President Trump signed an executive order Tuesday (May 19) directing federal regulators to review existing regulations, guidance, supervisory practices and application processes that may be updated to encourage financial innovation and competition, while maintaining safety and soundness, according to a White House fact sheet.

The order is aimed at the regulatory plumbing behind modern financial services. It calls on federal regulators to identify rules that could be changed to support the growth of FinTech firms and federally regulated financial institutions of all sizes. It also asks the Federal Reserve to evaluate the legal and policy framework governing access to Reserve Bank payment accounts and payment services by uninsured depository institutions and nonbank financial companies.

That piece could draw close attention from payments companies. Direct or expanded access to Federal Reserve payment services has long been a major issue for nonbank FinTechs, which often rely on banks to connect to core payment rails. The White House fact sheet says the Fed should report on its legal authority to extend such access, options for expanding access with risk controls, and any legal barriers that would need legislative or regulatory changes.

The order also frames third-party risk management and legacy financial rules as areas that may need modernization as more banking, payments, brokerage, securities and custodial services move through digital channels.

“Other financial regulations, guidance, and policies are relics of a time when financial services were predominately provided in brick-and-mortar-centric settings and must be updated to reflect the modern age, the digital economy, and the benefits that technology can offer to all Americans, including lowering costs of financial services,” the White House said in the fact sheet.

PYMNTS has tracked how regulation, digital assets and payment rails are converging across financial services. Recent coverage examined how a White House crypto report said stablecoins could help keep the dollar dominant and how the GENIUS Act’s Senate passage put stablecoin regulation closer to becoming federal law. PYMNTS has also reported on how banks are navigating the digital asset boom and regulatory shift as crypto, stablecoins and payment modernization move further into mainstream finance.

 

Yotta’s model mixed savings with gamification. The company offered sweepstakes games and prizes to customers who opened savings accounts, a pitch designed to make saving money feel more engaging.

The California Department of Financial Protection and Innovation (DFPI) said Thursday (May 15) that San Francisco-based Yotta engaged in deceptive acts or practices by marketing customer accounts as safe and FDIC insured, even after moving those accounts to Synapse Brokerage, which did not protect FDIC protection. Synapse filed for bankruptcy shortly afterward, leaving many customers unable to access their funds.

The settlement points to a broader regulatory concern: Consumers often see the app, not the complex web of banks, brokerages and technology providers behind it. That structure can make deposit protection hard to understand, especially when a nonbank company markets accounts in language that sounds like traditional bank protection.

“Yotta blatantly deceived thousands of California customers,” DFPI Commissioner KC Mohseni said in the agency’s announcement, adding that the company’s actions “ultimately result[ed] in millions of dollars in lost funds.” The DFPI said Yotta must stop making deceptive claims, notify California customers with positive balances as of May 17, 2024, and provide information about possible recovery through the Consumer Financial Protection Bureau’s Civil Penalty Fund.

PYMNTS has followed the Yotta and Synapse fallout as a case study in the risks of layered FinTech banking models.

In June 2024, PYMNTS reported that 85,000 Yotta accounts were caught in the Synapse meltdown, with customers locked out amid disputes between Synapse and Evolve Bank & Trust. PYMNTS later reported on ledger irregularities tied to Yotta end-user funds, and in September covered Yotta’s lawsuit against Evolve.

The broader lesson has become harder to ignore: As FinTechs, sponsor banks and middleware providers divide responsibility, regulators are demanding clearer accountability for what customers are told and where their money actually sits.

The changes are designed to help consumers make wiser financial decisions by giving them clearer information when using credit cards, loans and overdrafts, the U.K. Treasury said in the release.

“People need to be able to make informed choices when applying for and using credit,” Rachel Blake, economic secretary to the Treasury and city minister, said in the release. “The Consumer Credit Act was written for a different era. We are creating a flexible regime fit for the digital age.”

First passed in 1974, the act has been updated over the years, although many of its central tenets have not kept up with the rise of digital financial products and services, according to the release.

The Monday announcement is the first step in moving many of the act’s requirements out of the legislation and into the Financial Conduct Authority’s rulebook, making them easier to update, per the release. Regulations will be steered by consumer testing and kept under review as products and technology evolve.

“This should mean that people using credit cards, loans, overdrafts or other borrowing products will benefit from clearer and better-timed information to help them understand their options and manage their finances with confidence,” the release said.

The changes are also designed to give companies a “more flexible framework” that lets them develop new products and use new technology to better serve their customers, according to the release.

“Rather than working around rules designed for a world before smartphones and digital banking, businesses will operate under a regime that can adapt as the financial sector continues to innovate,” the release said.

Meanwhile, in the United States, subprime consumers represent 17% of the adult population, or roughly 44 million people.

This group’s presence can be seen in the buy now, pay later (BNPL) and healthcare spaces. Subprime consumers use BNPL at higher rates than the population at large but focus this usage on specific providers.

Young subprime consumers also said they are delaying care, skipping prescriptions and borrowing from family or friends to manage healthcare costs. Tax refunds and one-time government payments perform a similar role. Subprime consumers tend to use these to manage bills, pay off debt or shore up household finances.

These bills were highlighted in the King’s Speech delivered Wednesday (May 13) by King Charles III during the State Opening of Parliament, according to a transcript posted by the U.K. government.

The State Opening of Parliament is a ceremonial event that marks the start of a new parliamentary year and outlines the government’s agenda for the session. The King’s Speech is written by the government and highlights its proposed legislation, according to the U.K. Parliament’s website.

The King’s Speech included 37 bills, according to background briefing notes posted by the Prime Minister’s Office.

Among them are the Small Business Protections (Late Payments) Bill, which King Charles III said will “tackle late payments.” The bill would impose maximum payment terms of 60 days, with limited exceptions; require interest for late payments; and introduce a time limit for raising invoice disputes, according to the briefing notes. It would apply only to U.K. to U.K. transactions.

Another bill, the Regulating for Growth Bill, will “reduce the burden of unnecessary regulation through innovation,” according to the King’s Speech. This bill would require consideration of growth in regulatory decision-making, without undermining regulator’s core objectives, and would create “sandboxing powers” that would allow rules to be relaxed so that new products and technologies can be tested in real-world settings, per the briefing notes.

A third bill, the Digital Access to Services Bill, will introduce a Digital ID that will “modernize how citizens interact with public services,” King Charles III said. The Digital ID would be optional and would be designed to enable more convenient access to public sector services and the wider economy, according to the briefing notes.

Another bill, the Cyber Security and Resilience Bill, will “improve the country’s defences against cyber-security threats,” according to the King’s Speech. This bill would expand existing cybersecurity regulations to cover many managed IT companies, data centers, energy companies and critical suppliers to essential services; require organizations to report harmful cyber incidents within 24 hours; and in cases of serious breaches, impose tougher penalties based on a company’s turnover, per the briefing notes.

After the King’s Speech, the new parliamentary session starts, and members of both the House of Lords and the House of Commons debate the content of the speech and introduce the bills. Those debates are set to begin Thursday and continue for several days, according to the U.K. Parliament’s website.

In a speech delivered at the MFA Legal & Compliance 2026 conference, Woodcock said those kinds of cases are the ones the Division was formed to fight, and they are the ones it will pursue during his tenure.

“As a matter of first principles, my goals are aligned to those of Chairman [Paul S. Atkins]: to return the enforcement program back to basics,” Woodcock said. “That means vigorously protecting investors and safeguarding markets, while also providing transparency and certainty to those we regulate.”

Woodcock shared examples of cases recently brought by the SEC and said they show the different forms of misconduct on which the Division will focus. They include offering frauds; financial reporting matters; market manipulation and insider trading; private funds abuses; cross-border fraud; and retail fraud.

Woodcock closed the speech by saying that the SEC is focused on firms or individuals that cause real investor harm, not on those that make honest mistakes that cause no investor harm.

“The Commission recognizes the difference between error and fraud, and our remedies will be calibrated accordingly,” Woodcock said. “But how the firm engages with the Division during an investigation also matters. A company that self-reports, cooperates fully and remediates will not be treated the same as one that conceals or obstructs.”

Woodcock took over leadership of the SEC’s Division of Enforcement on May 4. A veteran securities lawyer and former agency official, Woodcock most recently served as a partner at Gibson, Dunn & Crutcher in Dallas.

SEC Chairman Atkins said May 4 that the agency is investigating allegations of fraud in private credit markets, without mentioning specific cases.

Woodcock said Wednesday during his speech that the rapid expansion of private credit was driven by prior banking regulatory decisions that limited the availability of financing for small and growing businesses.

“There are stresses in some portfolios and developments playing out more broadly across this sector, and we are monitoring the situation,” Woodcock said.

As Reuters reported Wednesday (May 13), the European Commission (EC) has been seeking feedback on measures to help Google comply with the Digital Markets Act (DMA).

The EC said earlier this year it planned to take a closer look at whether Google’s artificial intelligence features were in keeping with the legislation.

“Artificial Intelligence tools are transforming the way we seek and receive online information on our smartphones and even how we interact with our devices,” Teresa Ribera, the EC’s executive vice president for clean, just and competitive transition, said at the time. “This creates new opportunities. We want to maximise the potential and the benefits of this profound technological shift by making sure the playing field is open and fair, not tilted in favour of the largest few.”

Google has said these proposed measures—which would allow rival AI services interact with Google apps to do things like send emails or order food—would go against important privacy and security protections for users in Europe.

Apple said in its submission to the EC that it has a vested interest in the case, given its own operating system for its device, underlining the larger implications for how platforms must deal with third-party AI access, the Reuters report added.

The proposed measures “raise urgent and serious concerns. If confirmed, they would create profound risks for user privacy, security, and safety as well as device integrity and performance,” Apple said in its submission, per Reuters.

“Those risks are especially acute in the context of rapidly evolving AI systems whose capabilities, behaviours, and threat vectors remain unpredictable as we are now seeing time and again,” the company added.

According to Reuters, Apple also wondered about the EC’s technical expertise and objective in what it described as “redesigning” an operating system.

“It is substituting judgments made by Google’s engineers for its own judgment based on less than three months of work,” Apple said. “It is all the more dangerous given the only value that can be discerned from the DMs guiding this work appears to be open and unfettered access.”

The CFTC filed the brief in the court battle between prediction market Kalshi and the state of Ohio, according to a Tuesday press release from the CFTC.

The filing outlines the regulatory scheme designed by Congress and details how that scheme preempts state laws as applied to markets regulated by the CFTC, according to the release.

“The federal district court in Ohio took an improperly narrow view of the Commission’s jurisdiction, and we are asking the Court of Appeals to correct that error,” CFTC Chairman Michael S. Selig said in the release. “As I’ve said repeatedly, the CFTC will not allow overzealous state governments to undermine the agency’s longstanding authority over these markets.”

The filing is the most recent step in the CFTC’s effort to protect its jurisdiction over prediction markets from state encroachments. The regulator has filed lawsuits against five states — Arizona, Connecticut, Illinois, New York and Wisconsin — and secured a preliminary injunction against state regulation of CFTC-regulated prediction markets in Arizona.

In the Arizona case, a judge granted a temporary restraining order that prevents Arizona from pursuing criminal charges against contract markets that are governed by the CFTC. The state’s attorney general had filed criminal charges against Kalshi, alleging that the company violated state laws that prohibit operating an unlicensed wagering business and that ban betting on elections.

In another case, a federal appeals court ruled for the first time that the CFTC has exclusive jurisdiction over sports-related event contracts. That decision came in a case in which Kalshi sued New Jersey after the state sent the company a cease and desist letter saying that sports-related event contracts violate its gambling laws. Kalshi argued that its event contracts can only be regulated by the CFTC.

In the CFTC’s separate lawsuits against Arizona, Connecticut and Illinois, which were filed in April, the regulator contends that the states have taken actions that intrude on the CFTC’s exclusive jurisdiction to regular prediction markets. The three states have attempted to regulate, outlaw or otherwise restrain the activities of CFTC-registered designated contract markets that facilitate trading in lawful event contracts, the CFTC said at the time in a press release.

In a speech delivered at the Special Competitive Studies Project’s AI+ Expo, Atkins said today’s software applications do not always organize themselves in ways that adhere to the regulated market functions identified in the SEC’s existing framework.

For that reason, Atkins said, the SEC should provide greater clarity by providing market participants with a clear sense of how on-chain trading systems can operate within the regulatory perimeter; considering the application of the broker and dealer definitions and the associated regulatory framework to these activities; confirming which general-purpose activities fall outside the scope of the definition of “clearing agency” when it comes to on-chain clearing and settlement; and providing clarity surrounding crypto vaults.

“As the Commission considers these policy initiatives, we should remember that on-chain market structures today are often hybrid in nature, combining elements of what are referred to as ‘traditional’ and ‘decentralized’ finance,” Atkins said. “We should clarify how the Commission views the spectrum of models that may implicate our statutes through notice and comment rulemaking, using our exemptive authorities where necessary and prudent, all with full participation from innovators, investors and the public alike.”

Atkins added that the SEC should continue to coordinate with other regulators to avoid a patchwork of regulation.

He also repeated a call he has made in the past for Congress to pass the CLARITY Act.

“Because, while I intend to future-proof our efforts through notice and comment rulemaking, there is no more powerful way to future-proof than enshrining sound statutory language in law,” Atkins said.

The CLARITY Act, which is a crypto bill that has been stalled in Congress, regained some momentum on May 1 when lawmakers reached a compromise on stablecoin yield and rewards.

The lawmakers’ compromise would adjust the legislation to restrict crypto companies from paying interest or yield to users on passive stablecoin deposits but would allow them to offer rewards tied to activity such as trading, transactions or staking.

In another recent move, the SEC and the Commodity Futures Trading Commission (CFTC) each issued guidance that they said provided greater clarity about their respective rules around crypto assets.

Speaking at the Milken Institute’s Global Conference 2026, SEC Chairman Paul S. Atkins said: “There’s been allegations of fraud, and obviously I can’t talk about any specific cases, but we are investigating that as well.”

Atkins added that it’s good that private markets exist because small and medium-sized businesses would otherwise have difficulty accessing credit. Capital rules keep banks from lending to many of these firms, he said.

“So, luckily, the private markets are there to step in and provide the capital because we do have robust private capital markets here in the United States on both the equity side and the credit side,” Atkins said. “So, our economy would not be anywhere near what it is now, especially for small and medium-sized businesses which provide most of the job creation on our economy. So, thank goodness for that.”

Atkins said the Financial Stability Oversight Council, which includes the SEC, the Treasury Department and other financial regulators, is monitoring private credit markets.

“We don’t see this as a systemic risk, at least at the current time, but we’re monitoring that and staying apprised of it,” Atkins said.

It was reported Sunday (May 3) that Federal Reserve Governor Michael Barr became the latest official warning of concerns related to private credit.

Barr told Bloomberg News that stress in the market could lead to “psychological contagion” and thus set off a wider credit crunch.

He said that although direct connections between banks and private credit do not yet seem “super worrisome,” there were other areas of concern, including the insurance industry’s ties to private lenders.

On April 28, it was reported that JPMorganChase CEO Jamie Dimon warned of the possibility of a worse-than-anticipated credit market turndown. Dimon said that was especially true for the private credit space, where the sheer number of companies means not all of them will do well if the market falls.

The Treasury Department said April 1 that it was going to meet with insurance regulators to discuss the private credit industry. The department said those meetings would kick off in May and would involve domestic and international insurance regulators.

The Bureau of the Fiscal Service published a proposed rule Tuesday (April 28) in the Federal Register, outlining amendments to 31 CFR Part 208, the regulation that governs federal payment disbursements. The rule stems from Executive Order 14247, signed by President Donald Trump in March 2025, which directed Treasury to eliminate paper checks for federal payments to the extent permitted by law.

The scale of the problem is not trivial. While 97% of the more than 1.3 billion payments Treasury disburses annually are already made electronically, the agency still printed 40.9 million checks in fiscal year 2025. The cost to print each check has climbed to $3.07—twenty times more expensive than an Automated Clearing House payment. Treasury also noted that paper checks are 16 times more likely to be reported lost, stolen, returned undeliverable or altered than electronic payments.

The proposed rule would restructure how hardship exemptions are granted. Under the current system, individuals who cannot receive electronic payments apply for waivers directly through Treasury. The new framework would shift that responsibility to the paying agencies themselves, with Treasury establishing guidelines that agencies must follow. Treasury’s rationale: agencies already have established relationships with their payees and are better positioned to assess individual circumstances.

The proposal also introduces a new waiver category for individuals and entities located on Native American land lacking the infrastructure to support electronic funds transfers—a provision added in direct response to feedback received during a 2025 Request for Information that drew 248 comments from consumer advocates, tribal governments, financial institutions and industry groups.

Several existing waiver categories would be eliminated or restructured. Notably, a legacy exemption for individuals born before May 1, 1921—which would now apply only to people over 104 years old—would be removed. Agencies seeking to issue checks for non-recurring payments to individuals or small businesses would now be required to obtain Treasury approval before doing so, a change from current rules that allow such payments without prior sign-off.

The comment period remains open through June 15.