Check It Out

The new federal administration is impacting both consumers and financial institutions, especially through new limits, requirements, and benefits.

Below are the most up-to-date and relevant explanations to understand the country’s current credit regulatory scenario.

The New Regulatory Framework

Several executive orders issued by the federal government have changed procedures related to payment processing and fraud prevention in official transactions.

One key measure is the mandate that all federal payments be made exclusively through electronic means by September 2025.

The Consumer Financial Protection Bureau (CFPB) has also announced measures to ease requirements for small businesses operating with credit.

These changes postponed deadlines and simplified registration processes initially scheduled for April and July 2025, aiming to focus oversight on the most critical consumer risk areas.

State Discussions on Short-Term Loans

Payday loans are a major topic in current regulation efforts, and several U.S. states are pursuing bills to tighten control over these services.

The goal is to enforce mandatory adoption of the APR (Annual Percentage Rate) as a standardized cost measure.

Additionally, these laws would require explicit and documented consumer consent before processing check deductions or automatic debits.

Such changes aim to curb abusive practices and increase transparency in short-term credit operations.

Changes in Mortgage Loan Rules

Mortgage lending remains a key issue. The Department of Housing and Urban Development (HUD) released Mortgagee Letter 2025-09.

This letter states that only U.S. citizens and permanent residents will be eligible for FHA-backed mortgages, starting in May 2025.

As a result, individuals with uncertain immigration status who are still awaiting official decisions will no longer qualify.

The justification is that long-term financing should be linked to borrowers with more stable residential profiles.

Additionally, the Federal Housing Finance Agency (FHFA) updated the maximum loan limits for what qualifies as “conforming” loans.

The limit for average-cost areas is $806,500, while high-cost areas such as New York and Los Angeles now have a ceiling of up to $1,209,750.

Student Loans and Government Programs

Following a suspension that began in March 2020, students in default will be required to resume student loan payments.

Starting in May 2025, borrowers must begin repayment, aiming to reduce the fiscal impact of the moratorium and reintroduce debtors into the repayment system with renegotiation options.

However, some states and courts are pushing back by implementing new rules for the Income-Driven Repayment (IDR) program.

This temporarily maintains previous guidelines until a definitive ruling is made.

The Department of Education also announced plans to simplify criteria for loan forgiveness programs such as Public Service Loan Forgiveness (PSLF), making the process more transparent and accessible for public sector workers.

Agricultural and Rural Financing

The U.S. Department of Agriculture (USDA) has released the new interest rates for the sector, effective April. They are:

• Operational loans: 5.375% interest
• Direct loans for rural property acquisition: 5.750% interest
• Joint financing: 3.750% interest
• Emergency loans: 1.750% interest
• Beginning farmer loans: 3.750% interest

Technological Advances in the Loan Sales Market

Freddie Mac, one of the leading agencies in the real estate loan market, has updated its Loan Selling Advisor system.

This introduces the next phase of the Uniform Loan Delivery Dataset and modernizes credit certificates, enhancing efficiency and compliance in loan sale processes between institutions.

Additionally, new features have been added, such as legally recognized Remote Online Notarization (RON) and new contract allocation methods, further advancing the sector’s digitalization.

New Overdraft Fee Regulations

The CFPB has also set a $5 cap on overdraft fees charged by financial institutions with over $10 billion in assets.

This measure is expected to save consumers approximately $5 billion annually.

Review of Fair Credit Rules

Federal regulators have indicated plans to repeal the 2023 updates to the Community Reinvestment Act (CRA), which focused on fair credit.

The move follows lawsuits filed by financial institutions challenging the scope of the new requirements.

If reversed, the emphasis will return to providing banking services to low-income communities and combating financial exclusion (redlining), but without the digital expansion that was included in the previous version of the regulation.

Written by

Gabriel Gonçalves