New Banking Regulations: What Does That Mean for Your Money?

New banking rules promise easier credit but fewer protections.

Published: 10/30/2025, 9:55:22 AM EDT

New Banking Regulations: What Does That Mean for Your Money? — （Frame Stock Footage/Shutterstock）

The Biden administration proposed strict rules for the banking industry. It wanted to increase capital requirements for banks. The Trump administration has taken a different route. It aims to maintain or reduce capital requirements. It has also looked to eliminate “debanking,” which is the act of terminating or denying banking and financial services to an individual or business.

But what does this mean to you? Debanking was a significant problem during the Biden administration. Meanwhile, banks were concerned about proposed capital increases. Both issues affect Americans.

CFPB Overdraft Rule Repealed

The Consumer Financial Protection Bureau (CFPB) finalized a rule in December 2024 that would have capped overdraft fees at either $5 or an alternative price at the institution’s costs.

This rule would have taken effect in October 2025. But Congress overturned the rule using fast-track procedures of the Congressional Review Act. President Donald Trump signed it into law.

When the CFPB finalized the rule, it characterized it as eliminating “junk fees.” It said that the rule would have added up to $5 billion in annual overdraft fee savings to consumers.

But roughly 9 percent of accounts comprise 79 percent of overdraft and insufficient funds fees. These consumers overdraft more than 10 times per year. Most account holders don’t have this issue.

Elimination of the CFPB

The CFPB was established in the wake of the financial crisis of 2008–09. It was created by the Dodd-Frank Wall Street Reform and Consumer Protection Act, often referred to as the Dodd-Frank Act. It was signed into law by President Barack Obama in July 2010.

It was meant to consolidate consumer financial protection authorities that had existed across seven different federal agencies, according to the CFPB.

But Russell Vought, director of the Office of Management and Budget, said the CFPB is hurting small lenders.

“All they want to do is weaponize the tools of financial laws against basically small mom-and-pop lenders and other small financial institutions,” he said.

Trump and senior administration officials have accused CFPB of politicizing enforcement and exceeding legal authorities. They are trying to eliminate it and have sharply scaled it back.

But what would be the effect on consumers? According to a paper from global law firm Holland & Knight, the result would be easier access and possibly fewer regulations regarding credit and loans. But with that comes the risk of predatory or hidden fees.

There will be more options and fewer restrictions on buy-now-pay-later plans as well as financial technology (fintech) apps. But that comes with less transparency.

The overall market would experience increased industry growth in the short term, but there are fears of more systemic risk.

Another complaint against the CFPB was a lack of oversight when it came to debanking.

Debanking Affected Thousands of Consumers

Between 2022 and 2024, 8,056 consumers filed complaints with the CFPB, according to the U.S. Committee on Banking, Housing, and Urban Affairs. The CFPB suggested that complaints filed by consumers only represented a small fraction of the total population of Americans. So, this could equal millions of people who were subject to debanking.

The four largest banks accused of debanking include JPMorgan Chase, Wells Fargo, Bank of America, and Citigroup.

Consumer complaints against these banks constituted more than half of the total debanking-related complaints.

Many Americans had their accounts closed without a reason provided by the bank. They were also not given their money in a timely manner.

Trump Administration Guaranteed Fair Banking

According to a White House press release, on Aug. 7, Trump signed an executive order ensuring federal regulators don’t promote polices and practices that allow financial institutions to deny or restrict service based on the following: political beliefs, religious beliefs, and lawful business activities.

This order ensures fair access to banking for Americans.

The order instructed the Small Business Administration (SBA) to require all financial institutions under its jurisdiction to make reasonable efforts to reinstate clients and potential clients who were denied services due to unlawful debanking.

Reduced Capital Requirements Drive Investment

With Trump revamping bank rules, lenders expect their capital requirements to fall. They had faced a 19 percent hike under the Biden administration.

In banking, capital is the money that a bank is required to keep as a cushion against losses. It’s like a safety net.

By requiring less capital, it frees up more money to lend or invest, which helps the economy and boosts profits for banks.

Banks like JPMorgan Chase, Bank of America, and Citigroup combined hold $1 trillion in capital. Even a slight dip could free billions of dollars for lending, trading dividends, and share buybacks.

Easier Credit and Loans for Consumers

Although the CFPB’s reduced oversight may lead to less protection, consumers still have rights under federal and state laws.

Overdraft fees may not be reduced, but there are options for those who are frequently charged for them. Consumers may manage their finances better or switch to financial institutions with lower or no fees.

In the past four years, debanking was an issue for thousands, even millions, of Americans. New regulations will protect individuals with certain political or religious beliefs from being denied banking services.

And, finally, with capital requirements staying the same or decreasing, funds can be freed up for investments.

The views and opinions expressed are those of the authors. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. NTD does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. NTD holds no liability for the accuracy or timeliness of the information provided.

From The Epoch Times