September 18 – Read the newsletter below for the latest Mortgage Banking and Consumer Finance industry news, written by Ballard Spahr attorneys. In this issue, our lawyers discuss the legal wranglings over President Trump's firing of an FTC commissioner, two recent OCC bulletins on debanking, the Fourth Circuit's reminder to employees of their obligation to engage in the ADA's interactive process, and much more.
- Podcast Episode: New Consumer Financial Services Fintech Business Opportunities Arising From Deregulation at the CFPB During Trump 2.0 – Part 1
- Podcast Episode: New Consumer Financial Services Fintech Business Opportunities Arising From Deregulation at the CFPB During Trump 2.0 – Part 2
- Chief Justice Allows Trump to Fire FTC Commissioner Slaughter—At Least for Now
- Split Appeals Court Panel Decides Trump Fired Cook From Federal Reserve Board Illegally
- Federal Appeals Court Rules That Trump Illegally Fired FTC Board Member, Orders Her Reinstatement
- Ousted Democratic NCUA Board Members Have No Protection From Firing, Trump Administration Argues
- OCC Issues Two Bulletins on How It Will Deal With Debanking
- CFPB Proposes to Standardize Nonbanks' 'Risks to Consumers'
- Fourth Circuit Reminds Employees of Their Obligation to Engage in the ADA's Interactive Process
- CFPB Releases Gold Science Standard Report
- New Jersey Expands Captive Audience Prohibition to Meetings About Unionization
- Ballard Spahr Event: Wage and Hour Update for Business
- Looking Ahead
Podcast Episode: New Consumer Financial Services Fintech Business Opportunities Arising From Deregulation at the CFPB During Trump 2.0 – Part 1
In the latest episode of our podcast, we explore the significant shifts in the regulatory landscape under the second Trump administration and how these recent deregulatory actions have opened new pathways for banks and FinTech companies by reducing barriers to entry and compliance costs. This evolving environment presents opportunities for innovation and market expansion, although state law oversight, including licensing and regulatory requirements, cloud the picture.
Today's episode is part one of a two-part series. Joining the podcast today are the following members of Ballard Spahr's Consumer Financial Services Group: Kristen Larson, of counsel, provides insights into the recently-passed GENIUS Act (which creates a federal infrastructure for Stablecoin); Ron Vaske, a partner, covers developments in crypto-backed lending and credit builder loans; John Socknat, co-leader of the Group, speaks on crypto and the mortgage industry; Dan Wilkinson, an associate, provides an overview of developments in earned wage access and rent-to-own and lease-to-own financing products; and John Culhane, a partner in the group, relays insights on income share agreements.
Part two of this webinar will be released next Thursday, September 11. In that episode, Kristen Larson, John Socknat, John Culhane, and Dan Wilkinson, return to continue the conversation, discussing open banking; home equity investment products; home equity loans; buy now, pay later; large installment loans at point of sale; payday loans; and digital wallets to access credit-like features.
Consumer Finance Monitor is hosted by Alan Kaplinsky, Senior Counsel at Ballard Spahr, and the founder and former chair of the firm's Consumer Financial Services Group for 25 years.
We encourage listeners to subscribe to the podcast on their preferred platform for weekly insights into developments in the consumer finance industry.
To listen to this episode, click here.
Consumer Financial Services Group
Podcast Episode: New Consumer Financial Services Fintech Business Opportunities Arising From Deregulation at the CFPB During Trump 2.0 – Part 2
Today's podcast episode is a continuation of a previous repurposed webinar held on August 12th, focusing on emerging opportunities in the consumer financial services sector under the Trump administration. The session aims to provide insights into the evolving regulatory landscape and its implications for businesses and consumers. The first part of the webinar, released last Thursday, September 4, covered the recently passed GENIUS Act (which creates a federal infrastructure for Stablecoin); developments in crypto-backed lending and credit builder loans; the mortgage industry; developments in earned wage access and rent-to-own and lease-to-own financing products; and insights on income share agreements.
Joining the podcast today are the following members of Ballard Spahr's Consumer Financial Services Group: Kristen Larson, of counsel, provides insights into the open banking rule; John Socknat, co-leader of the Group, speaks on home equity investment products; John Culhane, a partner in the group, relays insights on large installment loans at point of sale; and Dan Wilkinson, an associate, provides an overview of digital wallets.
Consumer Finance Monitor is hosted by Alan Kaplinsky, Senior Counsel at Ballard Spahr and the founder and former leader of the firm's Consumer Financial Services Group for 25 years.
We encourage listeners to subscribe to the podcast on their preferred platform for weekly insights into developments in the consumer finance industry.
To listen to this episode, click here.
Consumer Financial Services Group
Chief Justice Allows Trump to Fire FTC Commissioner Slaughter—At Least for Now
Chief Justice John Roberts has issued a temporary stay allowing President Trump to fire recently reinstated FTC Commissioner Rebecca Slaughter, even though she was fired without cause.
Slaughter, the lone Democrat on the Commission, had been reinstated by a divided panel of the U.S. Court of Appeals for the District of Columbia.
The administration has contended that the reinstatement would have a negative impact on it and sought the stay. In addition to the emergency order, Solicitor General D. John Sauer asked the Supreme Court to accept the case for consideration.
The reinstatement harms the Executive Branch by permitting a removed officer to continue exercising executive power despite the President's objection, Sauer wrote in his request for a stay.
"Article II precludes a court from ordering the reinstatement of an executive officer removed by the President," he wrote.
Alvaro Bedoya and Slaughter were dismissed from the FTC earlier this year. They filed suit, contending that their dismissals were illegal since the FTC is supposed to be an independent agency. They said that Trump's decision was in direct violation of federal law and Supreme Court precedent.
Bedoya resigned before he potentially could be reinstated, so Judge Loren AliKhan ruled that his claim was moot.
Slaughter and Bedoya had said that FTC members are protected by the 1935 decision of the Supreme Court in Humphrey's Executor v United States, which upheld the constitutionality of the for-cause removal standard applicable to FTC commissioners.
Judge AliKhan agreed as did two of the judges on the U.S. Court of Appeals for the District of Columbia three-judge panel.
However, the administration argued that the modern-day FTC differs significantly from the FTC that led to Humphrey's Executor and, in particular, that the FTC today exercises significant executive power.
The administration said that unlike the 1935 FTC, the current FTC has broad power to initiate judicial proceedings against private parties. In addition, Sauer wrote, Humphrey's Executor did not discuss rulemaking at all. The modern FTC also has power to investigate potential violations of the law and has foreign relations powers, according to Sauer.
However, Slaughter's attorneys said that Humphrey's Executor involves the same provision of the FTC that Slaughter is seeking to enforce. They said that the District Court found that the facts almost identically mirror those of Humphrey's Executor.
They said that in seeking the administrative stay, the Trump Administration identified no harm that would result from Slaughter's remaining on the commission. They said that in other cases in which Trump sought to fire board members and courts agreed, their continued service could result in actions that would conflict with the President's priorities.
"Here, however, Commissioner Slaughter is the sole Democratic member on a Commission with a three-Republican majority; thus, under Commission rules, 'there is no reasonable prospect that returning Ms. Slaughter to her position will result in any meaningful regulatory action opposed by the Commission majority.'"
Richard J. Andreano, Jr., John L. Culhane, Jr. & Alan S. Kaplinsky
Split Appeals Court Panel Decides Trump Fired Cook From Federal Reserve Board Illegally
A divided federal appeals court has ruled that President Trump illegally fired Lisa Cook from her position as a member of the Federal Reserve Board.
The decision, by a three-judge panel of the U.S. Court of Appeals for the District of Columbia, means that Cook may vote on whether to cut interest rates during a two-day meeting that started today.
Trump last month ordered Cook removed from the board, citing an investigation into allegations of mortgage fraud.
The Trump Administration has charged that Cook made false statements on mortgage applications for a home in Michigan and a condominium in Georgia. The applications were filed before Cook was nominated to the Board by President Biden.
Judge Jia M. Cobb of the U.S. District Court of the District of Columbia ruled that the firing was illegal, in part because the allegations involved Cook's behavior before joining the board and because she had not been given the right to answer the allegations against her.
Appeals Court Judge Bradley N. Garcia agreed.
"I agree with the district court's conclusion that Cook's due process claim is likely to succeed," he wrote for the majority.
Garcia, who was joined by Judge J. Michelle Childs, said, "Given that Cook has a property interest in her position, she is entitled to 'some kind' of process before removal."
Dissenting, Judge Gregory G. Katsas wrote, "The President plainly invoked a clause relating to Cook's conduct, ability, fitness, or competence. The allegations against Cook could constitute mortgage fraud if she acted knowingly, and that is a felony."
He wrote that even absent intentional misconduct, any misstatements in formal applications for six-figure loans are "at least concerning." He said that Trump had concluded that the allegations cast doubt on Cook's competence and trustworthiness as a financial regulator. He added that is plainly a permissible ground for dismissal.
Katsas wrote that as a principal officer of the United States, Cook serves in a position of public trust that creates no property rights.
While the Government could seek a stay from the en banc DC Court of Appeals, we believe that it is more likely that it will seek a stay from the Supreme Court by using its emergency docket. It seems unlikely that there is sufficient time for the Supreme Court to grant any stay in time for it to prevent Cook from being part of the decision of the Federal Open Market Committee tomorrow with respect to interest rates.
Consumer Financial Services Group
Federal Appeals Court Rules That Trump Illegally Fired FTC Board Member, Orders Her Reinstatement
A divided federal appeals court has ruled that President Trump illegally fired Democratic FTC member Rebecca Slaughter and has ordered that she be reinstated to her position.
"The government has no likelihood of success on appeal given controlling and directly on point Supreme Court precedent," Judges Patricia Millett and Cornelia Pillard of the U.S. Circuit Court of Appeals for the District of Columbia, said. Both are Obama appointees.
Neomi Rao, a Trump appointee, dissented.
Slaughter and Alvaro Bedoya were dismissed from the FTC by President Trump without cause. They filed suit, contending that their dismissals were illegal since the FTC is supposed to be an independent agency. They said that Trump's decision was in direct violation of federal law and Supreme Court precedent. Bedoya formally resigned from the FTC, so he no longer is involved in the case.
Judge Loren AliKhan, of the U.S. District Court for the District of Columbia agreed that Slaughter's firing was illegal and ordered her reinstated. The appeals court initially issued an administrative stay on her reinstatement. The judges have removed that administrative stay.
Slaughter is one of several Democrats Trump has ousted from boards and commissions.
In saying that Slaughter should be reinstated, the two judges repeatedly cited Humphrey's Executor v. United States, a case that involved the firing of an FTC commissioner without cause.
"Specifically, ninety years ago, a unanimous Supreme Court upheld the constitutionality of the Federal Trade Commission Act's for-cause removal protection for Federal Trade Commissioners," the judges said.
They said that since the ruling, the Supreme Court has refused five times to reconsider Humphrey's Executor.
They added, "There is a substantial public interest in having lower courts stay in their lane and leave to the Supreme Court 'the prerogative of overruling its own decisions.'"
They said that other cases have been filed challenging the firing of members of the National Labor Relations Board, the Merit Systems Protection Board and the Consumer Product Safety Commission, but added that courts have not decided whether Humphry's Executor should be extended to protect members of those groups.
In her dissent, Rao said "Federal courts likely have no equitable authority to order the reinstatement of an officer removed by the President."
She said the government suffers a harm from judicial reinstatement of an executive officer removed by the President. She added the district court erred in concluding that Slaughter had demonstrated irreparable harm.
She said that by ordering remaining FTC Commissioners and others to treat Slaughter as a member of the Commission, the district court "expressly orders them to disregard the President's directive."
And she concluded, "I have long thought that Humphrey's Executor should be overruled because it is inconsistent with the Constitution's vesting of all executive power in the President and with more recent Supreme Court decisions."
Richard J. Andreano, Jr., John L. Culhane, Jr. & Alan S. Kaplinsky
Ousted Democratic NCUA Board Members Have No Protection From Firing, Trump Administration Argues
President Trump had the right to fire two Democratic board members of the National Credit Union Administration (NCUA) because federal law affords them no protection from being ousted, the administration argued in federal court.
"Because Congress has not enacted any statutory restrictions on the President's authority to remove NCUA Board Members, they are removable at will," the administration said in a brief filed in the U.S. Court of Appeals for the District of Columbia.
Judge Amir H. Ali, of the U.S. District Court for the District of Columbia held that Harper and Otsuka could only be removed for cause and that Trump had fired them illegally.
Because no stay had been issued by the time of a July meeting, the two participated in that meeting.
After that meeting, the Appeals Court issued a stay, removing Harper and Otsuka from the board while the appeals court considers the case.
The administration contended that Judge Ali erred in adopting an "overbroad" reading of Humphrey's Executor, a 1935 case that afforded FTC commissioners protection from firing at will, arguing that the NCUA wields much more executive power than the 1935 FTC did.
Judge Ali also held that the NCUA must have absolute freedom from executive interference because it is charged with regulating financial institutions. In responding, the administration noted that the Treasury Secretary and the Comptroller of the Currency are removable at will and also have significant responsibilities overseeing financial institutions.
The administration also said that in the past, when principal officers have challenged their removal from office, they have sought legal remedies such as back pay, not reinstatement.
Finally, the administration said that if the government prevails after a review, any actions taken by the NCUA with the plaintiffs as reinstated board members will be called into question, "upsetting expectations and risking placing regulated parties in a whipsaw."
Consumer Financial Services Group
OCC Issues Two Bulletins on How It Will Deal With Debanking
The OCC has issued two bulletins clarifying how it will handle debanking at its supervised institutions.
One bulletin states that the agency will assess debanking in connection with licensing activities, including, but not limited to, charter applications, charter conversions, applications to exercise fiduciary powers, branch applications and requests for approval of business combinations, and as part of its Community Reinvestment Act reviews.
"Specifically, the OCC considers a bank's past record and current policies and procedures to avoid engaging in politicized or unlawful debanking when the agency evaluates the applicable statutory and regulatory factors for licensing activities," the OCC said, in announcing the bulletins. "Debanking considerations are also assessed in determining a bank's CRA rating."
The OCC said it will tailor its consideration of politicized or unlawful debanking in licensing applications filed by a bank and in a bank's performance under the CRA based on the size, complexity and overall risk profile of the relevant bank.
In a separate bulletin, the OCC reminded institutions of the limited circumstances that allow for the release of customer financial records and the proper use of suspicious activity reports. The OCC said it is reviewing its approaches to Bank Secrecy Act/anti-money laundering supervision to ensure that they are not contributing to debanking.
On August 7, President Trump signed an Executive Order "Guaranteeing Fair Banking for All Americans." This sweeping action prohibits financial institutions of any size from denying services to individuals or businesses based on political or religious beliefs, orientation, or lawful industry involvement.
The Executive Order directed banking agencies to adopt policies to ensure that financial institutions do not use reputational risk as a basis for restricting access to banking services.
Earlier this year, the OCC removed references to reputation risk from its handbooks and guidance documents. The agency said it also is developing a rule that will delete reputational risk references from its regulations.
"The OCC is taking steps to end the weaponization of the financial system," Comptroller of the Currency Jonathan V. Gould, said, in a statement. "We are working to root out bank activities that unlawfully debank or discriminate against customers on the basis of political or religious beliefs, or lawful business activities. If and when the OCC identifies such activity, it will take action to end it."
As part of its ongoing review to assess debanking, the OCC initially requested information from its nine largest regulated institutions. The OCC also updated its online customer complaint website to assist consumer reporting of any debanking by its regulated institutions.
For financial institutions, regulators, compliance professionals, and their customers, the debanking stakes could not be higher.
On September 24, Ballard Spahr will hold a webinar, "A New Era for Banking: What President Trump's Debanking Executive Order and Related State Laws Mean for Financial Institutions, Government, and Banking Customers."
During the webinar, we will explain why financial institutions should promptly engage counsel to conduct a privileged review of all policies, procedures and adverse actions to ensure compliance with the Executive Order.
The webinar will be held between 12:00-1:30 ET.
Register here.
CFPB Proposes to Standardize Nonbanks' 'Risks to Consumers'
The CFPB is proposing a rule that standardizes determinations that nonbanks pose "risks to consumers," a move that could result in fewer nonbanks being designated as posing risk and thus subject to CFPB supervisory jurisdiction.
The proposed rule states that "conduct that poses risks to consumers with regard to the offering or provision of consumer financial products or services" consists of conduct that:
- Presents a high likelihood of significant harm to consumers; and
- Is directly connected to the offering of a consumer financial product or service as defined by the CFPA.
This proposal follows on the heels of a May proposal by the Bureau to rescind certain Biden-era amendments to the procedures for supervisory designation proceedings.
Those amendments were widely viewed by industry as enabling the CFPB to pressure a company to consent to supervisory jurisdiction in order to avoid the CFPB making public its conclusion, in a contested determination, that the company did pose a risk to consumers.
In referring to the most recent proposal, the Bureau said, "This will ensure that the Bureau acts within the bounds of its statutory authority and provide clarity to institutions about the standard the Bureau applies."
Until now, the bureau has considered the risks posed by nonbanks on a case-by-case basis—a practice that the Trump Administration's CFPB is criticizing.
"The Bureau has not, to date, issued a rule addressing the meaning of "risks to consumers" in the context of section 1024(a)(1)(C) (The Consumer Financial Protection Act of 2010)," the CFPB said, in proposing the rule. "Instead, the Bureau has issued orders in individual cases."
That section of the law authorizes the CFPB to supervise a nonbank covered person that the Bureau has a "reasonable cause" to determine, by order and after proper notice, is engaging or has engaged in conduct that poses risk to consumers with regard to the offering or provision of consumer financial products or services.
However, it provides little guidance to providers of consumer financial services about such determinations.
It does state that the CFPB can base such determinations on consumer complaints or on information it obtains from other sources. It also states that such determinations should be based on the assessment of the risks in the relevant product markets and geographic markets.
In addition, it allows the CFPB to consider a company's size, transaction volume, the inherent risk of the product or service at issue, the extent to which the company is subject to state oversight for consumer protection, and any other factors the CFPB deems relevant.
But it does not define "risks to consumers" in this context.
Noting that to date there have been less than 20 companies designated as posing risk to consumers, out of an estimated population of 154,430 entities in covered industries, the CFPB said that it has three concerns regarding the current process of designating a nonbank a risk to consumers on a case-by-case basis.
First, the agency said, the ad hoc nature of individual orders creates a danger that the application of "risks to consumers" might be inconsistent.
Second, because precedents in past orders can be unclear and because the Bureau might depart from existing precedents, institutions may be uncertain what standard the CFPB might apply in their case.
Third, without a binding framework, on the meaning of "risks to consumers," the Bureau might not conform to the best reading of the law in individual cases.
The Bureau states that Congress would not have expected it to spend resources on issues that are speculative. "Section 1024(a)(1)(C) indicates that Congress intended the Bureau to be squarely focused on serious conduct," the CFPB said.
Under the proposed rule, firms would have more clarity as to what conduct might trigger supervision, potentially lowering compliance review costs, according to the Bureau.
Comments on the rule are due by September 25.
Although it has not yet submitted a comment letter, America's Credit Unions, the trade group representing those institutions, criticized the proposal. "America's Credit Unions supports strong, even-handed consumer protection across the marketplace, and as drafted, the proposal could create a carveout for nonbank actors whose practices can harm consumers and disadvantage supervised credit unions," the group said.
However, we support the Bureau's approach in the proposal. Moreover, numerous provisions of the Consumer Financial Protection Act direct the CFPB to identify, detect, or monitor "risks to consumers." These phrases appear, for example, in Section 1021(c)(3) (specifying that identifying risks to consumers from market functioning is one of the primary functions of the Bureau), in Section 1022(c)(1) (directing the Bureau to monitor risks to consumers to support its rulemaking and other functions), in Section 1024(b)(1) (generally directing the Bureau to require reports and conduct examinations to detect and assess risks to consumers), in Section 1025(b)(1)(C) (giving the Bureau the exclusive authority to require reports and conduct examinations of larger financial institutions to detect and assess risks to consumers) and in Section 1026(b) (giving the Bureau the authority to require reports from other financial institutions to assess and detect risks to consumers). Accordingly, we would urge the Bureau to apply the same standard across the board.
Richard J. Andreano, Jr., Joseph J. Schuster, Alan S. Kaplinsky & John L. Culhane, Jr.
Fourth Circuit Reminds Employees of Their Obligation to Engage in the ADA's Interactive Process
The Fourth Circuit recently reminded employees of their shared obligation to participate in the interactive process with their employer when requesting a reasonable accommodation under the Americans with Disabilities Act ("ADA"). The case, Tarquinio v. Johns Hopkins University Applied Physics Lab, No. 24-1432 (4th Cir. 2025), makes clear that employees must provide their employers with requested documentation and information where the connection between their disability and its limitations on their work is not obvious.
The Facts
In September 2021, the Johns Hopkins University's Applied Physics Laboratory ("the Lab") implemented a mandatory COVID-19 vaccination policy for employees. Employees were required to either be vaccinated or receive a medical or religious exemption.
The plaintiff, Sally Tarquinio, a systems engineer at the Lab, sought a medical exemption from the vaccine requirement, stating that she suffered from chronic Lyme disease and its lingering effects.
The plaintiff submitted a nine-year-old blood test and a form from her health care provider that cited Lyme disease as the basis for the exemption. However, because Lyme disease was not a medical contraindication to vaccination, the Lab asked her for more recent medical documentation and permission to contact her health care provider. The plaintiff declined, instead offering her own narratives, outdated articles, and a proposal for weekly testing and partial remote work. Without current documentation or authorization to verify her condition, the Lab denied her request as "insufficiently supported" and terminated her employment. The plaintiff sued under the ADA, alleging that the Lab did not accommodate her disability, fired her because of her disability, and subjected her to an unlawful medical examination.
The Holding
On appeal, the Fourth Circuit affirmed the district court's grant of summary judgment for the Lab, holding that the plaintiff prevented the employer from understanding the limitations of her disability, and therefore, the Lab's duty to accommodate never arose. In particular, the court said that the plaintiff disclosed her disability to the Lab, but did not explain, "beyond opaque references" why her disability prevented her from getting vaccinated, and the Lab had the right to ask for more objective evidence. The court found that the plaintiff prevented her employer from learning why her condition required the accommodations she requested, despite "ample opportunities." As a result, she could not establish that her employer had a duty to accommodate her.
Key Takeaways for Employers
The Fourth Circuit's decision in Tarquinio offers several practical reminders for employers navigating ADA accommodation requests:
- The interactive process gives "employers and employees a chance to work together to figure out what accommodation, if any, would be reasonable and not unduly burdensome."
- Where a disability and its limitations are not obvious, employers have the right to confirm whether employees have a genuine need for an accommodation, and need not simply take the employee's word for it.
- Sometimes, the connection between disability, limitation, and need for accommodation is obvious (e.g., a blind employee would not have to furnish medical records to establish the need for an accommodation to be able to review written reports). Once an employer knows that an employee has a disability that causes limitations that interfere with work, the employer must try to reasonably accommodate those limitations.
Brian D. Pedrow, Rebecca A. Leaf, Justen R. Barbierri & Ryan B. Ricketts
CFPB Releases Gold Science Standard Report
The CFPB recently released a Report on Actions Taken to Implement Gold Standard Science that addresses steps the CFPB has taken and plans to take to implement the May 2025 Executive Order entitled "Restoring Gold Standard Science" (GSS) and subsequent guidance issued to federal agencies.
In the introductory portions of the Report, the CFPB advises as follows:
"Until the CFPB adopts formal policies and procedures governing the production and use of scientific information, CFPB staff are developing policies and procedures to help ensure that the scientific information produced and used by the CFPB, to the extent practicable, meets all GSS requirements. CFPB staff are also developing formal policies and procedures to ensure that the CFPB meets all GSS requirements as adapted to meet our unique mission, including encouraging the open exchange of ideas, consideration of different or dissenting viewpoints, and protection of CFPB employees from efforts that may deter consideration of alternative scientific opinions."
The CFPB advises that it has convened a cross-Bureau working group to develop the implementation plan and the Report, and that the working group will develop and enhance formal policies and procedures in consultation with management and leadership across the CFPB. The working group also will propose to the CFPB Director/Acting Director for approval policies that govern the production and use of scientific information. Overall, the report is at a high level, and details will presumably emerge as formal policies and procedures are developed.
The CFPB also advises that most CFPB research is generally descriptive, inferential, or both. According to the CFPB, (1) descriptive research generally aims to describe a population, product, or phenomenon of interest, often without a theoretical framework, and it provides as an example ascertaining what percentage of the population has experience using a financial product, and (2) inferential research generally applies theories and/or specific subject matter expertise to test specific hypotheses, and it provides as an example conducting hypothesis or model testing to determine whether two groups differ significantly on a key characteristic, or whether an intervention had a causal effect on an outcome of interest.
With regard to GSS, the CFPB explains that it refers to science conducted in a manner that abides by nine key tenets. The Report individually addresses each of the nine tenets, and notes that some of the standards described in the tenets cannot apply to both descriptive and inferential research. The CFPB advises that it expects staff to apply the tenet standards as appropriate to the type of scientific research being conducted.
The nine tenets are as follows:
- Reproducible: "To advance reproducible and replicable science, CFPB staff are developing policies and procedures to prioritize disciplined scientific methods and experimental designs, as appropriate."
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- The CFPB advises that it is developing policies to build upon existing practices to encourage the depositing of well-documented code into publicly accessible repositories, such as GitHub, and assessing whether more data can be made public and shared through the Public Data Inventory page of the CFPB's website.
- Transparent: "The CFPB recognizes that transparency in scientific research entails the open, accessible, and comprehensive sharing of all components of the research process—experimental protocols, methodologies, data, analytical tools, and findings—to enable stringent scrutiny, validation, and reuse by the scientific community and the public."
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- The CFPB advises that it is developing policies and procedures to ensure that the CFPB's scientific research adheres to this tenet while also recognizing that some research would not be made public as noted in the Executive Order.
- Communicative of Error and Uncertainty: "The CFPB is formalizing and enhancing policies and procedures to ensure that communication of scientific information adheres to established best practices for communicating error and uncertainty in research processes and results."
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- The CFPB advises that these best practices can include communicating statistical and quantitative uncertainty and variability by, for example, reporting confidence intervals and/or standard errors. The CFPB also states that "effective and comprehensive uncertainty quantification entails communicating both inferential uncertainty (for example, the degree of noise or variability around statistical estimates) and outcome variability (for example, the distribution of outcomes on the measure of interest across and within participant subgroups)."
- Collaborative and Interdisciplinary: "CFPB research generally reflects a wide range of stakeholder expertise, methodologies, professional backgrounds, and voices supported by several cross-Bureau working groups and the CFPB's clearance process for external communications."
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- The CFPB advises that it includes people with different training and experience, which fosters interdisciplinary collaboration, and that it also collaborates with and obtains information from people and organizations outside the CFPB, including directly from consumers, other federal agencies, private sector firms, and non-profit organizations.
- Skeptical of its Findings and Assumptions: "The CFPB is developing policies and procedures to promote a culture of constructive skepticism in the scientific research process, building upon current best practices. Effective skepticism requires researchers to employ robust validation methods, including the methods discussed in earlier tenets."
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- The CFPB advises that it expects that policies and procedures will build upon the practice of having CFPB researchers present their early-stage work both internally and externally to diverse audiences to receive critical feedback, including at research conferences.
- Structured for Falsifiability of Hypotheses: "The CFPB is developing policies and procedures to prioritize falsifiable research, primarily, by encouraging researchers to specify their hypotheses in research proposals and published projects, as appropriate. These hypotheses must be testable with the data and methods proposed."
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- The CFPB advises that when it hosts future research conferences or research seminars, CFPB staff expect to recommend to organizers that they prioritize accepting papers that report open and transparent results (e.g., preregistered analyses; a full range of analyses including null or inconclusive results; heterogeneity and robustness analyses) and follow best practices for testing hypotheses.
- Subject to Unbiased Peer Review: "The CFPB does not participate in traditional peer-reviewed grant-making. However, aspects of standards from peer-reviewed grantmaking and publication processes can be incorporated at both the proposal and publication stages."
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- The CFPB advises that CFPB staff are assessing the current processes for the review of CFPB research, which can include review by subject matter experts, those in the management chain, and where appropriate and available, by external experts through approved channels and policies.
- Accepting of Negative Results as Positive Outcomes: "The CFPB recognizes the importance of negative or null results as contributions to scientific knowledge and is developing formal policies and procedures that will promote the submission and dissemination of these research results."
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- The CFPB advises that CFPB staff will formalize and enhance policies and procedures to ensure that research designs at the CFPB include consideration of how results can be interpreted if they produce a null or negative result. The CFPB also advises that it expects to adopt policies that will encourage staff to present negative or null research results during internal and external presentations of their early-stage work to diverse audiences to receive critical feedback.
- Without Conflicts of Interest: "To ensure that research is conducted without conflicts of interest, the CFPB will review its current policies and procedures to ensure that policies require that all researchers, reviewers, and agency officials involved in the funding or performance of federal research will disclose in a comprehensive and standardized manner all financial, personal, or institutional interests in research proposals, publications, peer and merit reviews, and data repositories."
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- The CFPB advises that applicable employees (1) who have not already been doing so will be required to file financial disclosure reports electronically with the CFPB Ethics Office as part of the CFPB's financial disclosure program, and (2) will continue to comply with the CFPB Ethics Regulations requirement that they disclose and obtain written approval from their supervisor and concurrence from the CFPB Ethics Office prior to engaging in any outside employment or activities.
The Report does not expressly address a research issue of particular importance to the consumer financial services industry—CFPB cost/benefit analyses of proposed regulatory efforts. In general, the industry typically views such analyses as significantly underestimating the costs and related burdens of compliance with regulatory measures. Query whether the GSS efforts will lead to cost/benefit analyses that the industry views as being more realistic, which may help inform CFPB staff as to the relative merits of measures under consideration.
It also would have been interesting to learn of the impact of GSS efforts on data analysis in fair lending matters. However, as previously reported, President Trump issued an Executive Order in April 2025 that provides "[i]t is the policy of the United States to eliminate the use of disparate-impact liability in all contexts to the maximum degree possible to avoid violating the Constitution, Federal civil rights laws, and basic American ideals." Thus, data analysis by the CFPB in the fair lender context will likely be limited, if used at all.
Richard J. Andreano, Jr. & John L. Culhane, Jr.
New Jersey Expands Captive Audience Prohibition to Meetings About Unionization
On September 3, 2025, New Jersey Governor Phil Murphy signed legislation prohibiting employers from mandating employee participation in communications about the decision to join or support a labor organization or association. The measure expands New Jersey's existing restrictions on these "captive audience" meetings related to political and religious matters and joins several other states, including California, New York, Illinois, and Washington, that ban employers from requiring attendance at meetings about religious, political, or labor organization issues. New Jersey's law does not prohibit employers from conducting union avoidance meetings so long as such meetings are voluntary and employees are informed that they may refuse to attend a meeting without penalty.
New Jersey's prohibition is consistent with the Biden-era National Labor Relations Board decision in Amazon.com Services LLC, 373 NLRB No. 136 (Nov. 13, 2024), holding that employers may not require employees to attend meetings during work hours to listen to their employer's views about unions, unless certain safe harbor requirements are met. Until the Amazon decision, the National Labor Relations Act (NLRA) had been interpreted to permit mandatory captive audience meetings concerning the employer's position on unionization.
The Board has lacked a quorum since January 2025, but, if recent senate nominations are confirmed, we expect to see reversals of many Biden-era union-friendly NLRB decisions including Amazon.com Services LLC.
And, we may see legal challenges to New Jersey's newly expanded prohibitions, as the captive audience laws of several other states have faced legal challenges, including claims that these laws are pre-empted by the National Labor Relations Act.
Ballard Spahr's Labor & Employment Group routinely assists employers in ensuring compliance with other state, federal, and local statutes and regulations and regularly assists clients in updating their policies and practices to be compliant with recent developments.
Denise M. Keyser & Karli Lubin Talmo
Ballard Spahr Event: Wage and Hour Update for Business
Arizona employers are being sued by individuals and groups of employees for alleged overtime and wage and hour violations. Please join us to learn how to protect your company from these expensive lawsuits, and prepare for government investigations.
This seminar will update attendees on:
- The marked increase of litigation over wage and hour issues and how your company can avoid being sued
- How employers can efficiently review their classifications of employees as exempt or nonexempt from overtime
- Address recordkeeping requirements for overtime and hours worked
- How to effectively track hours for remote and hybrid worker
- Avoiding and responding to state and federal investigations and considering self-reporting programs
Thursday, October 30, 2025
7:30 AM – 9:00 AM
Arizona Biltmore Golf Club
2400 Biltmore Estates Drive
Phoenix, AZ 85016
Program Details
7:30 AM – 8:00 AM | Registration and Breakfast
8:00 AM – 9:00 AM | Program
CLE Credit: This program is approved for 1.0 CLE credits in CA, NJ, NY, and PA. 1.0 HRCI and SHRM credits are pending. The State Bar of AZ does not approve or accredit CLE activities for the MCLE requirement. This activity may qualify for up to 1.0 hours toward your annual CLE requirement for State Bar of AZ. Uniform Certificates of Attendance will be provided for the purpose of seeking CLE credit in other jurisdictions.
For more information, contact Meg Connolly at connollymr@ballardspahr.com.
Jay Zweig and Melissa Costello
Looking Ahead
A Ballard Spahr Webinar | September 24, 2025, 12 PM ET
Speakers: Alan S. Kaplinsky
MBA – Compliance and Risk Management Conference
September 28-30, 2025 | Grand Hyatt, Washington, D.C.
COMPLIANCE CONVERSATIONS TRACK: Loan Originator Compensation
September 28, 2025 – 2:15 PM ET
Speaker: Richard J. Andreano, Jr.
CaMBA – Legal Issues and Regulatory Compliance Conference
December 8-9, 2025 | Irvine Marriott Hotel, Irvine, CA
Employment Law Updates – how to protect yourself
December 9, 2025 – 11:00 AM PT
Speaker: Richard J. Andreano, Jr.
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