(As published in National Law Journal)
Regulatory enforcement of the U.S. financial services industry sharply declined in the first half of 2025, reflecting the Trump administration's rapid deregulatory push, according to a study released Tuesday.
Total enforcement actions against financial services firms fell 37% from the final six months of 2024, stated Wolters Kluwer’s Regulatory Violations Intelligence Index. Monetary penalties also dropped considerably, falling 32% in the three violation categories tracked—financial, consumer-protection and competition-related offenses, the information services company reported.
"We're witnessing a fundamental transformation in federal enforcement priorities," Chuck Ross, leader of Wolters Kluwer’s compliance management program, said in a statement. "While deregulation was anticipated under the new administration, the velocity and magnitude of this enforcement pullback exceeds even the most aggressive predictions.”
The reduction in financial enforcement reflects the administration’s weakening supervision of financial institutions by rolling back parts of the 2010 Dodd-Frank Act and dismantling the Consumer Financial Protection Bureau, the report stated. The administration has also streamlined enforcement activity at federal agencies, most notably at the Securities and Exchange Commission and the CFPB, where enforcers have focused on select high-profile misconduct cases rather than broad regulatory actions, the report added.
"This isn't just a modest adjustment—it's a complete recalibration of the enforcement ecosystem," Ross said.
Across the index’s categories, 99 enforcement actions occurred in the first 6 months of 2025, compared to 158 in the previous six-month period.
Financial penalties for competition violations, which include antitrust and corruption offenses, fell 97%, the report stated. That large drop was due to the four-month pause in Foreign Corrupt Practices Act enforcement at the Department of Justice, said Elaine Duffus, a regulatory compliance expert at Wolters Kluwer.
The broad retreat from enforcement leaves the financial industry with much more discretion in its compliance programs, Duffus said. Banks and financial institutions no longer have as much guidance around regulations and best practices, leaving corporate boards to “come up with the risk appetites around everything,” she added.
“The good news is there's not a lot of enforcement,” Duffus said. “The bad news is you have to figure out how to do this on your own in many cases.”
Ross said corporate compliance programs should stay robust to keep pace with state laws that have been expanding as states have stepped in to fill enforcement gaps left by the federal government, especially in consumer protection.
"History shows us that enforcement pendulums swing," he said. “Those who mistake the current deregulatory regime as the new normal do so at their own peril—especially as states fill the enforcement void.”
