Fintech 2025

USA Trends and Developments Contributed by: Donald J. Mosher, Kara A. Kuchar, Melissa G.R. Goldstein, Jessica Romano and Adam J. Barazani, Schulte Roth & Zabel LLP

• “Open Banking Rule” – this rule, which was finalised in 2024, requires certain depository and non-depository entities, referred to as data providers, to make certain data relating to consumers’ transactions and accounts available to consumers and authorised third parties. It is intended to promote competi - tion by giving consumers control over their financial data. While other countries have already adopted formal open banking regu - lations, open banking in the US has been fourteen years in the making and has devel - oped through private sector initiatives over this time. While the Open Banking Rule is generally supported by the fintech industry as facilitating competition in the marketplace, it is being challenged in federal court by the banking industry. • Consumer data and privacy protections – through a number of actions, the CFPB expressed its concern with the misuse, shar - ing, and protection of sensitive consumer financial data. It issued a report in December 2024 highlighting a gap in privacy protec - tions afforded to consumers at the state level as new state privacy laws carve out financial institutions or financial data already subject to the Fair Credit Reporting Act (FCRA) or Gramm-Leach-Bliley Act (GLBA). Following this report, the CFPB targeted both the FCRA and GLBA. In December 2024, the CFPB issued a proposed rule under the FCRA to ensure that its protections apply to all data brokers that transmit consumers’ sensitive personal and financial information. In January 2025, the CFPB issued a request for informa - tion regarding the collection, use, sharing, and protection of consumer financial data, such as data obtained from processing pay - ments, to help gather proposals for amending GLBA’s implementing regulation.

• A focus on Big Tech and payments accounts – during Director Chopra’s tenure, the CFPB increased its focus on Big Tech in the pay - ments space, targeting companies like Google, Apple, and PayPal. Rather than rely solely upon the CFPB’s authority to supervise entities that pose risks to consumers, the CFPB issued a final rule establishing general supervisory authority over non-banks provid - ing funds transfer or payment wallet func - tionalities through digital applications where such providers facilitate an annual covered transaction volume of at least 50 million transactions. However, on 5 March 2025, the Senate passed a joint resolution disapproving this rule, which suggests it may not survive. Aligned with its focus on the payments space, the CFPB also issued a proposed interpre - tive rule in January 2025 designed to apply consumer protections generally applicable to traditional checking accounts and prepaid accounts to certain video game accounts, vir - tual currency wallets, and credit card rewards points accounts. With the CFPB’s enforcement activity coming to a halt, state attorneys general and banking regu - lators are expected to take a more active role in consumer protection. In a January 2025 report issued just prior to Director Chopra’s departure, the CFPB encouraged states to strengthen their consumer protection laws by banning “abusive” practices, expanding enforcement authority, and ensuring private rights of action, while also highlighting junk fees and consumer privacy as key areas for increased oversight. As federal enforcement activity slows, fintech companies should anticipate some state regulators taking up the CFPB’s mantle.

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