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Vought tells Congress CFPB needs major changes, even abolishment

During recent Congressional Hearings Acting CFPB Director Russell Vought, testifying for the first time in that capacity, stated that the Trump Administration has succeeded in improving the structure and operation of the CFPB, but more work needs to be done.

In fact, in testimony before the Senate Committee on Banking, Housing, and Urban Affairs he said he would prefer that the agency be abolished.

“Though we have improved a great deal about how it operates, the Bureau remains structurally defective, and I do not believe it should exist in its current form,” Vought told the House Financial Services Committee. “I have been committed to running it in a responsible manner and addressing real harms instead of remaking financial markets in service of a radical political agenda.”

Read more at Ballard Spahr LLP

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ValidiFI®, a leading provider of alternative data and predictive analytics, empowers smarter decisions and payments through non-permissioned

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CFPB Issues Ability-to-Repay Guidance Following Executive Order on

Immigration Status and Financial Services

The CFPB recently issued a statement reminding creditors that applicants' immigration status may be relevant to the ability-to-pay analyses required under Regulation Z. Notably, the statement differs from past CFPB guidance on the consideration of immigration status in underwriting. While nonbinding, the statement provides important guidance to creditors seeking to ensure that they conduct a sufficient ability-to-pay analysis.

Background

The statement follows the withdrawal of a joint CFPB and Department of Justice statement cautioning that creditor policies related to an applicant's immigration or citizenship status could, in certain circumstances, run afoul of ECOA's and Regulation B's prohibition of discrimination on a prohibited basis, including race and national origin. The agencies withdrew this statement in January 2026, stating that ECOA and Regulation B generally permit creditors to consider citizenship status and that the prior statement may have created confusion.

Read more at Venable LLP

FTC Takes Aim at AI Accuracy by the Consumer Financial Services Group

at Ballard Spahr LLP

The Federal Trade Commission recently issued a proposed policy statement that could reshape how financial services firms use AI-powered tools. The proposed statement, titled “Proposed Policy Statement Concerning the Suppression of Accuracy in Artificial Intelligence Systems,” puts AI developers on notice that altering AI outputs away from accuracy, even if done to comply with a state law, may constitute consumer deception under Section 5 of the FTC Act.

The Core Theory: Accuracy Suppression as Deception

In December 2025, the Administration issued an Executive Order calling for the FTC to issue a policy statement on the application of the FTC Act’s prohibition on unfair and deceptive acts or practices to AI models. Stemming from that request, the Commission has asserted that AI companies that “steer the outputs of their AI systems toward unexpected objectives, and away from the objectives set by or reasonably expected by users, are likely to deceive consumers in violation of Section 5 of the FTC Act.”

Read more at Ballard Spahr L.L.P.

Have a tax law question?

Our #IRS Interactive Tax Assistant has answers.

Watch this short video to learn more:

https://youtu.be/y6HkaBkdKdU

Jose L. Santiago

Public Affairs Specialist

Tax Outreach, Partnership and Education

Email: jose.l.santiago@irs.gov

How Fintech Startups are Quietly Transforming Access to Financial Services for Underbanked Citizens

By removing physical infrastructure barriers and the high fees associated with traditional banking, fintech startups are becoming pioneers in financial inclusion. 

The ability to access financial services is not only a pillar for inclusivity but an essential tool for providing individuals with the ability to work their way out of poverty and make use of borrowing services to build businesses and make one-off purchases. 

However, an estimated 1.3 billion people worldwide remain unbanked, according to the World Bank Global Findex 2025 report. 

While the United States has a higher ratio of individuals who have full access to a suite of financial services, more than 18% of households don’t fully participate in the banking system. 

Read more at Finextra

Strong retail sales mask widening K-shaped economy as consumer financial stress mounts

(Kitco News) - The U.S. consumer continues to support economic growth, but beneath resilient headline spending, new data point to mounting financial stress for many households.

Retail sales rose 0.2% in June, matching economists' expectations after May's revised 1.0% increase, according to the Commerce Department. Economists said the report shows consumer spending remains resilient despite elevated inflation and higher borrowing costs, reinforcing expectations that the Federal Reserve still has room to prioritize price stability.

However, LegalShield's latest Consumer Stress Legal Index (CSLI) shows financial stress continuing to build as more Americans seek legal assistance for foreclosures, bankruptcies, and consumer finance issues.

Read more at Kitco Metals Inc

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LEND360 will bring together online lending professionals from across the country to share insights, solve industry challenges, and create business solutions. With the fintech environment and regulation rapidly evolving, this is your chance to learn the trends and information needed to move your business forward in an uncertain economy.

Join your fellow thought leaders at LEND360 at the

Fairmont Austin Hotel from October 12-14, 2026.

Backing the president’s fintech order

“Regulation should preserve confidence in the system, but it should not inhibit responsible innovation,” writes one financial services lawyer.

Financial innovation is essential to economic opportunity. Consumers need practical tools to borrow, save, pay, build, invest and manage the financial realities of daily life. The recent executive order on financial technology innovation is important because it points toward a regulatory framework to make those tools easier to build responsibly.

The President’s executive order, “Integrating Financial Technology Innovation Into Regulatory Frameworks,” matters because the American consumer is one of the principal reasons the American economy is the world’s strongest

Read more at Payments Dive

Senate Banking Committee pushes CFPB regulatory overhaul in consumer finance debate

Republican lawmakers are sharpening their push to reset consumer finance oversight as the Consumer Financial Protection Bureau presents its semiannual report to Congress. At a Senate Banking Committee hearing in Washington, Chairman Tim Scott says the agency should focus on competition, consumer choice and lower costs, while rolling back what he describes as excessive Biden-era regulation.

Highlights

• Senate Banking Committee, led by Scott, pressed Acting CFPB Director Russ Vought for clearer, more durable consumer finance rules within statutory limits on June 6.
• Scott warned that excessive CFPB regulation on overdraft services and credit card pricing could reduce credit access, especially for consumers with lower credit scores.
• Senators called for structural reform to the CFPB, including reduced statutory funding caps and heightened accountability, potentially shaping future sector rulemaking and supervision.

Read more at Traders Union

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Seventh Circuit Holds TCPA Do-Not-Call Claims Do Not Cover Text Messages

by Sheppard, Mullin, Richter & Hampton LLP

On July 14, the U.S. Court of Appeals for the Seventh Circuit held that text messages are not “telephone calls” covered by the private right of action in Section 227(c)(5) of the Telephone Consumer Protection Act. The court affirmed the dismissal of a consolidated class action alleging that a medical services provider sent consumers marketing texts and calls after they opted out or registered their numbers on the National Do-Not-Call Registry.

Section 227(c)(5) permits a consumer who receives more than one telephone call within a 12-month period in violation of Federal Communications Commission regulations to seek injunctive relief and statutory damages. The Seventh Circuit concluded that the provision does not authorize claims based on unwanted texts. Specifically, the court:

Read more at JD Supra, LLC

Federal Banking Agencies Release Collaborative Guidance for Lending Practices 

According to a new report from Consumer Finance Monitor, on July 13, the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), and the National Credit Union Administration (NCUA) released interagency guidance to remind the financial institutions under their supervision of their ongoing safety and soundness responsibilities when providing credit to individuals who lack legal authorization to work in the U.S.

To date, the Federal Reserve Board has not issued any similar guidance.

This guidance is in line with President Donald Trump’s Executive Order 14406, titled Restoring Integrity to America’s Financial System, which was issued on May 19.

That executive order instructed federal banking agencies to tackle the risks posed to the financial system by extending credit and financial services to individuals deemed “inadmissible” or “removable” under immigration laws.

Read more at The Mortgage Point

The AI calling Compliance Guide for Collection Agencies

by Adrian Ferrante-Bannera

What you need to know about TCPA compliance for AI calling in debt collection - backed by FCC rulings, not guesswork. A practical starting point.

What we've learned about AI calling compliance as we build our AI debt collectors. Backed by FCC rulings, industry data, and actual regulations - not guesswork. This is a starting point. We'll add more as we learn more.

AI voice agents are having a moment in debt collection. According to TransUnion's 2025 industry report, 93% of collection agencies are now using or planning to use AI/ML technologies - up from just 49% in 2023.1

The technology moved faster than the regulations. Now agencies are navigating a landscape where some rules are settled, others are proposed but not final, and many are implementing AI without the systems needed to stay compliant.

What's settled: AI calls = robocalls

corafone

15 States That Don’t Tax Pension Income

Retirement income from a defined benefit plan goes further in these states

In most cases, payments from traditional pension plans — or defined benefit plans — are fully taxable for federal income tax purposes. But when it comes to state taxes on pension income, it’s very much a mixed bag.

Despite a wide variety of exemptions and other tax breaks that reduce taxes on pension income, most states tax at least some pension payments. However, there are 15 states where all traditional pension payments, including private-sector, government and military pensions, are exempt from state taxes.

But even if you live in one of those states, you might still owe other state taxes. For instance, you may have to pay state taxes on other retirement income, such as IRA or 401(k) plan distributions (but not on Social Security benefits). And there are other taxes to worry about as well, such as sales, property, estate and inheritance taxes.

Read more at AARP

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White House Launches “GOLD EAGLE” AI Cybersecurity Clearinghouse: What It Could Mean for Financial Institutions By Alan S. Kaplinsky 

The White House has announced the launch of GOLD EAGLE, a new artificial intelligence-powered cybersecurity clearinghouse intended to accelerate the identification, verification, prioritization, and remediation of software vulnerabilities across both the public and private sectors. According to the White House announcement, the initiative is designed to leverage frontier AI capabilities to identify cyber vulnerabilities more quickly than existing methods while reducing duplicative scanning efforts and providing actionable remediation information to government agencies and private-sector organizations.

The initiative implements one of the principal directives contained in President Trump’s June 2, 2026 Executive Order, Promoting Advanced Artificial Intelligence Innovation and Security, which called for the establishment of a voluntary AI cybersecurity clearinghouse in collaboration with AI developers, open-source software communities, and operators of critical infrastructure. The White House announcement states that GOLD EAGLE has already begun collecting vulnerability information from multiple industries, coordinating validation efforts, and facilitating the deployment of software patches.

Read more at Ballard Spahr LLP

How to Succeed with Agentic AI: Give It Major Tasks, But Don’t Hand It Entire Jobs

Imagine building a self-driving car. You would not drop it onto a busy highway and tell it to figure out the rules of the road. First, you would have to teach it context, give it a map, and clearly define its operational boundaries.

The same rule applies to AI agents in banking. When financial providers give an agent too much freedom to replace an entire role, costs climb, and workflows break down.

Redesigning work means assigning specific tasks, not entire jobs.

Key insight: Capability without structure does not scale — robust system architecture must be the foundation for predictable artificial intelligence.

Read more at The Financial Brand

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CFPB Issues RFI on TRID Rule, Rescission and Reverse Mortgages

By Richard J. Andreano, Jr. & John L. Culhane, Jr.

The CFPB recently issued a request for information (RFI) on the Truth in Lending Act (TILA)/Real Estate Settlement Procedures Act (RESPA) Integrated Disclosure (TRID) rule, the right of rescission under TILA, and reverse mortgages. Comments are due by August 10, 2026.

The RFI is based on the March 2026 Executive Order (EO) 14393 entitled “Promoting Access to Mortgage Credit”. The EO focuses on promoting mortgage originations by community banks and banks with less than $100 million in assets. After addressing the general goals of the EO, the CFPB quotes the EO provision directing it to “consider, as appropriate and consistent with applicable law:

(i) proposing amendments to Regulation Z that tailor the following requirements for smaller banks: [ability to repay] and [qualified mortgage (QM)] requirements (including potentially a broader QM safe harbor for portfolio loans) and the requirements of the Truth in Lending Act . . ., Real Estate Settlement Procedure[s] Act, . . . and [TRID rule];

Read more at Ballard Spahr L.L.P.

New York Proposes Licensing and Credit Standards for BNPL Lenders

The proposed rule establishes a framework for licensing, underwriting, interest rate and late fee caps, and consumer dispute mechanisms.

The New York State Department of Financial Services (DFS) has issued a notice of proposed rulemaking to bring the Buy Now, Pay Later (BNPL) sector under strict state supervision.

Published on July 15, 2026, the proposed regulation (PDF) — codified as a part of the New York Codes, Rules and Regulations — implements state legislation requiring non-exempt BNPL providers to obtain state operating licenses and adhere to credit-card-style consumer protection frameworks.

Read more at ACA International

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Management & Payment Processing

Mortgage rates jump to highest level in almost a year

Average rate on the benchmark 30-year fixed mortgage climbs to 6.55%, Freddie Mac says

Mortgage rates rose this week to the highest level in nearly a year, mortgage buyer Freddie Mac said Thursday.

Freddie Mac's latest Primary Mortgage Market Survey, released Thursday, showed the average rate on the benchmark 30-year fixed mortgage climbed to 6.55% – the highest level since August 2025 – from last week's reading of 6.49%.

The average rate on a 30-year loan was 6.75% a year ago.

Read more at FOX BUSINESS

How real-time payments expand

An early Stripe executive predicts big advances for the growth of consumer-level, real-time payments over the next 18 months.

Payment speeds are increasing amid banks’ wider use of real-time networks like FedNow and The Clearing House’s RTP. But such payments aren’t yet standard in consumer use cases.

That’s changing, however, as financial technology startups move into the payments industry and seek more nimble solutions, said Darragh Buckley, the founder and CEO of Increase, which provides banking services via API connections.

Buckley says he was Stripe’s first hire in 2010, shortly after siblings John and Patrick Collison co-founded the payments company, leaving six years later to pursue his own fintech ambitions. In 2020, he founded Increase, which offers companies software for tasks such as bill payment, payroll and loan servicing.

Read more at PaymentsDive

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