What’s Going on in the World of Enforcement?

AN EXAMINATION OF RECENT CFPB, DOJ, SEC DEVELOPMENTS AND THEIR IMPACT ON THE FINANCIAL SERVICES INDUSTRY

In this webinar, our attorneys discussed the latest developments at the Consumer Financial Protection Bureau (CFPB), the Department of Justice (DOJ), and the Securities and Exchange Commission (SEC), and what these changes may mean for the financial services industry.

Takeaways

CFPB Enforcement Is Effectively Paused: The Consumer Financial Protection Bureau (CFPB) is currently under the leadership of Acting Director Russell Vought, with enforcement operations largely inactive due to a stop order and minimal staffing in the front office.

Regulatory Rollbacks at CFPB: The Bureau has repealed numerous guidance documents and rules, including proposing to end the non-bank repeat offender registry and lifting two redlining consent orders. It has also proposed to scale back the Civil Penalty Fund, which was designed to fund consumer financial education.

DOJ Shifts to Incentivize Cooperation: The Department of Justice (DOJ) has introduced a revised enforcement plan emphasizing fairness and efficiency. Companies that self-disclose, cooperate, and remediate may now receive declinations or reduced penalties—even with aggravating factors.  DOJ has also revised its corporate whistleblower program to add new priority areas of focus.

New DOJ Priorities: DOJ is prioritizing enforcement in areas such as digital asset crimes, complex frauds, trade and customs fraud, and violations affecting national security. However, these priorities have not been accompanied by increased staffing, raising questions about actual enforcement capacity.

State AGs Begin to Fill the Gap: With federal CFPB enforcement slowing, state attorneys general—particularly in New York, California, Illinois, Pennsylvania, and Washington—are ramping up efforts. Initiatives include new crypto laws, embedded finance scrutiny, enhanced “unfair” and “abusive” standards, and multi-state coordination in consumer protection lawsuits.

SEC Returns to Basics: Under Chairman Paul Atkins, the SEC is likely to focus on traditional enforcement areas like fraud, insider trading, and market manipulation. Staffing in Enforcement is being reduced to 2010 levels, and formal orders now require Commission approval, likely slowing the pace of enforcement actions.

Increased Emphasis on Self-Disclosure Across Agencies: Both the DOJ and CFTC have introduced clearer frameworks for companies to understand the benefits of voluntary self-disclosure. The SEC may follow suit, aligning with a broader regulatory trend toward transparency and cooperation incentives.