From Order to Regulation: How EOs Are Reshaping Banking

Since taking office in January 2025, President Donald Trump has signed around 270 executive orders establishing the administration's official policies across a sweeping range of subjects. A year and a half into his second term, banks and other financial services providers have begun to feel the impact of those directives.

While executive orders by themselves rarely compel immediate changes in industry practice, they function as powerful catalysts, signaling regulatory priorities, directing agency heads to act and setting timelines for formal rulemaking.

Once agencies respond with final rules, guidance withdrawals or interpretive statements that go through notice and comment or other formal processes, the resulting changes can endure well beyond any single administration.

This article surveys several executive orders issued under the Trump administration so far that have directly reshaped the banking and financial services landscape. It also examines the formal regulatory actions they have produced.

Deregulation by Directive: Executive Order No. 14192 and the CFPB's Guidance Withdrawal

Executive Order No. 14192 was signed on Jan. 31, 2025. The order directed federal agencies to identify 10 existing regulations for elimination for every new regulation proposed. It also required that the total incremental cost of all new regulations for fiscal year 2025 be "significantly less than zero."

Notably, Section 5 of the order made clear that this requirement does not only apply to regulations promulgated through notice-and-comment rulemaking. It also applies "without limitation" to guidance documents, memoranda, administrative orders, policy statements and interagency agreements.

On May 12, 2025, the Consumer Financial Protection Bureau responded to the president's order.

In a notice published in the Federal Register, acting CFPB Director Russell Vought ordered the withdrawal of 67 guidance documents, covering eight policy statements, seven interpretive rules, 13 advisory opinions and 39 pieces of other guidance that had been issued since the bureau's inception in 2011.

Vought stated that in "many instances, this guidance has adopted interpretations that are inconsistent with the statutory text and impose compliance burdens on regulated parties outside the strictures of notice-and-comment rulemaking."

The rescinded documents touch most major federal consumer financial protection statutes, including the Fair Credit Reporting Act; the Truth in Lending Act; the prohibition on unfair, deceptive, or abusive acts or practices (known as UDAAP) under the Consumer Financial Protection Act; and the Electronic Fund Transfer Act.

Among the more notable withdrawals were the buy now, pay later interpretive rule; the policy statement on the "abusive" prong of UDAAP; and the Regulation B interpretive rule addressing discrimination based on sexual orientation and gender identity.

The CFPB simultaneously announced it was "reducing its enforcement activities" in conformance with the president's deregulatory directive, while cautioning that the withdrawals are "not necessarily final" and that it intended "to continue reviewing all guidance documents to determine whether they should ultimately be retained."

For industry participants, the practical effect is significant: Compliance programs built around now-withdrawn guidance must be reassessed, and the regulatory expectations that shaped product design and marketing decisions for over a decade are now in flux.

Eliminating Disparate Impact: Executive Order No. 14281 and the Regulation B Final Rule

Executive Order No. 14281, signed on April 23, 2025, declared that it "is the policy of the United States to eliminate the use of disparate-impact liability in all contexts to the maximum degree possible."

The order directed all agencies to deprioritize enforcement of statutes and regulations that include disparate impact liability. It also instructed the attorney general to report on all existing regulations, guidance, rules or orders imposing such liability, along with steps for their amendment or repeal.

The CFPB's April 22, 2026, response came in the form of a final rule amending Regulation B, which implements the Equal Credit Opportunity Act. The final rule expressly eliminates the so-called effects test from Regulation B.

The bureau explained that the prior "conclusion that disparate-impact claims may be cognizable under ECOA is not the best interpretation of ECOA" because it relied on legislative history rather than statutory text.

Under the revised regulation, facially neutral practices are no longer prohibited unless they function as a proxy for protected characteristics and are designed or applied with discriminatory intent. ECOA claims thus pivot to a disparate treatment framework focused on intentional discrimination.

The final rule, which became effective July 21, also narrowed the "discouragement" standard under ECOA and imposed new conditions on special purpose credit programs.

Banks should note an important caveat: The Fair Housing Act continues to provide for disparate impact liability with respect to loans related to residential real estate. Accordingly, mortgage lenders still face disparate impact risk through the Fair Housing Act even after the Regulation B amendment takes effect.

State antidiscrimination statutes that recognize disparate impact theories also remain operative.

The Regulation B change is nonetheless significant because it removes a major federal enforcement tool that had shaped fair lending compliance programs for decades and, as a product of formal notice-and-comment rulemaking, it will require a future rulemaking to reverse.

Promoting Access to Mortgage Credit: Executive Order No. 14393

Executive Order No. 14393, signed on March 13, 2026, targeted the compliance costs of mortgage origination and servicing that have contributed to a decline in bank participation in mortgage lending, particularly among community banks (those with assets under $30 billion) and smaller banks (with assets under $100 million).

The order directed the CFPB and other regulators to consider a broad suite of reforms, including aligning supervisory expectations to support portfolio mortgage servicing as a core community banking function, extending cure-first standards to good faith servicing errors, simplifying loss mitigation requirements and issuing proposed rules exempting smaller banks from complex mortgage servicing requirements.

This executive order is particularly noteworthy because it intersects with a pending rulemaking.

In July 2024, under the Biden administration, the CFPB proposed a rule titled "Streamlining Mortgage Servicing for Borrowers Experiencing Payment Difficulties" to amend Regulation X loss mitigation procedures. By directing the CFPB to simplify loss mitigation requirements, this order is causing the CFPB to revisit and potentially finalize the 2024 proposed mortgage servicing rule.

The CFPB's 2026 rulemaking agenda suggests that the rule is now in the final rule stage and that a final rule may be published at the end of the summer.

Moreover, the CFPB issued a request for information dated July 9 regarding promoting access to mortgage credit, with comments due Aug. 10. The CFPB is seeking input on potential changes to mortgage disclosure and rescission requirements.

The ultimate shape of any final rule remains to be seen, but the executive order has clearly redirected the trajectory of mortgage origination and servicing regulation.

Immigration, Credit Risk and Ability to Repay: Executive Order No. 14406

Executive Order No. 14406, signed on May 19, represents the administration's effort to link immigration enforcement and consumer credit risk within a single policy framework. The order established a policy of safeguarding financial institutions against structural credit risks and deterring fraud and abuse.

Among its key directives, the order directed the CFPB, within 60 days, to consider clarifying that potential deportation and loss of wages are factors that could affect a borrower's ability to repay under TILA and Regulation Z.

Additional provisions require the U.S. Department of the Treasury to propose amendments to Bank Secrecy Act regulations to strengthen risk-based customer due diligence and to consider changes to customer identification program requirements.

The CFPB responded with a statement dated June 8 reminding creditors of their obligations under TILA and Regulation Z.

The statement notes that creditors relying on U.S.-based employment income are "permitted — and may, under certain facts and circumstances, be obligated — to consider information that bears on the consumer's underlying and continuing ability to earn income," including immigration status.

The statement references the administration's "stated policy of removing any person unlawfully present in the United States" and suggests that "a creditor's awareness of a consumer's immigration status may implicate a creditor's reasonable expectations about whether a consumer's income from U.S.-based employment will remain available for repayment."

While the statement expressly notes that it does not have the force or effect of law, it signals a supervisory expectation that creditors factor immigration-related risks into underwriting.

The Big Picture and Practical Takeaways: From Executive Order to Regulation

The examples above illustrate a consistent pattern. An executive order articulates a policy objective and directs one or more agencies to act within defined time frames. Within weeks or months, the agency then responds through formal mechanisms: notice-and-comment rulemaking, guidance withdrawals, requests for information or interpretive statements.

Each of these mechanisms carries a different degree of legal durability. A final rule published in the Federal Register after notice and comment can only be undone through another notice-and-comment rulemaking, a process that typically takes one to two years.

Guidance withdrawals, while more easily reversible in theory, nonetheless reshape market behavior in ways that may prove difficult to undo. And requests for information, while not binding, signal the direction of future rulemaking and influence how institutions allocate compliance resources.

The Regulation B final rule eliminating disparate impact liability is perhaps the clearest example of this dynamic. Because it went through full notice and comment, it cannot be reversed by a subsequent administration's executive order alone. A new rulemaking would be required.

The same logic applies to any final rule that emerges from Executive Order No. 14393's directive to reform mortgage servicing requirements.

By contrast, the CFPB's statement on immigration status and ability to repay, which expressly disclaims the force of law, could be withdrawn by a future director without formal process, but the market expectations it creates may persist regardless.

Taken together, the regulatory actions flowing from these executive orders represent a significant shift in the compliance landscape for banks and financial services providers. The new pattern of regulatory activity makes clear that institutions should not wait for final rules to assess the impact of executive orders on their businesses.

The issuance of an executive order is itself a signal that formal action is likely to follow, and the timelines specified in recent orders are short, often 30 to 180 days. Compliance teams should begin assessing potential impacts when an order is signed, not when a final rule is published.

With respect to the substantive actions taken thus far, a few points bear emphasizing.

First, the withdrawal of longstanding guidance creates both opportunity and risk.

Products and practices that were previously constrained by now-rescinded interpretive rules may be revisited, but institutions should proceed with caution: The underlying law remains the law, and state regulators may fill gaps left by federal retrenchment.

Second, the elimination of disparate impact under ECOA does not eliminate fair lending risk. The Fair Housing Act, state statutes and the disparate treatment framework all remain in force. Institutions should ensure their fair lending programs are calibrated to this new reality rather than assuming a wholesale reduction in exposure.

Third, the intersection of immigration enforcement and consumer credit creates novel compliance challenges. Institutions must navigate the tension between the CFPB's stated expectation that immigration status may bear on ability to repay and their obligations under fair lending laws not to discriminate on the basis of national origin.

Executive orders are often dismissed as mere statements of policy intent. The recent developments under the Trump administration demonstrate otherwise.

Through a combination of deregulatory mandates, policy reversals and directed rulemakings, the Trump administration has used executive orders to spur formal regulatory changes that are reshaping banking and financial services in real time.

Many of these changes will outlast the current administration. This is especially true for final rules that have been issued and those that appear on the horizon.

Industry participants are well advised to monitor not only the orders themselves but also, more critically, the agency actions that follow, and to engage in comment processes that offer the opportunity to shape outcomes before they become final.

Republished with permission. This article, "From Order to Regulation: How EOs Are Reshaping Banking," was published in Law360 on July 27, 2026.