Fintech 2026

USA TRENDS AND DEVELOPMENTS Contributed by: Donald J. Mosher, Melissa G. R. Goldstein, Adam J. Barazani and Leel Sinai, McDermott Will & Schulte LLP

to investigate violations of state consumer protection laws, and Oregon convened legislative hearings to explore additional mechanisms to strengthen enforce - ment capacity. In parallel, fintechs have seen an uptick in private con - sumer class-action litigation, further contributing to enforcement risk. The overall picture is one of height - ened scrutiny across a patchwork of jurisdictions, in which regulatory expectations vary and legal interpre - tations diverge. The CFPB’s reduced activity remains an important backdrop. Most notably, the CFPB’s so-called open banking rule, finalised in October 2024, was intended to require financial institutions and certain non-bank data holders to provide access to account and trans - action data, with phased compliance in 2026. In 2025, however, the CFPB signalled that it intended to sub - stantially revise or replace the rule and commenced a new rulemaking process. A federal court subsequently issued a preliminary injunction halting enforcement and suspending the compliance timeline. As a result, the rule is not operative and its implementation has been paused, and the prospect of a US open banking framework currently remains uncertain. For fintech firms, the shift has not necessarily yielded a materially lighter compliance burden. Instead, firms must navigate an increasingly fragmented and state- driven consumer protection landscape, with height - ened enforcement activity, divergent legal standards, and growing litigation exposure across multiple juris - dictions. BNPL, EWA, and MCAs: Emerging Product Oversight The continued growth of alternative financing prod - ucts such as buy now, pay later (BNPL), earned wage access (EWA), and merchant cash advances (MCAs) has drawn intensified regulatory attention as states increasingly take the lead. With the CFPB stepping back, states are setting the agenda, creating a frag - mented compliance landscape for providers. BNPL continues to expand rapidly but concerns about consumer credit overextension and disclosure prac - tices prompted regulatory scrutiny in 2025. Although

the CFPB has largely disengaged from oversight, withdrawing a Biden-era interpretive rule which would have treated BNPL providers as credit card issuers, multiple states have stepped in. In late 2025, Con - necticut, California, Illinois, Wisconsin, North Carolina, Colorado and Minnesota issued information requests targeting BNPL companies’ loan servicing and dispute resolution practices. New York went further, requiring BNPL companies to obtain state licensure and comply with APR disclosure rules, and Nevada enacted more industry-friendly legislation, removing in-state office requirements but maintaining general state law com - pliance. This state-by-state compliance patchwork has become increasingly complex for providers oper - ating nationally and has encouraged some to pursue partnerships with banks or adjust product structures to manage regulatory risk. State approaches to EWA continued to diverge in 2025. A minority of states, most notably Connecticut, continued to apply a credit-classification framework, treating certain EWA offerings as regulated lending products. Other states adopted bespoke EWA stat - utes that formally recognise EWA as a distinct finan - cial service. Some of these regimes require registra - tion or licensing, such as Maryland and Indiana, while others, including Louisiana, rely primarily on statutory standards and prohibitions enforced under general consumer-protection authority without a separate licensing framework. Proposed legislation in New York underscores the ongoing policy debate, as it would cap the cost of EWA services while expressly exempt - ing compliant programmes from the state’s general usury limits. Federal guidance has provided some clarity. In December 2025, the CFPB issued an advi - sory opinion confirming that certain employer-part - nered EWA programmes do not constitute loans under the Truth in Lending Act, provided they meet specific criteria. At the same time, the bureau withdrew a July 2024 proposed rule that would have broadly classified most EWA payments as credit. Further guidance in 2026 is possible, and significant federal enforcement is not anticipated. MCAs faced mixed treatment in 2025. Federally, a late- 2025 CFPB proposal would remove MCAs from the definition of a “covered credit transaction”, signalling a more permissive approach. At the state level, Texas’

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