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Republican lawmakers on the House Financial Services Committee aim to rescind several Biden-era financial regulations, citing concerns over their impact on competition, innovation and consumer access to digital payments and fintech services.
A series of letters to key financial authorities outline the specific rules they want to see lifted.
Led by chairman French Hill (AR-02) and senior, right-leaning committee members, the initiative targets regulatory actions across the board, with attention given to fintech policies written up by the Consumer Financial Protection Bureau (CFPB), the Federal Reserve, the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC).
The lawmakers argue that these policies, described in one letter as “misguided efforts”, have spurred regulatory uncertainty, discouraged financial institutions from engaging in digital asset-related activities, and stifled fintech innovation.
Pushback on CFPB’s digital payments oversight
Among the most contested rules is the CFPB’s final rule on larger non-bank digital payment providers, issued in November 2024.
The rule expanded the CFPB’s supervisory authority over companies operating digital wallets, payment apps and peer-to-peer (P2P) platforms.
It would have hit companies such as Apple and Google due to their push into the payments space with mobile payment solutions.
House Republicans argue that the rule lacks a proper cost-benefit analysis.
“Committee Republicans have had serious concerns about its sweeping implications and inadequate comment periods,” the lawmakers suggest.
They also criticise the CFPB’s initial interpretation of “funds” to include digital assets, which they say overextends the agency’s authority.
“This final rule will only stifle innovation in our digital payments ecosystem and increase costs for consumers,” the lawmakers say.
In addition, the letter calls for a reversal of the CFPB’s May 2024 interpretive rule on buy now, pay later (BNPL) services.
This rule introduced new compliance requirements for the fledgling credit sector, and classified digital BNPL accounts under Regulation Z.
The committee argues that this limits consumer access to low-cost credit options and imposes burdensome compliance deadlines on providers.
“The rule proposes an expansionary interpretation of Regulation Z that puts consumers at risk of losing access to this low-cost and convenient alternative financing method,” the letter says.
The lawmakers also argue that the 60-day compliance timeline was “far too short” for BNPL providers to implement the compliance processes required by the interpretive rule, and that it disregards the Truth in Lending Act’s (TILA) applicable effective date requirement.
“The CFPB must adopt tailored, common sense rules to ensure consumers are protected while still being able to reap the benefits of BNPL products.”
The CFPB’s new registry for nonbank financial firms, requiring them to report certain enforcement actions, has also come under fire.
The lawmakers have said that this creates unnecessary compliance costs and unfairly singles out nonbank firms, putting them at a competitive disadvantage against traditional financial institutions.
Challenging Fed and FDIC oversight of digital assets
A separate letter to three top banking regulators — Federal Reserve chair Jerome Powell, FDIC acting chairman Travis Hill and OCC acting comptroller Rodney Hood — calls for the reversal of restrictions on banks engaging in digital asset activities.
Lawmakers have specifically demanded the repeal of:
- SR 22-6 (August 2022) – A Federal Reserve requirement that banks notify regulators before engaging in digital asset-related activities.
- SR 23-8 (August 2023) – A rule that imposed additional oversight on state-chartered banks dealing with stablecoins.
- FDIC’s FIL-16-2022 (April 2022) – A rule requiring FDIC-supervised banks to notify regulators before using blockchain technology.
The Republicans argue in the letter that these measures have discouraged banks from participating in the digital asset economy and have also been consequential in preventing competition in stablecoin issuance.
“The open hostility toward financial institutions seeking to engage in digital asset-related activities has fostered regulatory uncertainty, discouraging investment in new financial products and limiting competition,” the letter says.
“The strategy has reduced consumer access to innovative financial solutions that could enhance efficiency, lower costs, and expand economic opportunities for Americans.”
OCC’s shift on digital assets praise
In contrast to their critical positions elsewhere, the lawmakers welcomed the OCC’s recent shift in digital asset policy, specifically the rescission of Interpretive Letter 1179 and the issuance of Interpretive Letter 1183.
Under previous leadership, the OCC had imposed a policy of “non-objection” on national banks engaging in digital assets, making it nearly impossible for them to operate in the space.
The new interpretive letter, Republicans say, moves in the right direction by aligning with congressional efforts to provide regulatory clarity for banks involved in stablecoin issuance and other digital asset services.
