This rule—commonly referred to as Small Business Lending Under the Equal Opportunity Act or Section 1071 of the Consumer Financial Protection Act—was originally issued during the Biden administration and requires banks, small business lenders, and other financial institutions to report data on their small-business loans, including applicant demographics, pricing, and approval rates.

In a court filing responding to a challenge brought by a merchant cash advance group, the CFPB indicated its intent to reissue the rule, citing the agency’s new leadership as a basis for its decision.

“New leadership has been assessing the Final Rule and the issues that this case presents to determine the CFPB’s position. CFPB’s new leadership has directed staff to initiate a new Section 1071 rulemaking,” according to the agency’s filing. “The CFPB anticipates issuing a Notice of Proposed Rulemaking as expeditiously as reasonably possible.”

The start of the Trump administration brought a change in the CFPB’s leadership. New leadership arrived at the CFPB on January 31, 2025, when Scott Bessent was named Acting Director of the CFPB, and again on February 7, when Russell Vought replaced Scott Bessent as Acting Director.

Under the Biden administration, the rule faced many legal challenges claiming that it was too burdensome and invasive. While many were against the rule, many supported it on the basis that it reinforced fair lending enforcement.

Although the CFPB previously prioritized defending the rule against legal challenges during the Biden administration, its recent filing indicates a shift in approach, suggesting it will no longer defend the original rule and instead modify and reissue it.

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The original lawsuit alleged that multiple Whole Food managers regularly transferred costs from one department to another in order to circumvent its “Gainsharing” program, which provides bonuses to employees whose departments come in under budget. The managers effectively reallocated expenses from deficit-running teams to those with surpluses in order to reduce the reported surpluses and avoid triggering bonus payments tied to them.

After the lawsuit was filed, Whole Foods fired nine managers in Washington D.C., Maryland, and Virginia who were alleged of engaging in the cost transfers. The lawsuit additionally claimed that the grocery chain’s unlawful practice ranged nationwide and “a decision made at the executive level … to pad company profits.” While Whole Foods admitted to wrongdoing tied to the nine managers, it denied the claim that such actions occurred nationwide.

This settlement comes after the judge of the case denied the workers’ request to certify a class of all employees that had not received proper compensation under the Gainsharing program. The class was to consist of more than 5,000 employees from the nine stores and more than 147,000 employees nationwide. The judge ultimately denied the request stating that it would be too difficult to certify the class since each employee had his or he own individual issue. Additionally, the workers did not show that all potential class members were not properly paid by Whole Foods alleged practice.

The workers and Whole Foods requested 60 days in order to finalize the terms of the settlement as they have not done so already.  

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Greenwashing is when a company overstates its efforts towards its sustainability goals. In other words, a company engages in greenwashing when it deceptively advertises that its products, goals, and policies are environmentally friendly.

According to Frankfurter prosecutors, DWS engaged in greenwashing from mid-2020 to the end of January 2023. “The impression given to the capital market that DWS Group was supposedly the market leader in sustainable financial products was not, or not completely, fulfilled by the business’s organization itself,” the prosecutors said. DWS didn’t monitor the situation carefully enough and instead advertised itself as being a “leader” in the ESG field or incorporating ESG as an “integral part of our DNA.” They didn’t correspond to reality, according to prosecutors.

According to the investigation, the first documented instance of the alleged greenwashing occurred when DWS fired an executive who claimed that the company inflated its sustainability targets to investors. Shortly after, the firm was charged with similar greenwashing allegation by the Securities and Exchange Commission in which it agreed to pay a fine of $25 million. Specifally, DWS was charged for making “materially misleading statements” in connection to its ESG research and investments. The firm did not admit or deny the SEC’s findings.

DWS agreed to the terms of the settlement fine and said that it will not appeal. “We have already publicly stated in recent years that our marketing was sometimes exuberant in the past,” the firm said in a statement. “We have already improved our internal documentation and control processes and will continue to work on making further progress in this area.”  

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According to the new rule, Nasdaq will require that companies raise at least $15 million in order to list on its exchange. Nasdaq appears to have set an exceptionally high standard for microcap companies and other firms seeking to provide liquidity to their investors.

Nasdaq is changing the way it calculates public float, which refers to shares available for trading that are not held by insiders or restricted due to lockups. Previously, Nasdaq included shares registered for resale by existing investors at the time of an IPO in these calculations. Under the new rule, only newly issued IPO shares will be counted.

In its letter to the SEC, Nasdaq stated that “it has observed that the companies that meet the applicable Market Value of Unrestricted Publicly Held Shares requirement through an IPO by including Resale Shares have experienced higher volatility on the date of listing than those of similarly situated companies that meet the requirement with only the proceeds from the offering.”

As a result, Nasdaq is now only including newly issued IPO shares when making calculations in connection to its listing requirements as opposed to additionally including resale shares. The Exchange hopes that by doing so, it will not list companies exposed to high volatility. “As such, it is appropriate to modify the rules to exclude the resale shares from the calculation of market value,” Nasdaq told the SEC.

According to many in the capital markets industry, this rule could revive the dying Special Purpose Acquisition Company (SPAC) market. With the newly set bar, many companies will look to engage in reverse mergers which provides an alternate pathway towards an IPO.

Furthermore, companies seeking to uplist from over-the-counter markets, such as those operated by OTC Markets Group Inc., must now raise at least $5 million through a firmly underwritten public offering to list on the Nasdaq Capital Market, or $8 million to list on the Nasdaq Global Market. Previously, Nasdaq’s public offering requirement for both tiers was $4 million.

Ultimately, Nasdaq is implementing this rule to reduce the listing of highly volatile companies on its exchange. By excluding certain insider shares from its calculations, Nasdaq has established a higher threshold for companies seeking to qualify for listing.  

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In February, acting SEC Chair Mark Uyeda requested that the court pause a lawsuit that challenged the validity of the disclosure rules in order for the SEC to assess whether it would like to proceed with its defense of the rules. Uyeda requested that the court give the SEC 45 days to decide whether it would like to move forward with the case. Now that the 45 days is up, Uyeda informed the court that the SEC decided to drop its defense of the climate disclosure rules.

“The rule is deeply flawed and could inflict significant harm on the capital markets and our economy,” according to Uyeda “The goal of today’s Commission action and notification to the court is to cease the Commission’s involvement in the defense of the costly and unnecessarily intrusive climate change disclosure rules.”

SEC’s Decision Faces Criticism from One Commissioner 

Although, a majority of the SEC Commissioners opposed the rules, Commissioner Caroline Crenshaw, who originally voted in favor of the rules, denounced the Agency’s decision to step away from the lawsuit. According to Crenshaw, the SEC’s decision to step away goes against the procedures set out by the Administrative Procedure Act in effectively rescinding the rules.

“In effect, the majority of the Commission is crossing their fingers and rooting for the demise of this rule, while they eat popcorn on the sidelines,” Crenshaw said in a statement. “We are now firmly in a period of policy-making through avoidance and acquiescence, rather than policy-making through open, transparent, and public processes. This approach does not benefit the markets, capital formation, or investors.”

Crenshaw now requests that the court appoint someone else to take the SEC’s former place in defending the rules. It is not clear whether the court will do so or if someone will voluntarily step up to the plate.

For now, the climate disclosure rules will not be defended in terms of their validity and legality. As a result, unless someone is appointed or voluntarily takes action, the rules will be rescinded, and companies will no longer be required to disclose the impact of climate change on their businesses.  

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UFP’s primary business is providing brokerage and research services to institutional customers. As part of its compliance procedures, the firm requires its chief compliance officer to review the outside brokerage account statements of the firm’s representatives. However, Dickerson did not consistently do so.

“As a result of Dickerson’s failure to reasonably monitor and review outside brokerage accounts, Respondents failed to detect and investigate trading by three employees in securities covered by the firm’s research group during the period April 2019 to June 2022,” FINRA said in its cease-and-desist order.

According to FINRA, Dickerson employed a manual process to request the outside brokerage account statements from time to time. She did not have a regular practice of tracking which statements she requested and she did not verify that she received the account statements that she requested. Although the firm’s manual compliance verifications required associated persons to disclose new outside brokerage accounts, Dickerson did not consistently review those verifications, and she failed to obtain annual compliance questionnaires from any firm representatives in 2021.

UFP and Dickerson Failed to Restrict Information Flow and Report Certain Transactions

UFP and Dickerson also allegedly engaged in additional violations, specifically in connection to FINRA Rule 5280(b). This rule provides that “a member must establish, maintain and enforce policies and procedures reasonably designed to restrict or limit the information flow between research department personnel, or other persons with knowledge of the content or timing of a research report, and trading department personnel, so as to prevent trading department personnel from utilizing non-public advance knowledge of the issuance or content of a research report for the benefit of the member or any other person.”

FINRA alleges that UFP and Dickerson did not implement procedures in line with Rule 5280(b). FINRA claims that the firm and Dickerson permitted unrestricted interactions between UFP’s research analysts and its sales and trading staff. The firm’s research analysts regularly circulated pre-publication draft research reports to sales and trading staff to obtain their input, including on the recommendations of the reports. Dickerson was copied on these communications, but she did not restrict the pre- publication review of the reports by sales and trading staff.

Additionally, FINRA Charged UFP for its failure to report TRACE-eligible transactions and failed to establish and maintain a reasonable supervisory system related to TRACE reporting. TRACE facilitates the mandatory reporting of over-the-counter transactions in certain fixed income securities and provides increased price transparency to market participants and investors.

The charges claim that UFP did not report any of its at least 223 TRACE-eligible transactions from April 2019 through April 2021. Until June 2021, the firm neither addressed its TRACE reporting obligations nor conducted any supervisory review related to TRACE reporting.

As a result of these allegations, UFP agreed to a $215,000 fine as well as an undertaking of reviewing and implementing certain supervisory policies and procedures. Dickerson agreed to a one-month job suspension and pay a fine of $5,000. Both UFP and Dickerson did not admit or deny any wrongdoing.  

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The OCC said that it has directed its examiners and staff to cease screening banks for reputation risk which refers to the risk of potential scandals or any other type of negative publicity that can possibly emerge and negatively impact a bank’s business. The OCC expressed its disagreement with the examination as it placed too much judgmental and discretionary power in the hands of the examiners. Rather, it believes that more focus should be placed on more “transparent risk areas.”

“The OCC’s examination process has always been rooted in ensuring appropriate risk management processes for bank activities, not casting judgment on how a particular activity may fare with public opinion,” said Acting Comptroller of the Currency Rodney Hood. “The OCC has never used reputation risk as a catch-all justification for supervisory action. Focusing future examination activities on more transparent risk areas improves public confidence in the OCC’s supervisory process and makes clear that the OCC has not and does not make business decisions for banks.”

The OCC believes that by getting rid of reputation risk it will maintain strong risk management as well as fair customer treatment. The agency perceives the removal of such an risk assessment will ensure transparency and accountability within the OCC’s operations. According to the agency, the limitation of subjectiveness within the examination will enable the OCC to create a more effective regulatory environment.

OCC’s Move Receives Support From Banking Industry

This move has received much support from the banking industry. Financial Services Forum President and CEO Kevin Fromer called the OCC’s actions an “important step to create a more transparent and effective regulatory environment.” Greg Baer, president and CEO of the Bank Policy Institute added support to the agency’s actions in stating “Bank exams should be transparent and grounded in objective legal standards. This marks meaningful progress in refocusing oversight on material financial risk, rather than reputational risk, operational risk, corporate governance, vendor management and other matters that do not pose a material threat to safety and soundness.”

The OCC emphasized that while it is removing an aspect of the examination it will continue to regulate in a strict and efficient manner. “The removal of references to reputation risk from OCC handbooks and guidance issuances does not alter the OCC’s expectation that banks remain diligent and adhere to prudent risk management practices across all other risk areas,” according to its press release. “The OCC expects to complete its efforts to update its public documents in the coming weeks.”  

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According to Uyeda, Gensler was too quick to enact rules. The “shortcuts” Gensler took led to numerous legal challenges which posed unnecessary expenses, according to Uyeda.

The Acting SEC chair now wants to adopt a different approach to SEC rulemaking- one that he believes will be more efficient and effective in its purpose. “Turning to future rulemaking, the Commission should act like a super-sized freighter, not a speed boat — and that means returning to a smoother regulatory course than the rapid changes that have been promulgated over the last four years, “Uyeda said.

The Administrative Procedure Act requires proposed rules to have a “notice and comment” period. While the duration of such a period is not explicitly provided, a comment period of at least 60 days has been endorsed by the Administrative Conference of the United States for significant regulatory actions. However, Uyeda pointed out that a large number of proposals were afforded comment periods well below 60 days under Gensler. “45-day, and even 30-day, comment periods were the norm… which “represented a significant deviation from everything that I had been taught about rulemaking as a member of the staff in my nineteen years with the Commission,” according to Uyeda.

Uyeda’s Steps Toward Implementing the “Blueprint” to Reform SEC Rulemaking

Uyeda has already taken a number of actions in pursuit of his “blueprint’s” implementation. The SEC Chair granted private fund advisers additional time to comply with newly expanded reporting requirements and extended compliance deadlines for a marketing rule aimed at environmental, social, and governance (ESG)-focused funds.

He also directed his staff to develop recommendations on re-proposing certain aspects of the recently-adopted Form N-PORT reporting requirements. This requirement mandates that certain funds regularly report their holdings to the SEC, with last year’s update requiring more frequent and detailed disclosures.

“Commenters raised concerns about more-frequent public disclosure of funds’ portfolio holdings,” Uyeda said in connection to the Form N-PORT changes. “Among other issues, are these concerns heightened by continuing advances in artificial intelligence?”

Uyeda also mentioned a possible change to crypto regulations including the added requirement for investment advisers to place customers’ crypto assets with a qualified guardian.

Ultimately, Uyeda emphasized how SEC rulemaking must “respect the limits of our statutory authority.” He understands that while this may take some time and patience, it is significantly more important that the SEC “take the time to do things carefully and methodically, rather than rush and risk actions that are not fully thought through.” This approach will ultimately help the SEC mitigate legal challenges, reducing costs, and most importantly, ensure that the agency stays within the scope of its authority.  

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Trump’s firing has mainly come under question due to the 110-year-old precedential case of Humphrey’s Executor v. United States. The Supreme Court in this case ruled that the president cannot fire an FTC Commissioner unless the president finds “good cause” such as malfeasance or neglect of duties. Under this rule, FTC commissioners cannot be removed at will, making President Trump’s actions a direct contradiction to the case’s established protections.

However, succeeding cases seemingly put the main holding in Humphrey’s Executor at risk of being overruled. The Court’s ruling in Seila Law v. CFPB indicated that there may be an exception to the Humphrey ruling in holding that it is unconstitutional for an administrative agency to be headed by a single director not removable by the president at will. Many point to the distinction that in Seila Law, the agency in question was headed by one director whereas the FTC has multiple commissioners.

This is not the first time that President Trump has called Humphrey’s Executor into question. In February, the Trump administration fired former National Labor Relations Board member Gwynne Wilcox and Hampton Dellinger from the Office of Special Counsel. However, a District Court reversed the firings under the principles set out by Humphrey’s Executor. Although the court did rule against President Trump, his administration appealed the ruling which will most likely end up in the Supreme Court’s hands for a final decision.

Trump’s Firings Elicited Both Criticism and Support

Bedoya and Slaughter announced that they will challenge this termination as they claim it goes beyond the President’s executive authority to remove officers. “I woke up this morning, as I have every day for nearly the last seven years, eager to get to work on behalf of the American people to make the economy more honest and fair,” Slaughter said in a statement. “But today the president illegally fired me from my position as a Federal Trade Commissioner, violating the plain language of a statute and clear Supreme Court precedent. Why? Because I have a voice. And he is afraid of what I’ll tell the American people.”

Although President Trump’s action draw controversy, many view Humphrey’s Executor as wrongly decided on the basis that it goes against constitutional principles that grant the president broad control over the government. “President Trump has the lawful authority to manage personnel within the executive branch,” White House spokesperson Taylor Rogers said. “President Trump will continue to rid the federal government of bad actors unaligned with his common-sense agenda the American people decisively voted for.”

FTC Chair Andrew Ferguson adding onto the support of President Trump’s firings stated that he has “no doubts about Trump’s constitutional authority to remove Commissioners, which is necessary to ensure democratic accountability.”

Ultimately, President Trump’s firings challenges a major Supreme Court decision, an action that rightfully invites both criticism and support. While these firings will certainly face legal challenge and end up in a district court, the issue is likely to reach the Supreme Court, which may ultimately decide whether to overturn the landmark case of Humphrey’s Executor.  

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Over a nearly two-year period, personnel in PwC Singapore’s Independence Office developed and implemented various methods to understate the rates at which the PwC personnel failed to properly or timely disclose their financial interests and relationships. These methods involved misclassifying certain of those failures – known as PICT exceptions – as self-reported. As a result, on two separate occasions the firm provided understated PICT exception rates to the PCAOB in order to address prior PCAOB inspection findings.

“The PCAOB found that firm leadership’s focus on achieving a targeted PICT exception rate, combined with a lack of appropriate PICT-related policies and procedures and related controls, enabled the independence office’s misconduct,” the PCAOB said. “The PCAOB also found that the firm failed to give appropriate consideration to the assignment of quality control responsibilities when selecting the individual it appointed as its partner responsible for independence.”

The PCAOB found that PwC Singapore’s leadership’s focus on achieving a targeted PICT exception rate, combined with a lack of appropriate PICT-related policies and procedures and related controls, enabled the Independence Office’s misconduct. The PCAOB also found that the firm failed to give appropriate consideration to the assignment of quality control responsibilities when selecting the individual it appointed as its Partner Responsible for Independence.

“It is imperative that firms maintain an appropriate ethical culture in all aspects of their system of quality control,” said Robert E. Rice, Director of the PCAOB’s Division of Enforcement and Investigations (DEI). “Firms must properly monitor and report on compliance with their independence-related policies and procedures to ensure the Board and investors have accurate information.”

PwC Singapore’s Cooperation Credit

The PCAOB board noted that it took PwC Singapore’s “extraordinary cooperation in this matter.” Specifically, the firm shared with the PCAOB the results of its internal investigation which revealed the circumstances surrounding the Independence Office’s efforts to improperly reduce the Firm’s reported PICT exception rates.

Without admitting or denying the Board’s findings, PwC Singapore agreed to settle the PCAOB’s allegations, which ultimately imposed a $1.5 million penalty. PwC Singapore is also required to undertake certain remedial measures to establish, revise, or supplement, as necessary, policies and procedures, including monitoring procedures, related to the Firm’s independence processes.  

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