🎢 The Most Contradictory Month in Regulatory History

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November 2025 delivered something unusual: a month where federal policy pulled in opposite directions simultaneously.

The White House ordered banks to stop denying services to "lawful businesses" and reinstate previously rejected customers. Regulators proposed banning "reputation risk" as a supervisory factor. The CFPB moved to exempt merchant cash advances from a compliance rule that threatened to reshape the industry.

At the same time, Congress banned 95% of the hemp industry. Cannabis rescheduling remained frozen. The SBA kept cannabis businesses locked out of all loan programs.

Same month. Same government.

Here's what happened - and what it means for operators navigating the chaos.

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The Debanking Order: December 5 Deadline Approaches

President Trump recently signed Executive Order 14331, titled "Guaranteeing Fair Banking for All Americans."

The order represents the most aggressive federal action against debanking in recent history. It directs regulators to eliminate "reputation risk" from their supervisory materials and requires financial institutions to make efforts to reinstate customers who were previously denied services.

The Small Business Administration sent letters to more than 5,000 lenders on August 26 with specific requirements. 

By December 5, 2025, those lenders must identify any past or current policies that encouraged debanking, make reasonable efforts to reinstate previously denied clients, and notify those clients of renewed access to services.

By January 5, 2026, lenders must submit compliance reports to the SBA. Those who fail to comply "will lose their good standing with the SBA and will be subject to additional punitive measures," according to Administrator Kelly Loeffler.

The regulatory machinery is moving quickly.

The FDIC and OCC issued a joint notice of proposed rulemaking that would formally prohibit the use of reputation risk in their supervisory programs. The proposed rule would prevent regulators from requiring, instructing, or encouraging banks to close accounts or terminate business relationships based on a customer's "political, social, cultural, or religious views or beliefs."

Comments on that proposal are due December 29, 2025.

The Federal Reserve announced separately in June that reputation risk would no longer be a component of its examination programs. A DOJ-Virginia Task Force is investigating past debanking practices.

The White House fact sheet accompanying the order specifically mentions digital asset firms as targets of unfair debanking and references Operation Chokepoint, the Obama-era initiative that pressured banks to limit services to certain lawful industries.

Industries that may see relief include firearms manufacturers and dealers, cryptocurrency firms, energy companies, and religious organizations - businesses the administration says have been systematically denied services based on political rather than financial considerations.

One critical caveat: the order protects "lawful business activities." 

Cannabis remains a Schedule I controlled substance under federal law. The hemp industry just got hit with new restrictions.

Neither should expect relief from debanking reform.

CFPB Reverses Course on Merchant Cash Advances

This month, the Consumer Financial Protection Bureau released a 198-page proposal that reverses its previous position on merchant cash advances.

The 2023 Section 1071 rule would have required MCA providers to collect and report extensive data on every transaction - the same requirements facing traditional lenders. 

The new proposal exempts MCAs entirely.

The Bureau's reasoning, published in the Federal Register, is: "MCAs are structured differently from traditional lending products; traditional lending concepts like 'interest rate' do not fit the way that MCAs are priced."

The CFPB also acknowledged that it "erred in prematurely determining" that all MCAs constitute credit under existing law. 

The agency now believes the 2023 rule's "one-size-fits-all approach" didn't account for the varied terms and features of MCAs across the market.

Several states have already implemented disclosure requirements for sales-based financing, which the Bureau cited as providing "key protections for users of MCAs."

The proposal makes few other significant changes. The origination threshold for covered lenders would rise from 100 to 1,000 transactions. The definition of "small business" would narrow from $5 million in gross annual revenue to $1 million. The LGBTQI+-owned business data point would be removed, as would requirements to report denial reasons and pricing information.

The single compliance date would be January 1, 2028.

Comments are due December 15, 2025.

There's uncertainty hanging over the proposal. On November 11, the DOJ notified federal courts that the CFPB anticipates exhausting available funds in early 2026, based on an Office of Legal Counsel opinion about Federal Reserve transfers. 

The Bureau expects to continue normal operations through December 31, 2025, but a funding lapse could pause most rulemaking and enforcement.

Congress Bans 95% of the Hemp Industry

On November 12, Trump signed the legislation that ended the longest government shutdown in U.S. history. 

Tucked inside was a provision that effectively bans most hemp-derived THC products.

The change is technical but devastating.

The 2018 Farm Bill defined legal hemp as cannabis containing less than 0.3% Delta-9 THC by dry weight. That concentration-based definition created what industry observers call a loophole - products could contain significant amounts of other intoxicating cannabinoids like Delta-8 THC as long as Delta-9 stayed below the threshold.

The new law changes the definition to a total-amount basis: no more than 0.4 milligrams of THC per container.

For context, a typical hemp gummy contains 2.5 to 10 milligrams of THC.

"In effect, this is a total, all out, complete ban on hemp products in the United States," Jonathan Miller, general counsel for the U.S. Hemp Roundtable, told CNBC.

Industry sources estimate 90-95% of current hemp products will become illegal when enforcement begins in November 2026. The national intoxicating hemp market is worth approximately $28 billion. Some 300,000 jobs have emerged in the sector since 2018.

Senator Rand Paul, R-Ky., called it "the most thoughtless, ignorant proposal to an industry that I've seen in a long, long time."

Senator Mitch McConnell, R-Ky. - who championed hemp legalization in the 2018 Farm Bill - inserted the provision. He argued it restores the original intent of the law and would "keep these dangerous products out of the hands of children."

Thirty-nine state attorneys general signed a letter supporting federal restrictions on intoxicating hemp products. Public health officials have raised concerns about the lack of oversight and regulation in the market.

The hemp industry has one year before enforcement begins. 

The U.S. Hemp Roundtable has reframed its mission: "365 days to regulate, NOT ban."

Some products remain legal: industrial hemp for fiber and textiles, non-intoxicating CBD products with minimal THC, and hemp used in FDA-approved drug trials. But the market for Delta-8 gummies, THC drinks, and similar products - the growth engine of the post-2018 industry - faces an existential threat.

DraftKings and FanDuel Quit Their Trade Group for Prediction Markets

On November 17-18, the two largest U.S. sports betting operators resigned from the American Gaming Association and surrendered their Nevada gaming licenses.

The reason: prediction markets.

Prediction markets allow users to trade contracts based on the outcome of future events. 

Unlike traditional sportsbooks, which are regulated state-by-state under gaming laws, prediction markets operate under federal oversight from the Commodity Futures Trading Commission. 

They're classified as financial instruments, not gambling.

The distinction matters enormously.

Traditional sports betting is legal in roughly 38 states. Each requires a state gaming license, subjects operators to state gaming taxes, and mandates responsible gambling requirements. Major markets like California, Texas, and Florida remain closed.

Prediction markets, under CFTC regulation, can operate in all 50 states. 

No state gaming taxes. Minimal responsible gambling requirements. Access to the largest populations in the country.

Kalshi, the prediction market leader, was valued at $5 billion in October after raising $300 million in a Series D round led by Andreessen Horowitz and Sequoia Capital. That's up from $2 billion just four months earlier. Weekly trading volume now exceeds $1 billion, with an annualized run rate of approximately $50 billion. Sports markets account for 70-80% of total volume.

Polymarket, a competing platform, received a $2 billion investment from Intercontinental Exchange - the parent company of the New York Stock Exchange - pushing its valuation to approximately $8-9 billion.

FanDuel plans to launch FanDuel Predicts in December through a partnership with CME Group, the world's largest derivatives exchange. DraftKings acquired CFTC-certified platform Railbird and plans to launch DraftKings Predictions in early 2026.

Both companies say they will not operate prediction markets in states where sports betting is legal and will geofence tribal territories.

The AGA has been lobbying against prediction markets, arguing they bypass state gaming taxes and lack consumer protections. Nevada regulators told both companies their prediction market plans were "incompatible" with holding state gaming licenses.

"It has been made clear to the Board that Flutter Entertainment/FanDuel and DraftKings intend to engage in unlawful activities related to sports event contracts," the Nevada Gaming Control Board stated.

Rather than abandon prediction markets, both companies chose to leave Nevada and the AGA.

The split shows a growing divide in the gaming industry. 

Legacy casino companies like Caesars, MGM, and Penn Entertainment have not entered prediction markets. 

Digital-first operators like DraftKings, FanDuel, PrizePicks, and Underdog are racing into the space.

Both companies remain members of the Sports Betting Alliance and will continue lobbying for traditional sports betting legalization. They're not abandoning their core business - they're adding a parallel line that operates under entirely different rules

What This Means

For operators tracking the regulatory landscape, here are the dates that matter:

December 5, 2025: SBA lenders must complete debanking identification and reinstatement efforts

December 15, 2025: CFPB comment period closes on Section 1071 MCA exemption

December 29, 2025: FDIC/OCC comment period closes on reputation risk prohibition

January 5, 2026: SBA lender compliance reports due

February 3, 2026: Treasury comprehensive anti-debanking strategy due

November 2026: Hemp THC ban enforcement begins

November 2025 produced regulatory outcomes that seem to contradict each other.

Banks are being ordered to reconsider customers they previously rejected - but not cannabis or hemp businesses. The CFPB is backing away from regulating merchant cash advances - but cannabis still can't access SBA loans. Two of the largest gaming companies found a path to operate nationally through federal regulation - while another industry just watched federal law eliminate 95% of its market.

The through-line isn't coherence. It's fragmentation.

Different agencies with different mandates moving in different directions. State regulation and federal regulation offering different access. One door closing while another opens.

For operators in high-friction industries, the environment isn't getting simpler. Understanding which frameworks apply - and which doors are actually opening - matters more than ever.

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