January 30, 2025

The Government Update

​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​is issued by the Innovative Payments Association twenty times a year as a service to members.
Editors: Brian Tate, President and CEO, IPA; Ben Jackson, COO, IPA;  Eli Rosenberg, Partner, Baird Holm LLP; and Gray Derrick, Partner, Baird Holm LLP. Please address comments and suggestions to: [email protected].

2025 Industry Outlook and New Regulatory Shifts: How IPA is Shaping the Future of PaymentsAs we enter 2025, the payments industry finds itself at a pivotal juncture, shaped by shifting regulatory landscapes and evolving political priorities. With a new administration and the 119th Congress taking office, the Innovative Payments Association (IPA) is doubling down on its commitment to advocate for clear policies and promote innovation in financial services.

The recent Republican sweep of the White House and Congress has sparked debates about deregulation and reshaping financial oversight. Proposals to repeal existing regulations through the Congressional Review Act (CRA), calls to eliminate the Consumer Financial Protection Bureau (CFPB), and other deregulatory measures suggest significant changes may be on the horizon. However, industry leaders must temper their expectations. History shows that even in a politically aligned government, regulatory shifts are rarely straightforward or absolute.

While deregulatory measures such as revisiting the Open Banking Rule may gain momentum, their implementation faces procedural and legal challenges. Additionally, the CFPB, often seen as a target for reform, may remain a key player under the new administration. With its record of bipartisan enforcement actions and new authority to regulate big tech, the agency may adapt rather than disappear.

In this uncertain landscape, the payments community must maintain robust compliance and advocacy strategies. At the same time, leaders in Congress and the administration must recognize the vital role of financial technology in driving economic growth.

Unleashing the Potential of Payments Innovation
The payments industry has long been a cornerstone of financial inclusion, empowering millions of Americans with tools to manage their finances, save money, and achieve their goals. Yet inconsistent regulatory approaches have stifled the full potential of financial technology (fintech) products such as earned wage access, mobile wallets, and fintech debit accounts.

Despite challenges, the industry has achieved remarkable milestones. The FDIC’s latest report shows that 96% of American households are banked—the highest level in nearly 20 years—thanks in part to diverse fintech offerings. These innovations have brought more people into the mainstream financial system than ever before.

However, contradictory regulatory signals remain a barrier. For example, while the CFPB mandates data sharing between financial institutions and fintechs, it also warns consumers to approach fintech products with caution. Similarly, the FDIC proposes rules that could increase costs for these same products, undermining their accessibility and impact.

The payments industry supports reasonable, evidence-based regulation that balances consumer protection with innovation. To truly harness the promise of fintech, policymakers must move beyond political agendas and work collaboratively with the industry to establish clear, consistent, and practical guidelines.

IPA’s Vision for 2025
The Innovative Payments Association is ready to play a central role in shaping the future of payments. Through strategic advocacy, education, and collaboration with stakeholders, the IPA aims to:

• Advocate for policies that promote competition, innovation, and consumer protection.
• Encourage the adoption of a national regulatory framework that supports fintech growth.
• Provide resources and insights to help members navigate the evolving political and regulatory landscape.

 
Now is the time to unleash the potential of financial technology to improve lives and support economic growth. By working together, policymakers, regulators, and the payments community can build a stronger, more inclusive financial system that benefits all Americans. 

55% of Payments Firms Say Compliance Function is Overwhelmed at Least 1x Month

As we step into the new year, many payments firms are already feeling the weight of their compliance burdens, with an expectation that it will only increase in 2025. 

Staying ahead requires real-time insights into regulatory changes, industry trends, and technological advancements to make informed decisions and tackle compliance challenges effectively.

To help you navigate this landscape, IPA member Vixio Regulatory Intelligence surveyed 127 payments organizations worldwide and created this forward-looking report to give you actionable insights into the evolving regulatory environment.

What’s inside?
➡️ The biggest challenges payments organizations are facing
➡️ Key growth opportunities for 2025
➡️ Practical strategies to navigate challenges and ensure compliance
...and more!

Download your copy here: https://discover.vixio.com/paymentscompliance-pc-outlook-report-2025-ipa/ 

Trump Issues Regulatory Freeze
Within a few hours of his swearing in, President Trump issued a number of Executive Orders. Among the dozens of EO’s signed by the President was an EO entitled, “Regulatory Freeze Pending Review.” You can read the full order below or here: Regulatory Freeze Pending Review – The White House
 
By the authority vested in me as President by the Constitution and the laws of the United States of America, I hereby order all executive departments and agencies to take the following steps:
 

1. Do 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 department or agency head may delegate this power of review and approval to any other person so appointed or designated by the President, consistent with applicable law.  The Director or Acting Director of the Office of Management and Budget (the “OMB Director”) may exempt any rule that he deems necessary to address emergency situations or other urgent circumstances, including rules subject to statutory or judicial deadlines that require prompt action.
2. 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 as described in paragraph 1, subject to the exceptions described in paragraph 1. 
3.  Consistent with applicable law and subject to the exceptions described in paragraph 1, 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.  During this 60-day period, where appropriate and consistent with applicable law, consider opening a comment period to allow interested parties to provide comments about issues of fact, law, and policy raised by the rules postponed under this memorandum, and consider reevaluating pending petitions involving such rules.  As appropriate and consistent with applicable law, and where necessary to continue to review these questions of fact, law, and policy, consider further delaying, or publishing for notice and comment, proposed rules further delaying such rules beyond the 60-day period.
4. Following the postponement described in paragraph 3, no further action needs to be taken for those rules that raise no substantial questions of fact, law, or policy.  For those rules that raise substantial questions of fact, law, or policy, agencies should notify and take further appropriate action in consultation with the OMB Director.
5. Comply in all circumstances with any applicable Executive Orders concerning regulatory management.

 
As used in this memorandum, “rule” has the definition set forth in section 551(4), title 5, United States Code.  It also includes any “regulatory action,” as defined in section 3(e) of Executive Order 12866 of September 30, 1993, as amended, and any “guidance document” as defined in section 2(b) of Executive Order 13891 of October 9, 2019 (Promoting the Rule of Law Through Improved Agency Guidance Documents), when that order was in effect.  Thus, the requirements of this memorandum apply not only to “rules” as defined in section 551(4) of title 5, but also to any substantive action by an agency (normally published in the Federal Register) that promulgates or is expected to lead to the promulgation of a final rule or regulation, including notices of inquiry, advance notices of proposed rulemaking, and notices of proposed rulemaking.  They shall also apply to any agency statement of general applicability and future effect that sets forth a policy on a statutory, regulatory, or technical issue or an interpretation of a statutory or regulatory issue.
 
The OMB Director shall oversee the implementation of this memorandum, and any communications regarding any matters pertaining to this review should be addressed to the OMB Director.  The OMB Director is also authorized to establish a process to review pending collections of information under the Paperwork Reduction Act of 1995, as codified in chapter 35, title 44, United States Code, and to take actions that the OMB Director deems appropriate based on that review, consistent with applicable law.
 
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.
 
The OMB Director is authorized and directed to publish this memorandum in the Federal Register.
 
This memorandum shall be implemented consistent with applicable law.
 
Trump Elevates Hill to Acting FDIC Chairman 
President Trump has elevated FDIC Vice Chair, Travis Hill, to Acting Chairman of the agency.  On his first day in his new position, Acting Chairman Hill released the following statement: “It is my honor and privilege to serve as Acting Chairman of the FDIC.  While the FDIC faces a broad range of issues, and as always will fulfill our mandate to promote a safe, sound, and resilient banking system, below is a list of matters I expect the FDIC to focus on in the coming weeks and months.”  
 
Amongst the several changes the new Acting Chair would like to implement are: 
 

• Adopt a more open-minded approach to innovation and technology adoption, including (1) a more transparent approach to fintech partnerships and to digital assets and tokenization, and (2) engagement to address growing technology costs for community banks.
• Withdraw problematic proposals from the past three years, such as proposals on brokered deposits and corporate governance.

To read the Acting Chairman’s full statement please visit the FDIC’s website here. 
 
Chopra Remains CFPB Director Post Inauguration 
Prior to January 20th, the prevailing conventional wisdom was that President Trump would move to immediately remove Rohit Chopra as Director of the Consumer Financial Protection Bureau.  As of this writing, Director Chopra still leads the CFPB.  However, it is widely expected that Trump will soon take steps to relieve Chopra of his duties. There are several theories why this has not taken place yet.  One is that the Trump administration could be waiting to have a few more Senate-confirmed officials, such as Scott Bessent at Treasury or Russ Vought at OMB before taking the affirmative steps to officially nominate someone to replace Chopra. 
 
IPA Responds to FEC Notice on Payment Forms
On January 27, 2025, the IPA filed comments responding to the Federal Election Commission’s published notice in the Federal Register entitled, “Contributions Through Untraceable Electronic Payment Methods.” The FEC sought public comment on whether it should proceed with such a full rulemaking. Comments were due to the FEC by January 27, 2025.  
 
The FEC released its request at the behest of Texas Attorney General Ken Paxton wrote the FEC petitioning it “to amend its regulations concerning the use of credit cards to make contributions, to address the potential use of prepaid cards to circumvent contribution amount limitations and source prohibitions.”  
 
The Petition asks the Commission to adopt two amendments to its regulations which would require that when contributions are made by credit, debit, prepaid or gift card, the campaign committee must “cross-check” the donor’s name and address with that information held by the issuer and contributions cannot be accepted from prepaid or gift cards unless the information from those prepaid or gift cards has been cross-checked. 
 
In brief, the IPA’s comments outline how heavily regulated payment products are by their primary regulator and the CFPB.  Thus, we urge the FEC not to take steps add an additional layer of regulation since payment products are used by millions of Americans to make campaign contributions. 
 
CFPB Rescinds 2020 EWA Advisory Opinion 
On January 6, 2025 the CFPB quietly, without any public announcement published an advisory opinion on its website to rescind the advisory opinion it issued in November 2020 related to EWA.  In brief, the CFPB states it “is rescinding the 2020 Advisory Opinion for two fundamental reasons: (i) its legal analysis is significantly flawed in numerous respects; and (ii) it engendered substantial regulatory uncertainty.”
 
More specifically, the CFPB writes that the 2020 Advisory Opinion was flawed due to: 
 

• “The first analytical flaw of the 2020 Advisory Opinion is that its consideration of the meaning of “debt” under state law was insufficient.”
• Second, the 2020 Advisory Opinion inferred that the consumer does not incur a liability when using the narrowly limited type of earned wage product covered by the opinion, but did not sufficiently justify the inference.
• Third, the 2020 Advisory Opinion did not consider all relevant factors as part of the “totality of the circumstances” approach it applied to determine what is “credit.”
• Fourth, the opinion’s claim that it was supported by certain statements in the 2017 Payday Rule is unpersuasive.

 
The advisory opinion is in effect as soon as it is published in the Federal Register. 

IPA Mentions/Reports:

•  IPA Pod: Reg E. Expansion – A Closer Look at the CFPB’s Proposal
• IPA Blog: 2025 Industry Outlook and New Regulatory Shifts: How IPA is Shaping the Future of Payments
  
• IPA Op-Ed: A More Empirically Based Banking Regulation 
• Digital Transactions: The Complications of Trump 2.0

Upcoming Events and Calls

• Next IPA Weekly GRWG Call: Feb. 10th
• Next IPA Monthly GRWG Call Feb. 13th