The CFPB Needs Reform, But Not More Regulatory Whiplash

The future of the Consumer Financial Protection Bureau (CFPB or Bureau) has rarely been more uncertain. Since its creation, the CFPB has been at the center of intense political and policy debate, with its priorities changing dramatically as administrations change. The events of the past year or so under the leadership of Acting Directors chosen by President Trump, however, have taken that policy whiplash to a new level. In our latest Consumer Finance Monitor podcast released today, Alan Kaplinsky (the founder and former leader for 25 years of the Consumer Financial Services Group at our firm) was joined by two former CFPB officials with decades of experience inside the Bureau: Jason Brown, a visiting fellow at the Brookings Institution and former CFPB Assistant Director for Research, and David Silberman, former Acting Deputy Director and longtime Associate Director for Research, Markets and Regulation. We discussed their recent Brookings commentary, "The CFPB: Where to Go From Here," which proposes a series of structural reforms designed to make the Bureau a more stable and effective financial regulator. Their recommendations are noteworthy not because they seek to preserve every aspect of the CFPB as it has operated in the past. Rather, they focus on a more fundamental question: How can the CFPB carry out its statutory mission while allowing presidential administrations to pursue different policy agendas without repeatedly dismantling and rebuilding the agency? 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.

National bank preemption is headed toward another Supreme Court showdown. The Second Circuit has held that New York's mortgage escrow-interest requirement is preempted, directly conflicting with the First Circuit's decision upholding a comparable Rhode Island requirement and the Ninth Circuit's decision allowing a similar California law to remain in effect. The OCC has sided with the Second Circuit, issuing final preemption regulations concluding that state laws requiring national banks to pay interest on mortgage escrow accounts are preempted. In the latest episode of the Consumer Finance Monitor podcast released today, Alan Kaplinsky (founder and former chair for 25 years, and now Senior Counsel of our Consumer Financial Services Group) is joined by Professor Emeritus Arthur Wilmarth of George Washington University Law School to discuss the Second Circuit's post-remand decision in Cantero v. Bank of America, the Supreme Court's 2024 decision in the case, the conflicting decisions in Conti v. Citizens Bank in the First Circuit and Kivett v. Flagstar Bank in the Ninth Circuit and the OCC's The immediate dispute is whether national banks must pay interest on residential mortgage escrow accounts under state law. The broader question is whether state consumer financial laws (other than state usury laws) may regulate national banks and, if so, when those laws are preempted by the National Bank Act. With certiorari petitions pending in Cantero and Kivett, further proceedings in Conti potentially bringing that case back before the Supreme Court, and the OCC's regulations now under challenge by ten state attorneys general, the circuit split and the OCC's intervention make another Supreme Court review increasingly likely. Our podcast with Professor Wilmarth explores these issues in depth and provides an important perspective on what could become one of the most significant national bank preemption disputes in years. 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.

Disclosure has long been one of the principal tools of consumer protection. The basic premise seems straightforward: if consumers are given better information about the terms of a transaction, they should be able to make better-informed decisions. But what if better disclosure works differently for different consumers? And what if a disclosure that improves decision-making overall can, in some circumstances, actually worsen outcomes for financially vulnerable consumers? Those are among the important and provocative questions explored in the latest episode released today of the Consumer Finance Monitor Podcast, hosted by Alan Kaplinsky (founder and former chair for 25 years and now Senior Counsel of the Consumer Financial Services Group at our firm) Alan's guest is Professor Florencia Marotta-Wurgler of NYU School of Law, a leading scholar of consumer law, behavioral law and economics. We discuss her new article, "The Distributional Costs of Effective Consumer Regulation," co-authored with Tamar Kricheli-Katz.  The article is available for free on SSRN. The article challenges the conventional way regulators and academics have evaluated consumer disclosures. Rather than simply asking whether disclosure "works," the authors ask a more nuanced question: for whom does it work, under what circumstances, and at what cost? Key Topics Discussed Include: ·                 Better disclosure can reduce mistakes, but not necessarily for everyone in the same way ·                 When salience changes the trade-off ·                 The implications for regulators ·                 What does this mean for behavioral regulation? ·                 A broader lesson about disclosure Professor Marotta-Wurgler's research is particularly compelling because it challenges the assumption that making information more effective is necessarily an unqualified good. Sometimes, a disclosure may not merely inform consumers. It may change what they focus on, how they perceive trade-offs and ultimately what choices they make. That is a lesson regulators, policymakers and industry participants should keep in mind as they design the next generation of consumer protection disclosure rules. 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.

In the latest episode of the Consumer Finance Monitor podcast that we are releasing today, we explore a topic that is becoming increasingly important for financial services companies and virtually every other business operating in today's digital economy: how privacy, cybersecurity, and AI governance can be transformed from compliance obligations into sources of customer confidence, resilience, and competitive advantage. Alan Kaplinsky (founder, founder lease for 25 years and now Senior counsel of our Consumer Financial Services Group) hosts and interviews our guests. Our guests are Amy Reeder Worley, managing director at BRG and author of a new book entitled The Confidence Advantage: Optimizing Privacy, Cybersecurity, and AI Governance for Growth, and Greg Szewczyk, chair of Ballard Spahr's Privacy and Data Security Group. Amy advises senior executives and boards on cybersecurity, privacy, and AI risk, while Greg regularly counsels clients on privacy, cybersecurity, data governance, incident response, and the rapidly evolving legal issues surrounding AI. Amy's book is available on Amazon. Key Topics Include: ·                 From "trust" to evidence-based confidence; A central concept in Amy's book is the distinction between trust and confidence. She describes trust as a feeling, while confidence is an evidence-backed belief. ·                 Breaking down privacy, cybersecurity and AI silos; discussion about the need to move away from treating privacy, cybersecurity, and AI governance as separate disciplines operating in organizational silos. ·                 "Confidence by design"; Amy describes a framework she calls "confidence by design." ·                 The danger of the "FOMO" approach to AI; what Amy describes as the "FOMO" approach to AI: moving as quickly as possible to deploy AI tools and planning to establish governance later. ·                 Where should companies begin?; For organizations that are just beginning to address these issues, Amy's advice is surprisingly basic: start by determining what data the company has and where it is located. ·                 Boards need to know who owns the risk; discussion on the growing role of boards and senior management. ·                 Governance as a competitive advantage; Perhaps the most important message from the podcast is that good governance should not necessarily be viewed as a cost center. ·                 A rapidly changing legal landscape; the extraordinary uncertainty surrounding AI regulation. We encourage our readers and listeners who are interested in these issues to listen to the full episode and to consider reading Amy's book, The Confidence Advantage: Optimizing Privacy, Cybersecurity, and AI Governance for Growth. It provides a useful framework for thinking about an issue that is quickly moving from the privacy and technology departments into the boardroom. 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.

The CFPB's June 5, 2026 statement on "Ability to Repay and Immigration Status" presents creditors with a difficult, and potentially unprecedented, compliance dilemma. The Bureau says that when creditors are required to assess a consumer's ability to repay, they may, and in some circumstances may be required to, consider information about the consumer's immigration status if that information bears on the consumer's current or reasonably expected future income. But how can creditors take immigration status into account without violating federal or state fair-lending laws that prohibit discrimination based on national origin? That was the central question explored in the latest episode of the Consumer Finance Monitor Podcast, released today. Our host, Alan Kaplinsky (founder, leader for 25 years and now Senior Counsel of our Consumer Financial Services Group) was joined by three Ballard Spahr lawyers with complementary expertise: Dustin O'Quinn, a nationally recognized immigration lawyer; Richard Andreano, leader of the firm's Mortgage Banking Group and a leading authority on mortgage lending regulation; and John Culhane, a longtime member of Ballard Spahr's Consumer Financial Services Group. The discussion demonstrates just how difficult the CFPB's guidance may be for creditors to operationalize. Key Topics Discussed Include: ·                 What exactly did the CFPB say? ·                 Credit cards and mortgages are different; John Culhane explained that the credit card ability-to-repay requirement is fundamentally a point-in-time assessment. ·                 Immigration status is anything but binary; nOne of the most important points made during the podcast was that creditors cannot sensibly divide applicants into two categories—those who are "legal" and those who are "illegal." ·                 The ITIN issue; The CFPB guidance also raises questions about lending to consumers who have an Individual Taxpayer Identification Number (ITIN) rather than a Social Security number. ·                 The fair-lending problem; Rich Andreano described the problem succinctly: The guidance raises the risk associated with failing to consider immigration status but does not provide clear guideposts for considering immigration status without running afoul of ECOA and other civil-rights laws. ·                 Simply lending only to citizens and permanent residents is not the answer; One possible reaction might be for a creditor to adopt a bright-line policy: lend only to U.S. citizens and lawful permanent residents. ·                 The banking agencies have entered the picture; Among the subjects addressed are credit risk and underwriting, source of repayment, collateral considerations, documentation and verification, portfolio and concentration risk, and consumer compliance. ·                 What should creditors do? The podcast participants agreed that simply ignoring the CFPB guidance is unlikely to be a satisfactory answer, particularly for banks subject to regular examination. The CFPB's immigration-status guidance sits at the intersection of ability-to-repay requirements, immigration law, fair lending, safety and soundness, and state law. It is therefore an unusually complicated issue that cannot be analyzed solely from a consumer-finance or immigration-law perspective. Our latest Consumer Finance Monitor Podcast brings those disciplines together. Dustin O'Quinn, Richard Andreano, and John Culhane provide a detailed discussion of what the guidance means, the practical problems it creates for creditors, and how lenders should begin thinking about their policies and procedures. 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.

In today's episode of the award-winning Consumer Finance Monitor Podcast, our host, Alan Kaplinsky (founder, chair for 25 years and now Senior Counsel of the Consumer Financial Services Group at Ballard Spahr LLP) is joined by Delicia Hand, a nationally recognized expert on digital civil rights, AI governance, and consumer protection who leads AI policy initiatives at Consumer Reports. The discussion centers on Consumer Reports' recently released report, AI and Consumer Finance: A Landscape Analysis of Market Forces, Evaluation Frameworks, and Regulatory Gaps, and examines how AI is reshaping consumer finance while exposing important gaps in existing regulatory frameworks. Key topics discussed are: ·        Why approximately 75% of consumers express concern that AI could result in bias or unfair treatment in financial services, while only 8% believe current laws adequately protect them. ·        Whether the rapid adoption of AI is being driven more by competitive pressures than by demonstrated consumer benefits. ·        Consumer Reports' proposed framework for evaluating AI systems used in financial services, including twelve key dimensions designed to assess whether AI systems adequately protect consumers. ·        The growing use of AI in credit underwriting and lending, including both its potential to expand access to credit and its potential to perpetuate existing biases. ·        The increasing use of algorithmic and personalized pricing and the consumer protection concerns raised by AI-driven pricing models. ·        The risks associated with consumers relying on general-purpose AI systems as financial advisors despite the absence of traditional fiduciary obligations or regulatory oversight. ·        Privacy concerns arising from AI systems that access consumers' financial account information through data aggregation services. ·        The need for meaningful consumer redress mechanisms when AI systems make mistakes, including access to human review and effective dispute resolution. ·        The absence of a comprehensive federal framework governing AI in financial services and the unresolved questions surrounding accountability among AI developers, financial institutions, and other participants in the AI supply chain. This episode will be of particular interest to banks, fintech companies, financial services providers, compliance professionals, regulators, and attorneys seeking to understand the rapidly evolving legal and policy landscape governing the use of artificial intelligence in consumer finance. 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.

A newly launched academic institute is seeking to influence the future direction of consumer financial services regulation by promoting a policy framework centered on consumer choice, market competition, empirical research, and innovation. In the podcast we are releasing today on Consumer Finance Monitor, our host Alan Kaplinsky (founder, former chair for 25 years and now senior counsel) interviewed Professors Todd Zywicki of George Mason University Antonin Scalia Law School and Tom Miller of Mississippi State University about their newly created Institute for Consumer Financial Choice (ICFC), its mission, and its ambitious agenda. Key Topics Discussed: ·                 A Different Vision of Consumer Protection: Rather than viewing regulation and deregulation as opposite ends of a policy spectrum, the Institute seeks to identify regulatory approaches that encourage innovation, expand consumer choice, and improve market performance while still protecting consumers from genuine abuses. ·                 Beyond Research: Influencing Policy: The ICFC plans to produce peer-reviewed empirical research, file amicus briefs in important litigation, submit regulatory comment letters, educate students, policymakers, and industry participants, and serve as a resource for legislators and regulators confronting emerging consumer finance issues. ·                 Revisiting the CFPB Task Force Report: One of the Institute's earliest priorities is breathing new life into the CFPB Task Force Report issued in 2021. ·                 Research Priorities: The Institute has already identified an ambitious research agenda that includes evaluating whether the Military Lending Act has improved access to credit for servicemembers, conducting new empirical research on the pawn industry, studying ancillary financial products such as GAP insurance and extended warranties, examining payday lending regulation, investigating rural financial inclusion, exploring stablecoins, cryptocurrency, and digital payments, and assessing how existing regulatory structures can better accommodate technological innovation. ·                 Artificial Intelligence Moves to the Forefront: Professor Zywicki argued that AI presents both enormous opportunities and significant risks for consumer financial services. ·                 Policy Issues Likely to Receive Immediate Attention: Professors Zywicki and Miller identified several policy areas where they believe the Institute can have an immediate impact, including interest rate caps and usury laws, APR disclosures and widespread misunderstanding of APR as a measure of price, payment systems and interchange regulation, federal preemption and the future of dual banking, financial inclusion, stablecoin regulation; and emerging litigation involving consumer financial regulation. The Institute's long-term success will ultimately be measured not by the number of conferences it hosts or papers it publishes, but by whether its research meaningfully influences legislation, regulation, litigation, and public understanding of consumer financial services. Based on the conversation with Professors Zywicki and Miller, they have set ambitious goals and they appear determined to pursue them. 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.

In today's episode of the Consumer Finance Monitor Podcast, we are pleased to present an audio version of the webinar we conducted on May 27, 2026 examining the CFPB's revised final rule and its practical implications for banks, credit unions, FinTech companies, and other providers of small business credit. During this comprehensive discussion, our host, Alan Kaplinsky (founder, former Practice Group Leader for 25 years and now Senior Counsel of the Consumer Financial Services Group) was joined by his Ballard Spahr colleagues Richard Andreano and John Culhane, along with two distinguished guest panelists: Bradley Blower, Principal and Founder of Inclusive-Partners, LLC, and Louis Caditz-Peck, Executive Director of the Responsible Business Lending Coalition. Key Topics Discussed: ·        The most significant differences between the CFPB's original 2023 Section 1071 rule and the revised 2026 final rule. ·        Why the Bureau substantially increased the institutional coverage threshold from 100 to 1,000 covered originations. ·        The practical implications of narrowing the definition of a "small business," reducing the required data points, and excluding merchant cash advances and agricultural loans from coverage. ·        Whether the revised rule still fulfills Congress's objectives of promoting fair lending and improving transparency in the small business lending market. ·        The operational and technology challenges lenders should begin addressing now—even though compliance is not required until January 1, 2028. ·        How institutions can use Section 1071 data not only for compliance but also as a competitive business intelligence tool. ·        The potential fair lending, supervisory, and reputational risks created by the public availability of Section 1071 data. ·        The current status of litigation challenging the original Section 1071 rule and whether additional lawsuits challenging the revised rule are likely. ·        Predictions regarding how the rule may evolve over time, including whether future administrations could expand its scope in a manner similar to the evolution of HMDA reporting. Whether your institution expects to be covered by the revised rule or not, this discussion provides valuable insight into the future direction of small business lending regulation and offers practical guidance on how lenders should prepare now for the compliance, operational, and strategic issues that lie ahead. 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.

Artificial intelligence is rapidly evolving from a tool that assists human decision-making into technology capable of acting independently. The next frontier, often referred to as agentic AI or agentic commerce, envisions AI agents negotiating contracts, making purchases, authorizing payments, and completing commercial transactions with little or no human intervention. While enormous investments are being made to develop this technology, far less attention has been devoted to an equally important question: What legal infrastructure will govern autonomous commercial transactions? That is the focus of our latest episode of the Consumer Finance Monitor podcast being released today.   Our guests are Bridget McCormack, President and CEO of the American Arbitration Association–International Centre for Dispute Resolution (AAA) and former Chief Justice of the Michigan Supreme Court, and David Hoffman, the William A. Schnader Professor of Law at the University of Pennsylvania Carey Law School. They are the authors of the thought-provoking paper, Agentic Commerce Needs Legal Infrastructure—and the Courts Are Coming, which is published here on AAA's website. Key Topics Discussed: What distinguishes "agentic commerce" from today's AI-assisted transactions. Why traditional contract formation concepts, including clickwrap agreements, disclosures, and consent, may become increasingly difficult to apply. How existing agency law principles, including ratification, could bind companies to contracts negotiated by their AI agents. Why autonomous transactions may generate entirely new forms of litigation, including class actions arising from errors replicated across thousands, or even millions, of AI-driven transactions. The challenges of proving what an AI agent actually agreed to and the need for reliable records of contract formation. The growing importance of arbitration and other dispute resolution mechanisms as commerce increasingly moves to automated and, in some cases, irreversible payment systems such as stablecoins. Practical steps companies should consider now before deploying autonomous commercial agents. 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.

The latest episode of the Consumer Finance Monitor podcast examines a significant and coordinated regulatory initiative that could reshape anti-money laundering and countering the financing of terrorism (AML/CFT) compliance across the financial services industry. In this episode, host Alan Kaplinsky and guest Celia Cohen, a partner in Ballard Spahr's White Collar Defense and Investigations Group, analyze the joint notice of proposed rulemaking issued by the federal banking agencies Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency, and National Credit Union Administration—alongside a parallel proposal from Financial Crimes Enforcement Network (FinCEN). Together, these proposals represent one of the most important efforts in years to modernize AML/CFT compliance frameworks, moving the system toward a more risk-based, effectiveness-driven model. Key Topics Discussed Include: A Shift Away from "Check-the-Box" Compliance "Establish and Maintain" — and Prove It Works SAR Filings and the Challenge of Judgment Calls Impact Across Financial Institutions Regulatory Signals: A Coherent Direction What Institutions Should Be Doing Now The Consumer Finance Monitor podcast will continue tracking developments as the rulemaking process advances and will revisit the topic when final rules are issued. 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.