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Facing bankers in April, industry moves include the continued deregulation of the Federal Deposit Insurance Corp., supervisory uncertainty at the Consumer Financial Protection Bureau, President Donald Trump’s move to scale back the Community Development Financial Institution Fund and more.
Trump scales back Treasury’s CDFI Fund
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President Donald Trump issued an
Trump directed federal agencies to eliminate a number of economic development, cultural and social service programs — including the CDFI Fund — to the extent allowed by law, deeming them “unnecessary.”
“The non-statutory components and functions of the following governmental entities shall be eliminated to the maximum extent consistent with applicable law,” the order states. “Such entities shall reduce the performance of their statutory functions and associated personnel to the minimum presence and function required by law.”
Al Drago/Bloomberg
Banks are pushing back against stablecoin legislation
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Bankers are beginning to raise concerns about the Republicans’ push to finalize stablecoin legislation this Congress, a marked shift from the industry’s approach to
The Senate Banking Committee marked up the most robust and serious stablecoin bill that’s come out of Congress yet — the GENIUS Act, primarily sponsored by Sens. Bill Hagerty, R-Tenn., and Senate Banking Committee Chairman Tim Scott, R-S.C.
With the
Banks welcome FDIC deregulatory shift, but volatility looms
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Since Donald Trump’s second inauguration, the Federal Deposit Insurance Corp. has wasted little time reversing course on a number of fronts. While banks have largely embraced the changes, many experts say they signal a more volatile regulatory landscape in the long term.
“The measures underscore how quickly and dramatically rules can change with a new administration, and how oversight has become increasingly polarized and partisan,” Ian Katz, managing director at Capital Alpha Partners, said. “Though the financial services industry generally favors most of the moves Trump appointees are making, the regulatory whiplash that can occur after presidential elections complicates long-term business planning.”
On March 3, FDIC regulators
Neobank Chime debuts $500 instant loans for direct depositors
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Neobank Chime will now offer what it calls “Instant Loans” — three-month installment loans of up to $500 at a fixed interest rate and without a credit check for members.
The fintech, which champions early paycheck access, will use its proprietary method to discern eligibility, relying on several factors aside from credit history to decide whether or not to lend. According to Chime, on-time loan repayments will help customers build a credit history.
Only Chime members who directly deposit their paychecks into their
CFPB says supervision is happening, but examiners disagree
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The top lawyer at the Consumer Financial Protection Bureau sent an email to the agency’s supervisory staff telling examiners that if they are not working, they are disobeying orders.
On March 4, the CFPB’s chief legal officer sent an email to the supervisory staff claiming that he had instructed all legally required supervisory work to resume on March 2.
The email came one day before a federal judge ordered the CFPB’s leadership to prove that supervisory work, required by law, is actually being performed.
“I directed ALL CFPB staff to perform all work required by law and that they did not need to seek prior approval to do so,” Mark Paoletta, the CFPB’s chief legal officer, wrote in the email. “Nothing I have said or written since then contradicts that.”
‘Hitting bone’: CDFI industry fears deep cuts under Trump
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LeeAnn Rasachak grew up in a family of immigrants, originally farmers from Laos. There was always a side hustle in her family, she said, or a small business that someone was passionate about, and it usually involved food.
Rasachak was thrilled, then, when her career brought her from traditional finance to lead WomenVenture, a Minnesota-based Community Development Financial Institution that specializes in promoting women-owned businesses — the only CDFI like it in the state. The businesses that WomenVenture support range from food trucks to child care, bakeries, home care agencies and more, and span across Minnesota’s farms and cities.
WomenVenture’s ability to continue to offer these kinds of opportunities is suddenly more tenuous, however, now that the Trump administration has targeted the Treasury CDFI Fund for significant cuts.
Minority banks fear consequences of Trump’s DEI rollback
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Big U.S. banks for years talked freely and frequently about their diversity, equity and inclusion initiatives, saying they were pushing for change both inside their companies and in the communities they serve.
They publicly committed to hiring more women and minorities. They set representation goals, including in upper management. They required a diverse slate of candidates for job openings.
But the Trump administration’s recent onslaught against DEI policies and practices — including an executive order calling DEI “illegal” — has led the big banks to rethink their public stances.
FDIC rescinds Biden-era merger policy, slew of pending rules
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The board of the Federal Deposit Insurance Corp. voted on March 3 to issue a proposed rule to supersede a Biden-era statement of policy applying heightened scrutiny on bank mergers and withdrew several pending rules issued late last year.
The proposed rule would nullify standards finalized in 2024, reinstating the prior bank merger standards — issued in 2008 — on an interim basis while the board charts a new course on bank mergers. The proposal will be open for public comment for 30 days following publication in the Federal Register.
“The proposal approved … seeks to address concerns the 2024 Statement added considerable uncertainty to the merger application process,” a release
One issue looms as Capital One’s megadeal hits home stretch
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The Capital One-Discover merger saga, which has been underway for a year, is entering a key stretch, with the deadline to close the deal looming in May.
While the two banks and most industry experts are still optimistic that Capital One Financial will be able to clinch the blockbuster, $35 billion acquisition, questions about the combined company’s market share in subprime credit card debt have raised flags about competition in the space.
According to a
FDIC grappling with attrition, unresolved workplace issues
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The Federal Deposit Insurance Corp. faces unresolved workplace culture issues and staff attrition that threatens its ability to fulfill its regulatory responsibilities, according to a report by the agency’s Office of Inspector General.
Long-standing workplace culture concerns and the Trump administration’s efforts at government restructuring are major challenges for FDIC staff, the OIG
“As a result of staff attrition, the FDIC will need to ensure that it has sufficient staff with the necessary skills and qualifications to complete statutorily required examinations and should assess the impact of attrition on the FDIC’s capacity to execute resolutions and receiverships effectively,” the OIG said in its report.
