In a deregulatory era, banks need to maintain customer care standards

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While great uncertainty reigns, available signals from our nation's capital point to a new era of weakened financial regulation, particularly around consumer protection. In the face of reduced enforcement and the potential rollback of some rules, financial services leaders have a decision to make about how to conduct business. 

The smart choice is to hold fast to the norms that foster trust in the system. Fairness, transparency, integrity and accountability — these principles are essential for attracting and retaining customers, especially when they feel like they can't rely on government oversight to protect their interests.

To be clear, supervising and enforcing the financial rules of the road are critical to keeping the banking system safe and protecting consumers from harm. In the financial services industry, whose lifeblood is trust, government oversight sends a signal to the public that the system is trustworthy. As oversight shrinks, providers will have even more work to do to maintain the trust of their customers by doing the right thing. 

Trust in institutions of all kinds is at an all-time low across the globe, according to the 2025 Edelman Trust Barometer, and trust levels in the United States rank near the bottom. While low-income households are particularly distrustful, 62% of all people believe that business leaders "purposely mislead people by saying things they know are false or gross exaggerations." Just over half of Americans worry about experiencing prejudice, discrimination or racism, an 11-point, year-over-year increase — and this was before the latest actions to discredit and defund diversity, equity and inclusion initiatives. 

The financial services industry, in particular, has struggled to engender trust over the last two decades, particularly in the wake of the 2008 financial crisis, and it tends to rank among the least trusted sectors of the economy. Yet it appears to be on an upswing. Consumer trust in the industry increased 7 percentage points in the Edelman data, and after two years of falling trust levels in the J.D. Power satisfaction survey, 2024 brought gains for the largest U.S. banks.  

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Those gains coincided with a more muscular approach to financial regulation. Consider overdraft fees. Most of the top 25 banks have taken actions to rein in their bounced check and courtesy overdraft policies over the last three years, and as a result, consumer spending on overdraft fees decreased by $2.9 billion from 2020 to 2023. While a number of factors drove the changes, increased attention from the CFPB and the OCC almost certainly played a role. Regulators published research, made speeches, conducted examinations, issued guidance and testified before Congress about their concerns. In fact, banks made most of the changes long before the CFPB issued a rule late last year capping overdraft fees at $5 — a rule that is now in jeopardy of being overturned by a Congressional Review Act challenge. 

Regardless of what happens to the overdraft rule, it is unlikely that banks will turn back the clock on the changes they have already made. Lower overdraft fees, higher thresholds, grace periods and caps on daily fees are gradually becoming, at least at the big banks, new norms. 

And it's not just overdraft: A combination of new rules, supervisory and enforcement actions, and the bully pulpit of financial regulators have changed a wide range of financial practices for the better. Banks have become more careful about the accuracy of the information they report to credit bureaus and provide to debt collectors. They are more attuned to how they incentivize their front-line employees. Credit card issuers have essentially stopped cross-marketing "add-on" products like credit insurance that offered little value for the money. Consumer reporting agencies are more focused on how they handle consumer disputes. 

Norms matter. Importantly, over the last decade, we've seen a focus on consumer financial health outcomes emerge as a norm in the financial services business. Today, providers of all kinds employ teams of people focused on financial health. A growing number are leveraging survey and transaction data to measure the financial health of their customers, in sync with the OCC's vital signs initiative, which encourages banks to monitor and take action to improve their customers' financial well-being. What's needed now are clearer standards that define the financial products and practices that contribute to positive customer outcomes.  

None of this is to say that the job of financial regulation is over, or that financial services providers no longer act in ways that cause consumer harm. Far from it. What it means is that the industry has made positive strides in boosting consumer trust, and as we enter an era of deregulation, that trust is theirs to lose.

As the financial services industry charts a path forward, bankers should be careful in this moment not to mistake the floor for the ceiling. Regulations are a lower-bound threshold for behavior: Thou shalt not. Settling for the floor is almost never a winning strategy, let alone the right strategy, certainly not in the long run.