With the Trump administration’s Consumer Financial Protection Bureau shrinking from prior efforts to put guardrails on new payments tools, states may be in the hot seat to oversee them and protect consumers.

As fintechs and legacy players increasingly sell all kinds of novel payments plays to consumers for which there are few, if any, regulatory standards — such as buy now, pay later, earned wage access and stablecoins – states may face pressure to ensure their residents can use the services safely.

Former CFPB leadership may have caught a glimpse of the changing climate in its crystal ball when it issued this statement in January, a week before Trump’s inauguration: “Over the last century, in response to evolving markets, states have refreshed the core standards of fair dealing that form the bedrock of consumer protection law. States should once again refresh their (unfair or deceptive acts or practices) statutes to address the challenges of the modern economy.”

Since then, the Trump administration has dismissed CFPB workers and ditched the lawsuit against Early Warning Services over fraud on its Zelle peer-to-peer tool. The Republican-controlled Congress is also moving toward overturning a rule that would let the agency police big technology companies’ payment apps.

Actually, states have already been answering the call to action in payments in recent years, doing so in their usual patchwork fashion. Some have had a lighter touch, while others have taken a more restrictive approach.

For instance, Utah this month became one of a pack of states whose legislatures have passed laws curbing earned wage access services, with at least 16 introducing legislation. While Utah’s governor hasn’t signed the bill yet, several states have enacted such laws. While that qualifies as a trend, 34 states have yet to act, so that leaves room for plenty more action on the EWA front.

So far, the payments industry has cheered state earned wage access legislative moves, like Utah’s, that essentially call for registering EWA providers, but it has also lamented states, such as California, that followed the CFPB in labeling some EWA services as loans, subject to lending laws.

At least one state, New York, has also targeted buy now, pay later financing for oversight. And some of them, including New York and Wyoming, have been ahead of the federal government and leading the way on new legislation and regulatory frameworks related to stablecoins, Cato Institute Director Jennifer Schulp told me earlier this month.

“I expect the states to kind of take, as the states often do, a number of different approaches to picking up what they may perceive to be slack from the federal regime,” she said in an interview.

It’s worth noting that some states have also recently marched into new regulatory territory with respect to well-worn payments tools. For instance, Illinois enacted a new law last year excluding interchange fees on taxes and tips for any credit card transaction.

The increased state legislative and regulatory activity are worrying some law firms’ corporate clients who don’t know what to expect from the states. One law firm, Ballard Spahr, was riled enough to take action. Last month, it formed a state attorneys general consumer response team to handle such concerns.

While an array of different state regulatory tacks can sometimes result in an experimental field that bubbles up the best practices, such varied paths can also create a tangled nationwide web of compliance requirements. 

Payments entrepreneurs and executives may eagerly embrace states’ divergent ways of handling their emerging financial tools. Companies that have sought state money transmitter licenses, including X, can attest to the cost and challenges of doing so state by state. 

Or maybe payments players will end up longing for the days when they were able to work with a single federal overseer. With 50 states, you never know for sure what you’ll get — except 50 different ways of doing business.