The Roundup: Treasury Secretary Wants Regulators Focused on Risk, the Evolving Role of Compliance, and an Increase in Deceptive Marketing
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: Treasury secretary wants financial regulators focused on risk, FDIC further delays FDIC compliance sign date for ATMs and digital channels, regulatory scrutiny of BaaS just getting started, fintech’s next big challenge is thriving in an era of regulatory uncertainty, the evolving role of compliance in consumer finance’s deregulatory shift, and the rise of misleading marketing.
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Treasury Secretary Scott Bessent Wants Financial Regulators Focused on Risk
Treasury Secretary Scott Bessent emphasized the need for financial regulators to focus on material financial risks and improve coordination under the Treasury’s guidance. Addressing the Economic Club of New York, Bessent acknowledged concerns about the opacity and restrictiveness of current bank supervision, particularly affecting smaller institutions. He plans to utilize bodies like the Financial Stability Oversight Council to harmonize regulatory activities, aiming for regulators to work in parallel with each other and the industry.
FDIC Further Delays FDIC Sign Compliance Date for ATMs and Digital Channels
The Federal Deposit Insurance Corporation (FDIC) has announced a further delay in the compliance date for certain provisions of its Sign and Advertising Rule. Specifically, the requirements for insured depository institutions (IDIs) to display the FDIC’s official digital sign on their digital channels and automated teller machines (ATMs) have been postponed from May 1, 2025, to March 1, 2026. This extension aims to address ongoing implementation concerns and potential consumer confusion. The FDIC plans to use the additional time to propose adjustments to the regulation, while other provisions of the rule will still take effect on May 1, 2025.
Significant Stat: 74%: A recent study reveals that 74% of organizations continue to use manual or semi-automated marketing compliance workflows despite facing challenges with oversight and resource constraints. Read more
Pathward CEO: Regulatory Scrutiny of BaaS ‘Just Getting Started’
Pathward CEO Brett Pharr expects that regulatory scrutiny of the banking-as-a-service (BaaS) sector is intensifying and will persist, leading to a contraction in the number of participating banks. He highlights that while the initial regulatory focus has been on areas like ledgers and anti-money laundering, future examinations will dig deeper into third-party relationships and compliance issues, such as those related to Regulations Z and E.
Pharr emphasizes the necessity for banks to maintain direct agreements with customers to ensure proper oversight and compliance. He anticipates that some banks, particularly those unprepared for stringent compliance demands, may exit the BaaS space, while others may choose to invest heavily to meet these challenges.
Fintech’s Next Big Challenge? Thriving in an Era of Regulatory Uncertainty
Fintech companies are grappling with increasing regulatory uncertainty, with over 60% identifying it as their top challenge, according to a Deloitte survey. The evolving regulatory landscape, particularly in the U.S., presents hurdles for companies looking to expand and comply with shifting rules.
To navigate this uncertainty, fintechs must proactively engage with regulators, invest in strong compliance programs, and adopt flexible business models that can adapt to rapid regulatory changes. The key takeaway is that while regulatory ambiguity poses significant challenges, companies that prioritize compliance and regulatory collaboration will be better positioned for long-term success.
Consumer Finance’s Deregulatory Shift—The Evolving Role of Compliance
As federal regulations ease, compliance is no longer just about risk management—it’s becoming a strategic driver of growth in consumer financial services. With fewer regulatory hurdles, companies can expand more freely, but success still depends on smart compliance strategies that navigate state laws and litigation risks. Rather than being a barrier, compliance teams now play a key role in enabling innovation and sustainable business growth in this evolving landscape.
The Rise of Misleading Marketing: Why Organizations Must Prioritize Compliance, Even in a Deregulatory Era
Despite a trend toward deregulation at the federal level, consumer complaints about misleading marketing and advertising have surged, tripling since 2021, with an average annual increase of 48%. In the United Kingdom, the Financial Conduct Authority intervened in nearly 20,000 financial promotions in 2024, almost double the number from the previous year. These trends emphasize that, even amidst deregulatory shifts, organizations must remain vigilant in their compliance efforts to protect consumers, uphold brand integrity, and maintain trust.
