While the current political narrative in the United States points towards a wave of deregulation at the federal level, some compliance leaders believe the opposite trend could quietly be taking shape.
As federal requirements are relaxed, states are showing signs of stepping in to fill the gap—potentially creating a patchwork of tighter regulations across the country.
Cardamon CEO and co-founder Areg Nzsdejan recently highlighted this growing dynamic, questioning whether U.S. deregulation is truly leading to less oversight. He said that while Washington continues to ease certain financial regulations, several states appear poised to introduce stricter rules in response.
The issue lies in America’s unique regulatory framework, where 50 states have the power to set their own standards and enforcement priorities. Even if only half of them choose to adopt tougher measures, the combined result could be an overall increase in regulatory obligations for financial institutions.
This phenomenon is drawing parallels with Europe, where 27 member states operate under a shared regulatory framework but still face national variations in implementation. If U.S. states begin tightening their individual policies at scale, the outcome might be a level of complexity surpassing even that of the European Union’s regulatory landscape.
It’s still early days, but this evolving trend has caught the attention of compliance professionals across the FinTech and RegTech sectors. Many chief compliance officers are now tracking how state legislatures may respond to deregulatory moves from Washington—particularly in areas such as consumer protection, data privacy, and financial crime compliance.
The next phase of U.S. regulatory development could therefore be defined not by sweeping federal rollbacks, but by a mosaic of local enforcement regimes that demand greater adaptability and oversight from firms operating nationwide. For compliance leaders, this could mean investing more heavily in technology, automation, and dynamic risk management to stay ahead of the curve.
As the situation unfolds, one thing seems increasingly clear: in the United States, less regulation at the top does not necessarily mean less regulation overall.
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