Financial Services Legislation Is in the Spotlight as the 119th Congress Settles In

The 119th Congress has now been seated, and is poised to consider, to take up — or to scuttle — financial services legislation that may touch on everything from credit cards to earned wage access (EWA) to digital assets.

The incoming majorities belong to the Republicans, of course, and it’s no secret that president-elect Trump and other members of his party have expressed misgivings about the Federal Deposit Insurance Corp. (FDIC) and the Consumer Financial Protection Bureau (CFPB), and the roles and scope of those agencies are as yet undetermined.

The House Financial Services Committee now is being chaired by Rep. French Hill, R-Ark. The Senate Banking Committee is being chaired by Sen. Tim Scott, R-S.C.

What May Be Up

As for what may still be considered “outstanding”:

Front and center will be what happens with the Credit Card Competition Act. It’s been a long road for the CCCA, which, among other things, would enable card payments to be routed over at least one network that competes with Mastercard and Visa. Since being introduced in 2023, the act has been stalled in Congress, and should it be taken up again, there’s no surety that it would make it through into law, but it may indeed come up for debate. Now vice president-elect JD Vance had signed on to the bill.

At issue will be the ways in which the bill would change the dynamics of the card industry. Supporters say that the routing provisions would open up competition. But as Karen Webster noted in a recent column, “Notwithstanding a lack of understanding of how dual routing would work for credit card transactions, the flaw in Sen. Durbin’s bill is a lack of understanding of how the current credit card ecosystem works. And, more fundamentally, how platform ecosystems ignite and scale — and are monetized.”

Separately, the Earned Wage Access Consumer Protection Act would define EWA providers and sets strict operational boundaries, specifically regulating both employee-sponsored programs and direct-to-consumer offerings.

Digital Assets

There have been various attempts to have legislation that would set frameworks for digital asset markets to be structured. One bill, the Financial Innovation and Technology for the 21st Century Act passed in the House but did not make it through the Senate. The act would, among other things, set standards for digital assets and consumer protections, and segregation of funds.

Crypto and artificial intelligence (AI), of course, will also be on the agenda.

In an interview with PYMNTS, Mike Katz, a partner in Manatt, Phelps and Phillips Financial Services Group, said that “despite the razor-thin Republican majorities, there is a growing bipartisan consensus in Congress around the need for thoughtful, innovation-focused crypto and AI legislation,” adding, “It will be interesting to see if any digital asset bills are part of the tax-and-border-focused reconciliation package already being discussed in Congress. I’d expect a strong stablecoin bill to move quickly given existing bipartisan support.”

And he added: “Keep an eye out early in 2025 for a repurposed or chopped up version of the pro-crypto bill FIT21 [which passed the House with a large bipartisan majority in May]. Regardless of form or timing, new legislation will finally provide clarity on the questions of whether crypto assets are ‘securities’ or ‘commodities’ … and on which regulatory authority is charged with oversight.”