group leader, now Senior Counsel in our Consumer Financial Services Group) joins Joseph Schuster (a partner in the Group) for a wide-ranging conversation covering: The majority opinion by Judge Katsos The dissenting opinion by Judge Pillard The plaintiffs’ options for further review — and why the odds may be at least 50–50 that the full D.C. Circuit (with 11 judges, 7 appointed by Democratic presidents) will grant en banc review Why plaintiffs might choose to continue litigating in the District Court as the CFPB implements the RIF and scales back activities to only those that are statutorily mandated How the CFPB’s sharply reduced budget (cut nearly in half by the “Big Beautiful Bill”) shapes the Bureau’s future functions What the CFPB could look like once litigation ends and “the dust settles” The impact of the just-released semiannual regulatory agenda The current status of the complaint portal What’s happening with the CFPB’s supervision and enforcement efforts How the DOJ and FTC are approaching consumer financial services issues Whether state attorneys general are stepping up enforcement to fill the gap left by a diminished CFPB This is a must-listen episode for anyone following the future of the CFPB, the role of other federal agencies, and the actions of state AGs in regulating consumer financial services.

Today’s episode of the Consumer Finance Monitor podcast is centered around a novel and thought-provoking article by David Horton, a professor of law at the University of California, Davis. The article, titled "Do Arbitrators Follow the Law? Evidence from Clause Construction," dives into the intriguing question of whether arbitrators render decisions that align with judicial rulings. Horton explores the longstanding debate on arbitration's adherence to legal standards, focusing on whether arbitrators have followed the Supreme Court’s 2019 decision in Lamps Plus, Inc. v. Varela (2019) that class-wide arbitration is not permitted when an arbitration clause is silent or ambiguous on the matter.  The podcast episode explores the ramifications of Horton's finding that in about 27% of the arbitrations studied, the arbitrators did not follow Lamps Plus.  Horton interprets that finding as suggesting that a significant minority of arbitrators may be motivated by financial considerations in allowing a class arbitration to proceed, notwithstanding Lamps Plus, because it is more lucrative for them than an individual arbitration.    Mark Levin, Senior Counsel at Ballard Spahr, also joins the program. Mark interprets Horton’s findings differently, emphasizing that in his view Horton’s data strongly supports the conclusion that arbitration is not lawless since an overwhelming majority of the arbitrators (73%) did follow Lamps Plus.  Mark also dismisses Horton’s suggestion that some arbitrators’ rulings may be swayed by financial considerations as pure speculation.  On the contrary, he observes, the fact that some arbitrators have not strictly followed Lamps Plus does not show they were not following the law since the issue of clause construction has a lengthy complex history and prominent courts such as the Second Circuit have themselves found reasons for distinguishing Lamps Plus.    Consumer Finance Monitor is hosted by Alan Kaplinsky, Senior Counsel at Ballard Spahr, and the founder and former chair of the firm's Consumer Financial Services Group. We encourage listeners to subscribe to the podcast on their preferred platform for weekly insights into developments in the consumer finance industry.

Today on our podcast, we’re releasing a repurposed recording of our July 23, 2025 webinar titled “Student Lending Legislation and Litigation: 2025 Mid-Year Review.” The webinar features esteemed partners John Culhane and Tom Burke, who dive into the intricacies of student lending litigation and regulatory developments. As a senior partner in the Consumer Financial Services Group, John Culhane shares his extensive knowledge on higher education finance, focusing on state legislation and private student loan litigation. Tom Burke, also a partner in the same group, brings his expertise in private class actions and state enforcement actions, providing insights into the One Big Beautiful Bill Act and its significant impact on federal loan servicers and discussing federal student loan litigation. Consumer Finance Monitor is hosted by Alan Kaplinsky, Senior Counsel at Ballard Spahr, and the founder and former chair of the firm's Consumer Financial Services Group. We encourage listeners to subscribe to the podcast on their preferred platform for weekly insights into developments in the consumer finance industry.

Today’s episode of the Consumer Finance Monitor podcast offers an in-depth analysis of the unitary executive theory and its implications for terminations by President Trump of the Democratic members/commissioners of several so-called independent Federal agencies.  The episode features Lev Menand, an associate professor of law at Columbia Law School, who provides expert insights into financial institutions and administrative law and the validity of the Trump terminations. Professor Menand discusses the theory that President Trump may exercise complete control over independent federal agencies (which includes such terminations), despite statutes which permit terminations only for cause and a 1935 Supreme Court opinion in Humphries Executor which upheld the constitutionality of the “for cause” limitation on such terminations.  Professor Menand also discusses (i) the stay orders issued by the Supreme Court which have frozen preliminary injunctions issued by lower courts in litigation initiated by the terminated individuals which required the reinstatement of Democratic members of two agencies who had been fired by Trump and (ii) the dictum in such stay orders saying that the reasoning behind the stay orders  does not apply to the members of the Federal Reserve Board. This episode builds on another podcast released by Consumer Finance Monitor on July 10 featuring Patrick Sobkowski of Marquette University. Consumer Finance Monitor is hosted by Alan Kaplinsky, Senior Counsel at Ballard Spahr, and the founder and former chair of the firm's Consumer Financial Services Group. We encourage listeners to subscribe to the podcast on their preferred platform for weekly insights into developments in the consumer finance industry.

Our podcast show being released today commemorates the one-year anniversary of the U.S. Supreme Court’s opinion in Loper Bright Enterprises - the opinion in which the Court overturned the Chevron Deference Doctrine. The Chevron Deference Doctrine stems from the Supreme Court's 1984 decision in Chevron v. Natural Resources Defense Council. The decision basically held that if federal legislation is ambiguous the courts must defer to the regulatory agency's interpretation if the regulation is reasonable. My primary goal was to identify a person who would be universally considered one of the country’s leading experts on administrative law and, specifically the Chevron Deference Doctrine and how the courts have applied the Roper opinion. I was very fortunate to recruit Cary Coglianese, Edward B. Shils Professor of Law at Penn Law School and Director of the Penn Program on Regulation. In this episode we explore two of his recent and widely discussed papers, titled “Loper Bright’s Disingenuity” and “The Great Unsettling: Administrative Governance After Loper Bright” Here are the questions that we discussed with Professor Coglianese: Let’s start at the beginning. What is the Chevron case all about? How did the Court in Loper Bright explain why it was overruling Chevron? You have a new article coming out later this year in the University of Pennsylvania Law Review called “Loper Bright’s Disingenuity,” co-authored with David Froomkin of the University of Houston. What do you and Professor Froomkin mean by the title of your article?  In your article, you critique what you call the Court’s “facile formalism.” What do you mean by that? You also criticize the way the Court based its decision in Loper Bright on the Administrative Procedure Act or APA. What exactly was problematic about the Court’s APA analysis?  Let’s shift gears from your analysis of the logic of the Loper Bright opinion to talk about what the decision’s effects have been so far and what its effects ultimately might be on the future of administrative government in the United States. You have another article on Loper Bright that was recently published in the Administrative Law Review and coauthored with Dan Walters of Texas A&M Law School. It has another provocative title: “The Great Unsettling: Administrative Governance After Loper Bright.”  What do you mean by the “Great Unsettling”?  Although you say that it is hard to predict exactly what impact Loper Bright will have on the future of administrative government, you also acknowledge that the decision has created a “symbolic shock” and is likely to “punctuate the equilibrium of the administrative governance game as we have come to know it.”  Can we see any effects so far in terms of how Loper Bright is affecting court decisions?  For example, let’s start with the Supreme Court itself. Has it had anything more to say about Loper Bright in decisions it’s handed down this past year? If we look at the lower courts, what can we discern about how Loper Bright has been received in federal district courts or courts of appeals?  Are there any trends that can be observed? I’d like to bring things full circle by raising a metaphor you and Professor Walters use in your article, “The Great Unsettling.” You say there that the Loper Bright “decision might best be thought of as something of a Rorschach test inside a crystal ball.” What do you mean? Can you tell us what you see inside your crystal ball? Alan Kaplinsky, the founder and former chair and now Senior Counsel of the Consumer Financial Services Group hosted the podcast show.  

We are releasing today a very interesting podcast show which is also breaking news. Before I read an article by Professor Charlotte Haendler of Southern Methodist University and Professor Rawley Z. Heimer of Arizona State University titled “The Hidden Costs of Financial Services: Consumer Complaints and Financial Restitution,” I never knew that the CFPB authorized outside third-parties access to non-public data collected about consumer complaints that it received so that those third-parties could conduct studies. Professors Haendler and Heimer used that data to determine the demographics of complainants who received the most restitution versus the demographics of those who received no or little restitution. The study they conducted is described in the abstract of the article which is available here on SSRN: Financial disputes are a widespread but understudied feature of consumer financial markets. Using confidential data from the Consumer Financial Protection Bureau (CFPB), we analyze nearly two million consumer complaints filed since 2014, which have led to an average payout of $1,470 per successful complaint. The volume of complaints and total restitution have increased substantially over time, suggesting significant scope for additional compensation. When understanding who secures restitution—and why—we find little evidence that differences across firms systematically drive restitution outcomes. Instead, product complexity and consumer engagement play key roles—consumers with higher income and education (high-SES) are more likely to explicitly request refunds, claim fraud, and submit supporting documentation, making firms more responsive. Leveraging previously unexamined CFPB monitoring reviews, where the agency systematically screens company responses and issues confidential reports highlighting deficiencies, we show that regulatory scrutiny increases restitution but disproportionately benefits high-SES consumers, reinforcing individual-specific mechanisms. Our results highlight the complementary nature of regulatory interventions and suggest that financial sophistication and self-advocacy are critical determinants of consumer redress. During the webinar, the Professors answered the following questions: 1.  Why did you conduct an in-depth CFPB consumer complaints study in the first place? 2.  Why did you basically use the CFPB complaint data as a proxy for consumer disputes in the entire industry? 3.  In your paper you mostly focus on the likelihood of a complaint resulting in financial restitution (i.e., some sort of monetary relief for the troubles endured). The title of your paper is “The hidden costs of financial services: consumer complaints and financial restitution”. First of all, what do you mean by hidden costs? 4.  Was the confidential data you received from the CFPB essential in better understanding the mechanisms behind the resolution of these consumer disputes? 5.  Did you find differences in complaint outcomes depending on the type of product involved? 6.  Is there a lot of variation across companies in the likelihood to award financial restitution to a complainant? 7.   Is the likelihood of a complainant receiving restitution more about the complexity of the product and potentially how the consumer relates to it than about there being some rogue companies? 8. Do certain consumer characteristics—like income, education, and even racial and ethnic background—correlate with greater likelihood of financial restitution. 9.   How do consumer characteristics end up influencing the likelihood of restitution? 10.  Does oversight from the CFPB change how firms handle disputes and award financial restitution? 11.  What should regulators, firms, and consumers take away from this research? This is how they answered that question: (a)  It is critical to recognize that the capabilities to navigate the dispute process aren’t equal across consumers. (b)  For regulators, we see that scrutiny and nudging alone do not substitute for consumer engagement. Hence the challenge is to design systems that help level the playing field, perhaps by educating the consumer more, or by flagging poorly-articulated but potentially valid complaints for extra review and documentation. (c)  For companies, this study highlights the negotiating power of the consumer in disputes, and how this negotiating power hinges on self-advocacy and financial sophistication. It could also be a wakeup call to consider how certain demographics might be struggling to understand the financial product offered and how to cater to them to reach a greater customer base and higher levels of consumer satisfaction. (d)  For consumers, it's a reminder that being specific, using strong language, and submitting documentation really matters in getting your voice heard. Alan Kaplinsky, founder and former Chair and now Senior Counsel of the Consumer Financial Services Group hosted this podcast show.

The podcast show we are releasing today features Professor Jonathan Gould of University of California (Berkeley) Law School who discusses his recent article co-written with Professor Rory Van Loo of Boston University School of Law which was recently published in the University of Chicago Law Review titled “Legislating for the Future”. The introduction of the article describes “legislating for the future” as follows: Public policy must address threats that will manifest in the future. Legislation enacted today affects the severity of tomorrow’s harms arising from biotechnology, climate change, and artificial intelligence. This Essay focuses on Congress’s capacity to confront future threats. It uses a detailed case study of financial crises to show the limits and possibilities of legislation to prevent future catastrophes. By paying insufficient attention to Congress, the existing literature does not recognize the full nature and extent of the institutional challenges in regulating systemic risk. Fully recognizing those challenges reveals important design insights for future-risk legislation. During the podcast, we discuss the dynamics around enacting legislation through Congress that aims to increase the stability of the financial system and prevent financial crises. We discuss with Professor Gould about why passing this sort of legislation is so difficult and what Congress might be able to do about that. We consider the following questions: 1.  What are the basic dynamics that make it so hard to pass financial stability legislation? 2.    How does the structure of Congress affect the difficulty of passing financial stability legislation? 3.   We have seen some big bills lately, like Biden’s Inflation Reduction Act and the big taxing and spending bill from Trump this year.  Why is financial regulation harder to enact than these other types of legislation? 4.   Has it gotten easier or harder over time to enact financial regulation? 5.  What happens after financial stability legislation is enacted? 6.   What can Congress do to enhance its capacity in this area? 7.   What types of legislative drafting techniques are likely to be especially promising? 8.   What role is there for federal agencies to play in augmenting congressional capacity? 9.  What role is there for states or private plaintiffs to play in augmenting congressional capacity? 10. What relevance does this all have beyond financial regulation? 11. In light of the fact that the article was published before the 2024 election and change in administration are any of Professor Gould’s conclusions altered by more recent events? This podcast was hosted by Alan Kaplinsky, the founder and former chair for 25 years and now Senior Counsel of the Consumer Financial Services Group.

The podcast show we are releasing this week focuses generally on the so-called “Unitary Executive Theory” and specifically on the legality of President Trump firing without cause the Democratic Commissioners of the Federal Trade Commission and the members of other independent agencies, despite language in the governing statutes that prohibit the President from firing a member without cause and a 1935 Supreme Court opinion in Humphrey’s Executor holding that the firing of an FTC Commissioner by the President is unlawful if done without cause. Our guest is Patrick Sobkowski who teaches constitutional law, courts and public policy, and American politics at Marquette University. His scholarship focuses on constitutional and administrative law, specifically the administrative state and its relationship to the other branches of government. Our show began with an explanation of the “Unitary Executive Theory” which is defined as a constitutional law theory according to which the President has sole authority over the executive branch including independent federal agencies. It is based on the so-called “vesting clause “of the Constitution which vests all executive power in the President. The theory often comes up in disagreements about the president's ability to remove employees within the executive branch (including Federal agencies); transparency and access to information; discretion over the implementation of new laws; and the ability to control agencies' rule-making. There is disagreement about the doctrine's strength and scope. More expansive versions are controversial for both constitutional and practical reasons. Since the Reagan Administration, the Supreme Court has embraced a stronger unitary executive, which has been championed primarily by its conservative justices. We then discussed a litany of Supreme Court opinions dealing with the question of whether the President has the unfettered right to remove executive agency employees: a. Myers v. US (1926) b. Humphrey’s Executor (1935) c. Morrison v. Olson (1988) d. Seila Law (2020) We then discussed Trump’s removals of the Democratic members of the National Labor Relations Board and Merit Systems Protection Board and the Supreme Court’s opinion and order staying the lower court’s order that the removals were unlawful. In addition to casting doubt on the continued viability of Humphrey’s Executor, the Court included dicta to the effect that the logic of its opinion about the NLRB and the MSPB would not apply to the Federal Reserve Board because the Fed is not really an executive agency and that its functions are more akin to the functions performed by the First Bank and Second Bank of the United States. Alan Kaplinsky, the founder and former practice group leader for 25 years and now Senior Counsel of the Consumer Financial Services Group hosted the podcast. The podcast recording is here.