CFPB, Crypto and Consumer Confidence: Inside DC’s Unpredictable Regulatory Storm

If you’re tracking the mania in Washington, D.C., from a financial services perspective these days, you might notice that it’s starting to resemble a weather forecast.

Last week was partly manic, with a Consumer Financial Protection Bureau (CFPB) nominee pledging before Congress to uphold the basic mission of the agency, only to find that Department of Government Efficiency (DOGE) said it plans to cut 1,700 employees and shutter the agency the next day.

Then the forecast for this week is expected to produce a storm of tariffs. Up next week: A potential trade war.

It’s a tough forecast to prepare for, but the makings for a compelling conversation between PYMNTS CEO Karen Webster and former U.S. assistant secretary of the treasury and current partner at QED Investors Amias Gerety.

“I would say there’s a lot of centrist businesspeople who really want to believe that not everything is getting destroyed and that this will sort of settle down,” Gerety told Webster on Monday (March 3). “It’ll be basically business as usual, and I’m hopeful of that as well. But again, we need to start seeing evidence of that.”

Their conversation covered the three C’s of CFPB, crypto and consumer confidence, with a side order of tariffs and a read on the overall mood in Washington. Let’s take it from the top and start with the CFPB.

Future of CFPB

The confirmation hearing for Jonathan McKernan as director of the CFPB on Thursday (Feb. 27) has reignited debates over the future of the agency, particularly regarding its independence and authority. Gerety believes McKernan’s nomination represents a pivotal moment for the CFPB amid broader concerns over financial regulation. Both Gerety and Webster agreed that his performance at the nomination hearing was strong and encouraging — a commitment to protecting consumers without the overreach and focus on fines as the “scorecard.”

“The CFPB has been at the center of political and financial debates since its inception,” Gerety said, emphasizing that its regulatory stance will largely depend on McKernan’s approach.

Webster also weighed in on the confirmation hearing, noting that “the challenge for the CFPB under new leadership will be to maintain its role as a watchdog while ensuring it does not stifle innovation in financial services. Consumers need protection, but they also need access to evolving financial tools that meet their needs in the digital economy.”

Crypto Oversight

Speaking of the digital economy, beyond McKernan’s hearing, Gerety and Webster pointed to another major regulatory discussion — cryptocurrency oversight. This Friday, the White House is hosting a crypto summit, bringing together policymakers, industry leaders, and regulators to discuss the evolving landscape of digital assets. Gerety highlighted the significance of this summit, given the rapid expansion of the crypto market and its implications for both investors and the broader financial system.

“There’s an ongoing struggle to balance innovation with financial stability,” Gerety explained. He acknowledged that while crypto presents new opportunities, it also introduces significant risks, particularly in areas of fraud, security and systemic vulnerabilities. Regulatory clarity, he argued, will be key in fostering a healthy digital asset ecosystem.

“The industry is at a crossroads,” Webster said. “Without clear guidelines, we risk either overregulating and stifling innovation or underregulating and exposing consumers to significant risks. The key will be striking a balance that encourages responsible growth.”

Consumer Confidence?

As regulatory discussions unfold in Washington, Gerety also shared insights into the current state of the American consumer. Despite economic headwinds, including inflationary pressures and rising interest rates, consumer behavior has remained resilient in many sectors. However, he cautioned that consumer confidence is fragile and highly sensitive to macroeconomic shifts.

“There’s a lot of uncertainty in the market,” Gerety observed. “Consumers are still spending, but you can see hesitancy creeping in, especially when it comes to big-ticket purchases.” The balance between spending and economic caution will be a key indicator of financial health in the coming months, he said.

Finally, when discussing the overall mood in Washington, Gerety underscored the pervasiveness of uncertainty and its broader effects on the economy. “The policy landscape is unpredictable,” he said. “Investors, businesses and consumers alike are waiting for clarity, whether it’s on financial regulation, economic policies or broader geopolitical concerns.”

Gerety argued that this climate of uncertainty can stifle economic growth, as businesses delay investments and consumers adopt a wait-and-see approach. The interplay between regulatory decisions, market confidence and political developments will ultimately shape the financial outlook for 2025 and beyond.

As Washington prepares for another round of financial and regulatory debates, one thing remains clear, according to Webster and Gerety: The direction of agencies like the CFPB, the evolving crypto landscape, and consumer sentiment will all play crucial roles in determining the trajectory of the U.S. economy. The coming months will reveal whether policymakers can strike the right balance between oversight and growth, ensuring stability while fostering innovation.

“The world is watching what happens next,” Gerety said. “Stability breeds confidence, and confidence drives growth. If we can’t create a predictable regulatory and economic environment, we risk stagnation at a time when we need momentum the most.”