James Kim, a leader in Troutman Pepper Locke’s Payments + Financial Technology Group, was quoted in the January 16, 2025 Banking Risk & Regulation article, “Trump Administration Expected to Roll Back Biden-Era UDAP Rules.”

James Kim, head of law firm Troutman Pepper Locke’s fintech group, says: “UDAP has been controversial in the US in the past couple of years. Now that we have a new president and a new Congress, the use of UDAP may change.

“If the federal agencies are more business-friendly, certain state regulators will become more aggressive in filling the void.”

Kim notes that this rule is one of several “last-ditch measures” rapidly issued by current CFPB Director Rohit Chopra ahead of Trump’s inauguration on January 20.

State regulators will likely step in to address perceived enforcement gaps, intensifying scrutiny on financial institutions, predicts Kim. This dual-level focus will require firms to navigate evolving compliance demands while maintaining consumer trust.

Kim stresses that understanding these risks is essential, highlighting that practices like misleading advertising or opaque disclosures are precisely the behaviours regulators aim to curb.

“The big risk is the reputational one,” says Kim. “No bank wants a reputation that they mistreat customers or do false advertising.”