Today's podcast episode takes us back to a significant webinar that took place on November 12, 2024. Our special guests, Colin Carr, Vice-President of Congressional affairs at the Consumer Bankers Association, Ian Katz, Managing Director at Capital Alpha Partners, and John Culhane, a partner in the Consumer Financial Services Group at our firm, shared valuable insights.

President-Elect Trump's Victory and Election Outcomes

The webinar kicks off with Colin providing an in-depth overview of President-Elect Trump's victory and the Senate and House elections. These elections led to the Republicans achieving close majorities in both chambers. This significant development has implications for confirming Trump nominees for various positions and potentially overriding final rules published in the Federal Register. For instance, it includes the "open banking" rule related to consumer control of their records at banks under Section 133 of Dodd-Frank.Colin's analysis sheds light on how these election results could shape the future regulatory landscape and the potential for the Republicans to have a substantial impact on key policies.

Leadership Changes at Regulatory Agencies

Ian then focuses on certain leadership changes at the CFPB, FDIC, OCC, FRB, and FTC. He explores the possibility of Trump using recess appointments to nominate the leaders of these agencies. This discussion is crucial as it could bring about significant shifts in the regulatory approach and decision-making processes within these institutions.Ian's insights highlight the potential for these leadership changes to influence the direction of regulatory policies and how they might impact different sectors of the economy.

Current Status and Expected Outcomes of Agency Regulations

John Culhane takes a deep dive into the current status and expected outcomes of various agency regulations. This includes the CFPB's $8 credit card late fee rule, the small business data collection rule under Section 1071 of Dodd-Frank, the Buy-Now, Pay-Later interpretive rule, the "open banking" rule, and the changes to the UDAAP Exam Manual.These regulations are the subject of pending litigation, and John's analysis provides a comprehensive understanding of the legal challenges and potential outcomes. He also discusses the FTC's "CARS" rule and the "Click to Cancel" rule, which are also facing litigation.Finally, John examines the FDIC's "brokered deposits" rule and its implications for the financial industry.

Overturning and Modifying Legislative Rules

We explain in detail how final legislative rules can only be overturned or modified through specific legal procedures. If the rules were adopted after August 1, 2024, they can be overridden through the Congressional Review Act. Alternatively, a repeal or modification can be proposed under the Administrative Procedure Act, which is a lengthy process similar to the one used to promulgate the regulations.We also discuss the possibility of a final judgment by a court invalidating the rule. This provides a clear understanding of the legal mechanisms available for making changes to regulatory rules.

CFPB Funding and Its Implications

We further explore whether the new CFPB Director may concede that the CFPB has been unlawfully funded under Dodd-Frank. Since the FRB can only fund the CFPB out of "combined earnings of the Federal Reserve Banks" and there have been no such combined earnings since September 2022, this is a crucial issue that could have significant implications for the agency's operations and regulatory authority.Our discussion delves into the potential consequences and the legal aspects surrounding this funding matter.Alan Kaplinsky, Senior Counsel and former practice group leader for 25 years of the Consumer Financial Services Group at Ballard Spahr, hosts the episode, ensuring a wealth of expertise and insights are shared.