N/A - General CFPB Policy Memo
On April 16, 2025, the CFPB issued a supervisory and enforcement memo signaling a significant reduction in federal oversight of fintech companies. The memo rescinded prior enforcement priorities that had targeted nonbank financial companies and deferred regulatory authority to state-level enforcers such as NYDFS and the California DFPI. The CFPB also adopted a no-priority stance on its nonbank registration rule, effectively shelving a key tool for tracking fintech activities. This shift is expected to create a more fragmented regulatory landscape for BaaS and fintech companies operating across multiple states. Industry observers note this could increase compliance complexity as state regulators fill the federal enforcement gap with varying approaches and standards.
Verified from source: On April 16, 2025, CFPB Chief Legal Officer Mark Paoletta issued a memorandum setting out 2025 supervision and enforcement priorities, rescinding all prior enforcement and supervision priority documents, shifting focus away from fintechs toward largest banks, reducing supervisory exams by 50%, deprioritizing Biden-era topics, and deferring enforcement to states where permissible.
- Creates a regulatory vacuum at the federal level that state regulators are expected to fill with potentially inconsistent standards
- BaaS sponsor banks may face increased state-level scrutiny of their fintech partners
- Fintechs operating nationally will need to manage multi-jurisdictional compliance as CFPB steps back
- May reduce federal enforcement risk for BaaS programs in the near term but increase long-term state-level risk