CFPB tailspin, banks hopeful on M&A: Top news February 2025

February’s cohort of top headlines include JPMorgan Chase’s changing relationship with Zelle in the face of scam risks, federal agencies near the end of regulatory musical chairs for executive appointments, the latest in the Consumer Financial Protection Bureau’s tailspin and more. Click here to read last month’s grouping of the issues facing bankers.

JPMorgan Chase plans Zelle restrictions due to scam risk

Article by Joey Pizzolato

JPMorgan Chase is taking new steps to curb payments made to scammers on peer-to-peer payments platform Zelle.

Starting March 23, the $4 trillion-asset bank will begin asking for additional information on payments it believes originated through contact on social media platforms and could decline or block those payments, according to updates to its terms and conditions.

“Zelle is designed for sending money to others you know and trust, not for buying things on social media,” a JPMorgan Chase spokesperson told American Banker in an email, adding the bank wants to help its customers protect themselves from scams that originate on social media platforms.

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Jamie Kelter Davis/Bloomberg

PNC Financial signals it is open to bank M&A

Article by Jim Dobbs

PNC Financial Services in Pittsburgh is open to bank acquisitions.

To be sure, the $560 billion-asset bank‘s finance chief said on Feb. 11 that the company is not about to make any deal announcements, given a current dearth of potential large sellers. But if more regional banks emerge in the M&A arena, PNC won’t be caught off guard, Chief Financial Officer Robert Reilly told investors and analysts at the UBS Financial Services Conference.

“The issue with acquisitions is there are windows that appear through random variables that happen to line up,” Reilly said. Banks “are sold; they’re not bought. So, in our case, we just have to be ready if and when those windows open.”

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FDIC likely subject to EO on federal workforce reduction

Article by Ebrima Santos Sanneh

The Federal Deposit Insurance Corp. will likely need to identify staff positions and any programs within the agency not explicitly required by law as part of an executive order signed on the night of Feb. 11 by President Donald Trump aimed at making deep cuts to the federal workforce. 

Todd Baker, a senior fellow at the Richman Center for Business, Law & Public Policy at Columbia University and managing principal of Broadmoor Consulting LLC, said the order is likely to drive layoffs.

“It is clearly intended to require most agencies (including the FDIC) to assess whether any specific employee is engaged in activities ‘not mandated by statute or other law’ and ‘not typically designated as essential’ by OMB,” Baker said.

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Flagstar CEO says his bank could be ‘attractive’ M&A target

Article by Allissa Kline

Flagstar Financial, which is in turnaround mode after a $1 billion rescue last year, could be an “attractive” acquisition target, CEO Joseph Otting said on Feb. 11.

The company formerly known as New York Community Bancorp is currently focused on organic growth in order to become “a strong regional bank in America,” Otting said at an industry conference, his first such appearance since taking the helm last April.

Once the Long Island-based bank clears certain hurdles, however, it may draw the eyes of potential buyers, he said.

“Organic [growth] is always the best in my mind, and that’s really where we’re going to put the gas pedal on,” Otting said. “But I do think … we would also be viewed as a very attractive franchise once you can really focus on, ‘Hey, the credit issues are behind them, they’re growing their [commercial-and industrial loan book], their margins are back, and they’re profitable.'”

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Stefani Reynolds/Bloomberg

Treasury’s Bessent tells CFPB staff to stop everything

Article by Kate Berry

Treasury Secretary Scott Bessent, who was named acting director of the Consumer Financial Protection Bureau, has directed the agency’s staff to halt all rules and enforcement actions.

Within an hour of Bessent being formally named to lead the agency, the CFPB’s staff were instructed to halt nearly all work, according to a memo sent to staff obtained by American Banker. The memo stated that Bessent has been named acting director, effective Jan. 31, and that he “is committed to appropriately stewarding the agency pending new leadership.”

Bessent — or his as-yet unnamed advisors — has dozens of important decisions to make regarding what comes next including whether the agency plans to defend past CFPB actions and rules in court.

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CFPB’s acting director was illegally appointed: Lawsuit

Article by Allissa Kline and Kate Berry

Consumer and employee groups are seeking a temporary restraining order against Russell Vought, the acting director of the Consumer Financial Protection Bureau, saying he was illegally appointed and that his actions to dismantle the agency have usurped the role of Congress.

According to a lawsuit filed on Feb. 13, Trump appointed Vought as acting director “without the advice and consent of the Senate” and under the guise of the Federal Vacancies Reform Act, which permits temporary appointments with the Senate’s consent in cases where the previous holder of a Senate-confirmed seat dies, resigns or is otherwise unable to perform office duties. 

On Feb. 1, Trump fired the previous CFPB director, Rohit Chopra.

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Amanda Andrade-Rhoades/Photographer: Amanda Andrade-Rho

FDIC’s McKernan gets nod to lead CFPB; Gould picked for OCC

Article by Kate Berry

The White House has nominated former Federal Deposit Insurance Corp. board member Jonathan McKernan to be the director of the Consumer Financial Protection Bureau and attorney Jonathan Gould to lead the Office of the Comptroller of the Currency.

The nominations were among a list of presidential nominations sent by the White House to the Senate on the evening of Feb. 11, a copy of which was reviewed by American Banker.

Both McKernan and Gould — a partner at the law firm Jones Day and former chief counsel of the OCC in the first Trump administration — were on the short list of Trump administration picks to lead the agencies and considered allies of the banking industry. 

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Anna Moneymaker/Bloomberg

Ex-NCUA Chair Rodney Hood tapped to lead OCC

Article by Ebrima Santos Sanneh

Treasury Secretary Scott Bessent announced on Feb. 7 that he selected former National Credit Union Administration Chair Rodney Hood to lead the Office of the Comptroller of the Currency on an interim basis.

“I remain steadfastly committed to serving the American people and the banking system by creating a regulatory structure that fulfills our obligations, fosters innovation, and promotes financial inclusion,” Hood said in a release. “Including those Americans who have been debanked and underserved.”

Bessent’s announcement — issued in a press release — technically selected Hood to serve as the first deputy comptroller of the OCC. Under OCC process, the first deputy comptroller is chosen by the Treasury secretary and serves as acting comptroller of the currency in the absence of a Senate-confirmed comptroller of the currency. Acting Comptroller Michael Hsu was similarly named first deputy comptroller by Treasury Secretary Janet Yellen in 2021, allowing him to serve as acting comptroller for over three years.   

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Bankers want agency independence, but split on consolidation

Article by Ebrima Santos Sanneh

Bankers are nearly evenly divided on the wisdom of consolidating federal banking agencies, but most support agency independence, according to a survey of senior officers at community banks conducted by fintech firm IntraFi.

The firm, which operates a reciprocal deposit system ensuring FDIC coverage for deposits exceeding the $250,000 deposit insurance limit, conducted its Bank Executive Business Outlook Survey online over two weeks in January. The survey was emailed to CEOs, presidents, chief financial officers and chief operating officers. Leaders from 465 banks across the U.S. — primarily from smaller institutions — participated in the questionnaire.

Bankers remained divided on consolidating federal bank regulators, a proposal reportedly floated by Trump’s team following his reelection. Trump’s team has been eager to shrink the government and cut redundancies, including potentially merging agencies or dissolving the FDIC.

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What direction will McKernan take leading the CFPB?

Article by Kate Berry

In the span of a few weeks, the Trump administration has targeted the Consumer Financial Protection Bureau for dismantling. But former Federal Deposit Insurance Corp. Director Jonathan McKernan, who was tapped by the White House to lead the bureau, faces the challenge of putting it back together again. 

The White House nominated McKernan, who served as member of the FDIC board of directors for two years, to take over for acting CFPB Director and Office of Management and Budget Director Russell Vought upon his confirmation by the Senate, which is expected to move quickly on the nomination. 

Vought has already closed the agency for now and this week fired all probationary employees at the CFPB, part of a broader effort by the administration to reduce the federal civil service workforce. Some observers were reassured by McKernan’s nomination, citing his strong policy chops at the FDIC and in housing finance. He is seen as an institutionalist — but also a wildcard with a populist bent — who will hew closely to orders from the White House, on par with past CFPB directors. 

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