In this insightful podcast episode, listeners are treated to an engaging discussion between John Culhane and Mike Kilgarriff, both esteemed partners at Ballard Spahr’s Consumer Financial Services group. The conversation delves into the anticipated changes in supervision and enforcement strategies following the appointment of a new acting director by President Trump. This segment is adapted from the latter part of a webinar initially presented on January 6. Previously, on January 23, the first half of the webinar was released, featuring Alan Kaplinsky’s candid interview with Kathy Kraninger, the former Director of the CFPB during the initial Trump administration. The dialogue explores key questions regarding the future direction of the CFPB under the new leadership.

The transition to Trump's second term brings significant speculation about the Bureau's approach to consumer financial services. One of the central topics revolves around whether the new administration will maintain the status quo or adopt a more lenient stance. Industry experts ponder if there will be a renewed emphasis on strict adherence to federal consumer finance laws, potentially shifting focus away from Unfair, Deceptive, or Abusive Acts or Practices (UDAAP). Additionally, discussions include the possibility of staffing reductions and fewer examinations, as well as changes in reporting methods, such as a decrease in Public Action Alert Reports (PAAR) and an increase in Management Risk Assessment Statements (MRAS) and Management Risk Information Assessments (MRIAs).

On the enforcement front, the conversation also examines the likelihood of a thorough review of ongoing investigations and lawsuits. There is considerable debate over whether cases involving regulatory overreach or pushing legal boundaries might be dismissed. Another critical issue discussed is the potential shift in focus towards combating fraud and scams rather than UDAAP violations. Moreover, the panelists explore the legality of the CFPB's funding mechanisms, questioning whether the bureau has been operating unlawfully since September 2022 due to the Federal Reserve Banks' lack of combined earnings.

Hosted by Alan Kaplinsky, Senior Counsel and former chair of the Consumer Financial Services Group for 25 years, the discussion provides valuable insights into the evolving landscape of consumer financial services regulation. As the new leadership takes shape, stakeholders eagerly await concrete actions that will define the future of the CFPB. The podcast offers a forward-looking perspective, highlighting potential shifts in policy and enforcement priorities that could significantly impact the industry.