Fintech Insurance Gets a Tailwind: What the CFPB’s Retreat Means for D&O and Tech E&O Buyers

Steven Barge-Siever, Esq.
May 31
3 min read

By Steven Barge-Siever, Esq.

Founding Partner, Upward Risk Management

CFPB pulls back from Fintech enforcement actions

In 2025, the Consumer Financial Protection Bureau (CFPB) made a decisive pivot. After years of expanding its reach into fintech and nonbank financial oversight, the Bureau is pulling back.

Federal supervision is now focused squarely on big banks, not fintech platforms, peer-to-peer lenders, or digital wallets.

That shift has immediate implications not just for internal compliance teams, but also how insurers view fintech risk - and how they price it.

If you're a CFO or General Counsel navigating the evolving risk landscape of a growth-stage fintech, this is a rare window of opportunity: insurance markets are softening, regulatory-driven exposures are declining, and now is the time to optimize your Directors & Officers (D&O) and Technology Errors & Omissions (Tech E&O) programs.

1. Regulatory Pullback = Lower Claims Frequency & Fintech Insurance Premiums

The CFPB has issued internal directives to scale back exams, shift enforcement to state regulators, and focus only on tangible consumer harm. That means:

Fewer investigations
Fewer enforcement actions
Fewer named executive probes

These events have historically driven costly D&O and E&O claims. As they recede, so does one of the most volatile pricing factors in fintech insurance underwriting.

2. D&O Insurance: Better Terms for Executives

Lower enforcement risk is reshaping D&O underwriting in real time.

Premium Relief: After years of hardening rates, many fintechs should expect downward pressure on pricing, particularly for companies viewed as higher risk for regulatory proceedings.
Broader Coverage: With lower scrutiny from federal regulators, insurers are less inclined to load policies with exclusions or inflated retentions.
Capital Market Benefits: For later stage fintechs, stronger D&O programs improve investor optics - especially when raising capital or negotiating credit facilities. A well-structured policy communicates maturity and mitigates governance risk.

3. Tech E&O: Expanded Flexibility and Customization

As regulators back off fintech innovation, the Tech E&O market is following suit.

Lower Rates, Fewer Exclusions: With fewer government investigations into product functionality or customer impact, insurers are relaxing regulatory carve-outs and pricing in less risk.
Tailored Language: Fintechs can now negotiate more precise policy terms—especially those with embedded AI, data aggregation, or middleware functions—without being lumped into “financial institution” risk pools.

4. Stay Proactive - State Oversight Is Rising

Let’s be clear: risk hasn’t disappeared. It’s moved.

State attorneys general and financial regulators are already stepping up to fill the void. California, New York, and Massachusetts continue to scrutinize fintechs on issues like:

Data privacy
Fee transparency
Algorithmic bias

Insurers know this. So even in a softening market, buyers who demonstrate robust compliance protocols - especially state-by-state - continue to unlock the best pricing and terms.

5. What Smart Fintechs Should Do Now

CFOs and GCs have a window to act.

Review & Renegotiate: If your D&O or Tech E&O policies were placed in a harder market, revisit them now. Many policies contain restrictive language that no longer reflects the current regulatory risk.
Align Coverage: Ensure your D&O and E&O are coordinated - especially around investigation costs, regulatory exclusions, and third-party liability triggers.
Document Your Story: Insurers reward documentation. If you’ve improved governance, compliance, or vendor oversight, bring that to the table at renewal.

Bottom Line

The CFPB’s regulatory retreat is more than a policy shift - it’s a signal to the insurance market.

For fintechs, that means a buyer’s market catalyzed from lower claims risk, broader protection, and more negotiating power - if you know how to use it.

Read more from our Fintech Insights Database here.