The Roundup: States Scrutinize BNPLs, Regulators Push Tailored Relief, CFPB Resignation, UK Banks Get Lending Boost, Third Rate Cut, Chopra Returns 

Welcome to the PerformLine Regulatory Compliance Roundup, home of the latest news, articles, and reports from our industry, curated for you. Let’s get into it.

In this edition:  BNPLs under state scrutiny, Regulators ease red tape, Another CFPB exit, UK capital shift, Fed rate cut looms, Chopra returns

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States Probe BNPL Loan Practices

Attorneys general from seven states have launched a formal inquiry into major Buy Now, Pay Later (BNPL) providers, requesting detailed information on loan terms, consumer protections, repayment policies, and dispute resolution procedures.

According to a press release from the California Department of Justice, the AGs want to determine whether these companies are complying with consumer protection laws or putting residents at financial risk. Their concerns are heightened by the increasing use of BNPL during the holiday season and the potential for consumers to accumulate unmanageable debt.

With federal oversight loosening, this multistate investigation signals that state officials are stepping up to demand transparency and accountability in the rapidly growing BNPL market. PaymentsDive

Regulators Embrace Risk-Based Oversight Over Red Tape

Federal regulators testified before the House Financial Services Committee last week, marking their first joint appearance under the current administration. Leaders from the Fed, OCC, FDIC, and NCUA signaled plans to ease capital requirements and tailor supervision based on bank size and risk.

Federal Reserve Vice Chair for Supervision Michelle Bowman called for raising outdated regulatory thresholds. She pointed to the $10 billion asset cap, which triggers stricter oversight, as a key barrier to small bank growth. She also called for a more tailored framework for community banks and suggested streamlining M&A reviews.

Regulators also outlined upcoming priorities, including a proposed stablecoin rule, efforts to scrap obsolete regulations, and a review of whether non-financial factors are improperly influencing credit decisions. Capital rules will be revised using a bottom-up, risk-based approach rather than following global standards. BankingDive

Top CFPB Enforcer Resigns Amid Enforcement Freeze

Michael Salemi, the top enforcement official at the Consumer Financial Protection Bureau (CFPB), will resign effective December 12, citing a lack of viable path forward for meaningful enforcement under current leadership. He expressed frustration over recent freezes on investigations and the dismissal of enforcement cases, saying these moves have made it impossible to sustain an effective program. His departure follows a wave of prior resignations and comes as the agency shifts course to planning staff cuts, transferring litigation to the Department of Justice, and narrowing its enforcement agenda. Bloomberg Law

Bank of England Cuts Capital Rules to Boost Lending

The Bank of England (BoE) has reduced the Tier‑1 capital requirement for UK banks from 14% to 13%, marking the first such easing since the 2008 financial crisis. The Financial Policy Committee (FPC), which made the decision, aims to encourage lending and economic growth by freeing up capital.

BoE Governor Andrew Bailey emphasized that banks should direct these funds toward boosting credit, not shareholder payouts. “Use the flexibility to support lending,” Bailey told journalists.

The move is part of a broader capital framework review that includes reassessing capital buffer usability and leverage ratio requirements. The BoE stressed that UK banks remain well-capitalized, with recent stress test results confirming they could weather severe economic shocks.

Analysts at RBC Capital Markets called the update “constructive” but noted it was already priced in by markets, with expectations of lower requirements running high. Reuters

Fed Poised for Third Rate Cut in 2025

The Federal Reserve is expected to deliver its third rate cut of 2025 at the December meeting, lowering the federal funds target to 3.50–3.75%. But the decision is drawing internal skepticism. Several Fed officials have publicly questioned the need for another cut, citing steady inflation readings and cautioning against acting too soon. While markets are betting on continued easing into 2026, policymakers appear split, with some emphasizing the importance of holding steady to avoid reigniting inflation. The longer-term path for rates remains highly uncertain. Yahoo Finance

New AG Watchdog Taps Chopra for Lead Role

Former CFPB Director Rohit Chopra has been appointed to lead a new Democratic-led state initiative focused on combating consumer fraud and high living costs. The Consumer Protection and Affordability Working Group, created by the Democratic Attorneys General Association, will develop policy strategies targeting abusive practices in finance, healthcare, and tech. 

With federal oversight scaling back, the initiative aims to empower state attorneys general as the primary line of defense for consumer protection. Chopra’s appointment signals a bold regulatory stance, drawing on his history of aggressive enforcement tactics and policy innovation at both the CFPB and FTC. Bloomberg