This week in Washington brought a mix of cautious progress and deepening uncertainty for the financial sector, as federal regulators and lawmakers returned to work and the Trump administration introduced sweeping changes that could reshape the landscape for community lending.
At the center of renewed attention is the Consumer Financial Protection Bureau (CFPB), which began resuming normal operations after a period of inactivity. Staff from the agency’s consumer response division returned to address a backlog of 16,000 unresolved complaints, and its Fair Lending Office has resumed work on its annual report to Congress. Even the agency’s website, which had displayed a "404 error" following administrative turnover, is once again operational.
The moves signal a shift, but questions remain about the agency’s future direction. While many view the restoration of operations as a positive development, key uncertainties linger — particularly around enforcement and rulemaking. Until a new CFPB director is confirmed by the Senate, the regulatory stance of the agency could shift dramatically. Industry observers, including former Treasury official Amias Gerety, caution that FinTechs and financial institutions should continue to prioritize compliance, regardless of temporary regulatory softness. “It might get easier on compliance, but harder on risk,” Gerety warned, urging firms to act in good faith and continue following established rules.
The anticipated confirmation of nominee Jonathan McKernan is expected to bring more clarity. Gerety expressed optimism about the confirmation process, noting that McKernan has emphasized adherence to the law and could bring much-needed stability to the CFPB’s uncertain regulatory climate.
While the CFPB sees signs of recovery, another key financial initiative took a major hit. On March 14, the president signed an executive order targeting the Community Development Financial Institutions (CDFI) Fund for elimination. The order directs the Treasury to reduce the fund’s activities and staff to the legal minimum, calling it “unnecessary” despite three decades of bipartisan support.
The CDFI Fund, established in 1994, plays a crucial role in supporting underserved communities through grants, tax credits, and loans. In 2024 alone, it facilitated $24 billion in funding for over 100,000 small businesses and 45,000 affordable housing units. It also supports nearly 500 credit unions certified as CDFIs, which collectively serve millions in economically distressed areas. The order now places those institutions in a precarious position, threatening funding streams critical to their mission.
Gerety voiced strong opposition to the move, calling the CDFI Fund “super transparent” and “easy to track,” with a clear record of success. He emphasized the fund’s value in addressing financial inequities by supporting community-based lenders that serve low-income and minority borrowers.
Beyond regulation and funding, market sentiment remains shaky. Although recent developments like Klarna’s IPO filing offered a bright spot for the FinTech sector, Gerety described Washington’s overall economic mood as hesitant. With ongoing ambiguity around tariffs, trade, and financial policy, he warned that businesses are in wait-and-see mode — a posture that can stifle economic momentum.
“Sometimes the best decision in uncertain times is to pause,” he said. “But for the economy, a pause is deadly.”
As the dust settles from this week’s policy developments, one thing is clear: the path forward for financial regulation, community lending, and fintech innovation remains deeply intertwined with the decisions emerging from Washington.