“Spinning Wheel Got to Go Round”: Developments in the Law Affecting Electronic Payments and Financial Services

Abstract

The past year reminds us of the rock lyrics from “Spinning Wheel” on Blood, Sweat & Tears’s 1968 self-titled record—“What goes up, must come down/Spinning Wheel got to go round”—because there have been many changes in strategy and reversal of policy since President Trump’s inauguration in January 2025. Our Survey documents these changes and reversals as they affect electronic payments and financial services. This year’s Survey also reports on warnings from state and federal regulators aimed at bank and non-bank providers of consumer financial services. Part II examines an FTC enforcement action related to the unfair and deceptive marketing of so-called “free” products. In Part III, we address a CFPB action against a peer-to-peer payments platform for failing to protect consumers from fraud. Part IV examines several federal enforcement actions that emphasize safety and soundness, as well as robust anti-money laundering programs. We also examine several cases that demonstrate how states are stepping up to address regulatory issues that are not being pursued at the federal level in Part V. In a similar vein, Part VI discusses developments in New York regarding Buy Now, Pay Later (“BNPL”) legislation in the wake of CFPB abandoning its regulatory authority over those products. In Part VII, we give a brief account of the federal government’s effort to impose economic sanctions on a “crypto mixer,” Tornado Cash, our only nod to our longstanding coverage of crypto currencies. We conclude in Part VIII with brief comments on—to borrow from the same refrain—what happens if you miss the “directing sign on the straight and narrow highway.” While the “spinning wheel” of regulatory pronouncements and retractions may prove dizzying to many observers, we trust this year’s Survey will help business lawyers provide a steadying hand and calming influence to nervous clients.