First 100 Days: Upcoming Regulatory Signals for Financial Services
Indicators of potential regulatory shifts to agency mission/operations and regulatory focus
KPMG Regulatory Insights
- Leadership Shifts: Acting leadership at financial service agencies are re-prioritizing their mission and regulatory focus, with statements supporting the Administration’s policy priorities.
- Regulatory Withdrawals: Initial agency regulatory withdrawals have started (e.g., SEC SAB 121) with more expected swiftly.
- Enforcement/Lawsuits Halted: In addition to new rulemaking, incoming agency leadership is largely asking for current enforcement/lawsuit activity to ‘pause’.
- Upcoming Supervision/Enforcement: Future supervision/enforcement likely to focus on ‘core financial risk’, with states/state AGs more active in consumer protections.
- Quick Actions: Expect rapid re-prioritized agency actions once acting leadership is in place (e.g., M&A guidance, etc.) but a much longer timeline for those requiring Congressional action.
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February 2025
Amidst the flurry of actions of the new Administration, the financial services industry (inclusive of banking, capital markets, asset management, fintech and insurance) looks to track indicators of likely regulatory changes. Incoming and acting agency leadership as well as initial Executive Orders (including those on “regulatory freeze” and digital assets) provide preliminary signals for potential regulatory shifts, including in the areas of:
- Agency Mission/Operations
- Regulatory Focus
1. Agency Mission/Operations
Across agencies, current, incoming and acting agency leadership is setting parameters for regulatory activity going forward, including initial support for:
Signals | Description/Examples | Source |
|---|---|---|
Statutory Mandate | Ensure the agency remains within its statutory mandates, including the promotion of a safe, sound, and resilient system | |
“Refocus and change direction with new leadership to fulfill our statutory mandate to promote responsible innovation and fair competition in our markets that have continually evolved over the decades” | ||
Regulatory Withdrawal | Implementation of Executive Order (EO) to ”pause” new rulemaking, enforcements, etc. (e.g., CFPB “halt”) | |
Renew the commitment to “regulatory tailoring”; Consider regulatory and supervisory "trickle-down" (i.e., where regulators may expect smaller banks to meet expectations designed for larger institutions) | ||
Look to a potential withdrawal of various proposals from the past three years, such as those on brokered deposits and corporate governance, and pursue adjustments to capital and liquidity rules to balance economic growth with safety and soundness, and resilience | ||
Consider potential changes to disclosure rules, including proxy voting, and rules related to shareholder proposals Withdrawal of regulations (e.g., SEC Staff Accounting Bulletin 121 regarding crypto assets) | ||
Financial Focus | Focus on materiality as the foundation of disclosure Confirmation of focus to the fiduciary duty to funds | |
Prioritize safety & soundness | ||
State Activity | Look to re-confirm state nonbank oversight authority Re-consideration of preemption of state laws (e.g., consumer protection laws) |
|
Global Pullback | Pullback and/or withdrawal from membership and/or participation in global regulatory groups (e.g., Network of Central Banks and Supervisors for Greening the Financial System) | |
Supervision | Improve the transparency of regulatory communication to allow banks to know what regulators think about the permissibility of particular activities, or what parameters and rules should apply to those activities | |
Focus supervision on core financial risks over processes Reevaluate the supervisory appeals process | ||
Market impact analysis of GSE conservatorship under FHFA | Treasury/FHFA: PSPA |
2. Regulatory Focus
In addition to statements regarding agency mission and operations, current, incoming and acting agency leadership is also noting potential changes in key regulatory areas, including:
Signals | Description/Examples | Source |
|---|---|---|
M&A | Look to employ a more “nimble and predictable” approach specifically in the de novo formation and M&A | |
Potential for “replacement” of the 2024 Statement of Policy Encouragement for more de novo activity for a pipeline of new entrants | ||
Crypto/digital assets | Implementation of Executive Order on strengthening American leadership in digital financial technology | |
Launch of a Crypto Task Force dedicated to developing “a comprehensive and clear regulatory framework for crypto assets” | ||
Look to adopt a more flexible approach to innovation and technology, including digital assets and tokenization | ||
“De-banking”/ | Desire for policy to address the needs of the unbanked and expand the availability of banking services | |
Ensure law-abiding customers maintain access to bank accounts and services | ||
Innovation & Tech | Implementation of Executive Orders on leadership in digital financial technology and AI | |
Look to adopt a more flexible approach to innovation and technology, including fintech partnerships | ||
Reliance on third parties to support key systems and tools (e.g., AI) Incidence and evolution of investment fraud | ||
Improving state/federal partnership, information sharing arrangements and examination coordination (e.g., third-party service providers, cybersecurity) |
Dive into our thinking:
First 100 Days: Upcoming Regulatory Signals - Financial Services
Indicators of potential regulatory shifts to agency mission/operations and regulatory focus
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