🚨 Regulators, Rate Caps & Reversals: What’s Shaking Up Financial Services Marketing This Week | Marketing's Most Wanted #4

Hi Marketing Wranglers,

Welcome to another week of financial chaos and compliance curveballs.

This week, we’re diving into the biggest shifts shaking up fintech and financial marketing—from the CFPB dropping major lawsuits to interest rate caps threatening lending models, and Bank of America scaling back DEI policies.

🚨 In This Week’s Issue

🔥 Rate Caps Are Coming: State-by-state rules are getting messier, at least for lending. How fintechs need to adjust marketing strategies now.

💥 CFPB Dropping Cases Like It’s Hot: The CFPB just dropped cases against Capital One, TransUnion, and more—what it means for fintech marketing & compliance.

🏦 Bank of America Walks Back DEI Policies: Why financial institutions are softening diversity commitments—and how it impacts brand messaging. 

🤖 The Rate Caps Are Coming! The Rate Caps Are Coming!

For years, fintechs and bank partnerships have shaken up lending, giving consumers more options beyond the old-school banking system. But now? Regulators are side-eyeing high interest rates and sneaky fees, especially in short-term loans and earned wage access products, claiming they trap borrowers in never-ending debt cycles.

Rate caps might sound great for consumers, but they could also slam the brakes on credit access, especially for subprime borrowers. Even worse for fintechs, they threaten the entire fintech-bank partnership model, forcing companies to navigate a messy state-by-state regulatory maze—or pull out of high-regulation states altogether.

With Virginia and Colorado leading the charge, fintech lenders and marketers need to brace for impact—because state regulatory scrutiny is about to get a whole lot tighter.

What’s Happening Now?

• Colorado tried to enforce local interest rate caps on out-of-state lenders, but a federal court said "not so fast." The FDIC backed off this month, signaling that loans follow the lender’s rules—not the borrower’s state laws (for now).

• Virginia is on the verge of passing one of the toughest lending laws yet, capping interest rates on earned wage access and other short-term loans. The bill, which targets fintech-bank partnerships, is now on the governor’s desk and could take effect immediately if signed. Critics, including the American FinTech Council, warn that the law lacks clarity and could drive fintech lenders out of Virginia

• A Bipartisan Push at the Federal Level: Senators Bernie Sanders (I-VT) and Josh Hawley (R-MO) introduced a bill to cap credit card interest rates at 10%, which echoes similar proposals supported by Trump in his 2024 campaign.

The Colorado Conundrum 

Colorado has been a key battleground in the fight over state-imposed rate caps.

• In 2023, Colorado attempted to enforce local interest rate caps on loans made to its residents, even if the lender was based in another state with higher permissible rates.

• A federal court ruled that loans are “made” where the lender is chartered—not where the borrower resides—effectively blocking the state’s attempt to regulate out-of-state lenders.

• In February 2024, the FDIC abruptly reversed its position, signaling that loans are governed by the lender’s home state—not the borrower’s. They had previously sided with Colorado.

This ruling sets a major precedent: states may not be able to enforce their own rate caps on loans issued by out-of-state banks, protecting fintech-bank partnerships from patchwork state lending regulations—for now.

Are Rate Caps A Big Deal?

1. Borrowers Could Lose Access to Credit

When interest rate caps are introduced, lenders often tighten eligibility requirements, cutting off access to subprime borrowers. The Illinois 36% APR cap saw loans to subprime borrowers dropped by 38%. 

A similar trend could emerge if Virginia’s law passes or if federal caps take hold, making it harder for consumers to access credit when they need it most.

2. Fintech-Bank Partnerships Face Uncertainty

Fintechs have long relied on partner banks for lending, but Virginia’s proposed law could set a precedent for tighter state regulations on third-party lending. 

If similar laws spread, fintechs may need to restructure lending models, exit high-regulation states, or raise fees elsewhere to offset interest rate caps—potentially limiting consumer access to credit.

3. Entering a State By State Marketing Era

For fintechs and financial marketers, rate caps introduce new regulatory challenges:

• 🚨Tighter ad regulations ahead. Rate caps will bring stricter rules on APR, fees, and loan terms, making clear disclosures a must.

• 💡State-by-state marketing is now essential. With lending laws splintering, what’s compliant in one state may not be in another.

• 🚨More regulatory eyes on your campaigns. FINRA, the CFPB, and state regulators are stepping up scrutiny, increasing compliance risks.

• 💡Fee changes mean new messaging risks. If lenders adjust fees to offset rate caps, marketing must be crystal clear to avoid legal trouble.

The Bottom Line

While lawmakers aim to protect consumers, interest rate caps could also limit credit availability, disrupt fintech lending models, and create new compliance burdens.

With Virginia’s bill pending final approval and Colorado’s court battle setting a new precedent, fintech lenders must be ready to navigate shifting regulations.

Read more on Pymnts. 

📌 Struggling to keep up with shifting state regulations? Warrant’s AI-powered compliance tool reviews state and federal rules by product, keeping fintechs audit-ready and risk-free.

🔥 CFPB Dropping Cases Like It Hot

The CFPB is in freefall, shedding enforcement actions left and right under acting Director Russ Vought. While headlines focus on leadership drama, the bigger story is what’s quietly being undone—and what it means for us.

CFPB Is Walking Away from Major Cases

In just a few weeks, the CFPB has dropped lawsuits against Capital One, Rocket Homes, TransUnion, Vanderbilt Mortgage, Heights Finance, and more—cases that once targeted deceptive marketing, predatory lending, and anti-competitive practices.

Some of the biggest reversals include:

• Rocket Homes: The CFPB sued in December 2024 for allegedly running an illegal kickback scheme to steer real estate agents toward its mortgage products—driving up costs and reducing consumer choice.

• TransUnion: Accused of using “dark patterns” to trick consumers into paid credit monitoring subscriptions by making “free credit report” sign-ups deceptively enroll users in recurring charges. The CFPB also alleged cancellation was intentionally difficult, with hidden buttons, misleading wording, and dead-end menus—violating a 2017 consent order that had already barred these tactics. The case was filed in April 2022—and abruptly dropped last week.

• Capital One: Allegedly misled consumers about its savings accounts (see our #2 newsletter for more information), pushing them toward similarly named lower-interest products to “cheat” them out of $2 billion in interest. Filed just days before Trump took office, this case is now gone.

• Vanderbilt Mortgage: In January 2024, the CFPB claimed Vanderbilt, which specializes in manufactured home financing, misled borrowers about loan affordability and ignored clear red flags that customers couldn’t afford their loans, leading to home losses, penalties, and delinquency fees.

• Heights Finance: The subprime lender was accused of pushing borrowers into a cycle of high-cost refinances and targeting consumers they knew would struggle to repay.

And these are just the highlights. More cases—including major ones in student lending where the Pennsylvania Higher Education Assistance Agency (PHEAA) “illegally pursued borrowers for loans they no longer owed” —have also been abandoned.

Who Is Still In Trouble?

The CFPB may be backing off most enforcement cases, but MoneyLion isn’t getting a free pass. 

The Bureau is keeping its lawsuit alive, accusing the company of violating the Military Lending Act by charging servicemembers and their families interest rates above 36% MAPR. 

The suit also claims MoneyLion forced borrowers into paid “memberships” to access “low APR” loans—then blocked them from canceling until the loan was fully repaid. 

While almost every other major case has been dropped, this one is staying put, giving the CFPB at least a technical reason to claim it's still enforcing consumer protection laws. 

Why This Matters?

Former CFPB employees are sounding the alarm, saying the administration’s goal is to gut the agency down to “five men and a phone.” 

How that skeleton crew is supposed to handle millions of consumer complaints remains very much an open question?!

Regardless of the outcome, the uncertainty will dramatically affect financial institution's marketing and compliance:

• 🚨Regulatory whiplash: What was illegal last year is suddenly not worth pursuing—but this could change under new leadership. Compliance teams shouldn’t assume these practices are “safe” now.

• 📢Who will protect consumers from misleading marketing?: With cases like Rocket Homes and TransUnion dropped, the CFPB seems to be stepping away from cracking down on misleading ads and sales tactics—for now. However, we are still waiting to see if the mantal of protecting consumers is taken up by the states or by FTC, SEC, FINRA, FDIC, and Department of Treasury. 

• 💡Consumer scrutiny remains: Just because regulators aren’t watching as closely doesn’t mean the media and watchdog groups won’t. If a marketing tactic was risky before, it still is, especially given the rise in class action lawsuits. 

Bottom Line:

For fintechs and financial marketers, less CFPB enforcement might offer short-term relief, but regulatory uncertainty is far from over. 

As leadership shifts, compliance standards can’t slip—if anything, recordkeeping is more critical than ever. Regulators will expect proof of which regulations you followed, when approvals were made, and how decisions were documented as the rules continue to evolve.

Read more on Fintech Business Weekly. 

🏦 Financial Institutions Start to Role Back DEI

We saw this one coming…

Bank of America has quietly dropped diversity hiring goals and removed a rule requiring managers to consider diverse candidates, marking a shift under the new Trump administration. The bank cited new laws, court rulings, and executive orders as reasons for the change.

They’re not alone—Citigroup scrapped its diverse candidate interview requirement, and Goldman Sachs dropped its board diversity mandate for IPOs. 

With DEI programs facing increased scrutiny, expect more financial institutions to reassess diversity policies.

📌 What this means for fintechs & marketers: Shifts in DEI policies could reshape ESG commitments, investor expectations, and corporate messaging—making transparency more critical than ever.

💬 The Rundown AI

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💀 Fed up with shifting regulations? 

Warrant automatically tracks regulatory changes for your team, and built-in recordkeeping makes it easy to review past communications and update them for compliance. Schedule a demo.