The regulatory space is undergoing significant changes during President Trump's second term. Some of these changes will undoubtedly impact alternative data providers and buyers. This report outlines key developments across various regulatory agencies and their potential impact on the data market.

THE CONSUMER FINANCIAL PROTECTION BUREAU

The Consumer Financial Protection Bureau (CFPB) has experienced dramatic shifts in leadership and operations. On 31st January 2025, President Trump fired former director Rohit Chopra and appointed Treasury Secretary Scott Bessent as acting director. Bessent promptly ordered CFPB staff to halt most of the agency's operations, including issuing regulations, enforcement actions, and communications. On 7th February 2025, Russell Vought, a former Trump administration official, was named acting director and announced a freeze on all CFPB supervision of financial companies. Subsequently, on 11th February 2025, Jonathan McKernan was nominated for the permanent CFPB director role.

These changes have led to a significant curtailment of the CFPB's regulatory and supervisory activities. The bureau's focus has shifted toward aligning with the president's broader financial deregulation agenda.

In response to these drastic changes, the National Treasury Employees Union filed two lawsuits on 15th February 2025. One lawsuit is challenging the administration's actions, claiming they are violating the CFPB employees' due process rights, while the other seeks to prevent the destruction of agency data and documents. A federal judge has issued a temporary restraining order forbidding the Trump administration from deleting CFPB data, terminating employees, or reducing the agency's funding.

From our perspective, three things about these changes are particularly important to the data space:

We're likely to see actors in the data space be more willing to undertake actions they wouldn't have during Chopra's tenure. Less supervision may mean a more active financial data market but also more high-risk behaviour.It's crucial to remember that whether or not a CFPB regulation is being enforced, it's still in effect unless a new rule from the CFPB or legislation from Congress supersedes it. So, nothing is stopping the agency from changing course and deciding to enforce it. State attorneys general also retain some power to enforce the Consumer Financial Protection Act. It's important to remember that though the CFPB was increasingly focused on data issues under Rohit Chopra's leadership, data issues were not central to the agency, nor were they what motivated the Trump administration's efforts to limit the agency. However, other agencies like the FTC and state-level actors may fill the gap.

FEDERAL TRADE COMMISSION

Andrew Ferguson was appointed chairman of the Federal Trade Commission (FTC), and Christopher Mufarrige was appointed director of the Bureau of Consumer Protection. The agency is shifting towards a more business-friendly approach, particularly regarding emerging technologies like AI, which could lead to a more permissive environment for some data businesses.

While the FTC is expected to scale back or change Khan-era rulemakings on certain issues, such as junk fees, non-competes, click-to-cancel, and others, the agency may maintain its scrutiny of tech companies and data providers, continuing its emphasis on protecting retail investors from fraudulent schemes.

Under Ferguson, the FTC should not be expected to push the boundaries of enforcement or test the jurisdiction of the FTC as the agency did under Lina Khan. More likely, we should expect a return to what prior Republican commissioners termed ‘regulatory humility’. However, support for consumer data protection and distrust of big tech are relatively bipartisan issues. Big tech is relevant because actions intended to curb the industry's data practices often have ripple effects through the overall data space.

SECURITIES AND EXCHANGE COMMISSION

The Securities and Exchange Commission (SEC) has seen leadership changes, with Paul Atkins nominated as SEC chair and Mark Uyeda serving as acting chair. The commission is focusing on reducing regulatory burdens and adhering to established materiality standards. Key areas affecting data include a more accommodating stance toward digital assets, potential rollback of ESG disclosure initiatives, and a conservative approach to corporate disclosure and cybersecurity.

Under the previous administration, SEC Chair Gary Gensler was notably active, implementing preemptive measures and venturing into areas the SEC hadn't before. Some viewed this as expanding the agency's activity beyond its mandate. Under the Trump administration, we're likely to see an end to this expansive approach. The SEC's actions are expected to be more limited in scope, much like Trump's first administration, with a focus on traditional areas such as fraud.

While these changes may create new opportunities in the alternative data space, particularly around digital assets, the SEC is expected to maintain its focus on protecting retail investors from fraudulent schemes and continue enforcing existing securities laws.

FINAL THOUGHTS

The evolving regulatory landscape presents data buyers with both opportunities and risks. While there's potential for more cutting-edge data products and increased business activity, there may be a higher likelihood of legal and compliance issues. Data protection and privacy measures remain crucial, as does maintaining robust compliance programs.

We think it will likely be good for business in terms of sales and more cutting-edge data products. However, regarding risk, it's impossible to separate legal and compliance considerations from commercial considerations. If a company makes high-risk decisions that create legal issues, they immediately become commercial issues, whether that's because of bad press or a class action lawsuit.

For data providers and buyers, balancing the opportunities presented by this new landscape with the ongoing need for strong data protection practices and transparency in data collection and usage is essential. When evaluating data providers, it's vital to ensure that laws and finalised rules are adhered to because whether a law is enforced or not, if it's still in place, you are still responsible for complying with it.

As the regulatory landscape continues to evolve, alternative data buyers must stay informed and adaptable.