Welcome to the September 2025 edition of the Freshfields FS Insights newsletter, which contains a selection of thought leadership related to the financial services industry published over the past month by Freshfields lawyers from around the world.

Motor finance and consumer redress

Motor finance: what now?

On 1 August 2025, the UK Supreme Court overturned the Court of Appeal’s decision in Hopcraft v Close Brothers Limited, Johnson v FirstRand Bank Limited, and Wrench (Respondent) v FirstRand Bank Limited. The Court’s decision created general relief in the financial services industry, particularly for car dealers who provide credit broking services and for lenders. The Court held that car dealers do not typically owe fiduciary duties in their credit broking activity, and lenders are therefore far less likely to face claims for bribery or dishonest assistance in breach of fiduciary duty. However, the judgment leaves some residual concern, because the emphatic conclusion that there had been an unfair lending relationship in the Johnson case made clear that lenders may still face significant liability relating to motor lending, which is not confined to discretionary commission arrangements (DCAs). 

The Financial Conduct Authority (FCA) seems to have understood that concern and tried to respond to and contain it with its announcement on 3 August that it intends to consult on a consumer redress scheme, with the consultation to be published by early October 2025 and remain open for six weeks. 

For more information, see our blog post.

UK competitiveness and growth

Freshfields webinar—The UK government’s new financial services strategy: a catalyst for growth?

On the evening of Tuesday 15 July 2025, the Chancellor of the Exchequer, Rachel Reeves, delivered her second Mansion House speech, in which she set out the government’s plans to “regulate for growth and not just for risk”. Earlier in the day, the government had published its Financial Services Growth and Competitiveness Strategy, along with a wide-ranging package of reforms to financial services regulation, dubbed the “Leeds Reforms”. For more information, see our blog post. On 23 July 2025, Freshfields hosted a live one-hour webinar in which a panel of senior lawyers with expertise in financial services regulation, pensions, and competition law analysed the government’s growth strategy, its plans to overhaul the pensions industry, and what this means for financial institutions, consumers, employees and the economy. A recording of this webinar is available here.

This webinar is part of our ongoing series on global trends in financial services and regulation. Please get in touch with your usual Freshfields contact if you would like to suggest topics for future webinars.

CRD 6 and third-country branches

Consultation on revised guidelines on internal governance – impact on third-country branches

On 7 August 2025, the European Banking Authority (EBA) published its consultation on revised guidelines on internal governance under Directive 2013/36/EU (CRD 4). The draft guidelines aim to reflect the changes brought by Directive (EU) 2024/1619 (CRD 6), to ensure alignment with Regulation (EU) 2022/2554 (DORA) and take into account the findings of the EBA’s Final Report of December 2023 on the guidelines on benchmarking of diversity practices, including diversity policies and gender pay gap, under Directive (EU) 2019/2034 (IFD). The draft guidelines also consider the lessons learned from supervisory practices across the EU.

CRD 6 is part of the so-called EU banking package and addresses, among others, supervisory powers, sanctions and ESG risks. A key aspect of CRD 6 is the introduction of a new and harmonised regime for the establishment and supervision of third-country branches. For an overview of the key requirements that the draft guidelines provide in relation to the internal governance arrangements of TCBs, see our blog post.

Road to CRD 6 – Good things come to those who wait – or do they? The German implementation of Article 21c

The long awaited and highly anticipated German draft act for the implementation of CRD 6 was finally published by the German Ministry of Finance on 22 August 2025. For an overview of the key requirements that the German draft act provides for with respect to TCBs, see our blog post.

Trump administration

Executive order targets “politicized” financial services

On 7 August 2025, President Trump issued a new Executive Order (EO), “Guaranteeing Fair Banking for All Americans,” that directs at least 10 federal financial regulators to root out so-called “politicized or unlawful debanking” practices across the financial sector. Additionally, the EO mandates those regulators identify and, if appropriate, punish companies that have engaged in politicized or unlawful financial services activities. 

The EO has roots in years of scrutiny from Congress, state attorneys general, and others into alleged instances of financial services firms debanking and/or denying services to individuals and businesses based on the individuals’ and businesses’ perceived political or religious beliefs, as well as engagement in certain industries, such as digital assets, firearms sales, and oil and gas companies, which may be perceived as “disfavored” by banking and financial services regulators. 

By bringing the entire federal financial regulatory apparatus to bear on the issue of “debanking,” the administration is flipping the script: the EO signals a new era of federal oversight with close coordination between regulators and senior White House officials, and possibly an enduring feature of this administration’s policymaking efforts.

For more information, see our blog post.

Financial crime

Major court victory for international banks: What you need to know

In July 2025, the U.S. Court of Appeals for the Second Circuit handed international banks a significant victory in Ashley v. Deutsche Bank Aktiengesellschaft, affirming the dismissal of Justice Against Sponsors of Terrorism Act (JASTA) claims against three international banks. The decision provides crucial guidance for financial institutions facing terrorism-related litigation and clarifies the boundaries of secondary liability under JASTA. However, the result does not provide banks complete immunity—cases involving clear evidence of intent to facilitate terrorism will likely face different outcomes. For more information, see our blog post.

Financial crime reforms: Creating new risks and challenges for firms

The Economic Crime and Corporate Transparency Act has introduced a novel failure to prevent fraud offence, as well as extending the criminal attribution doctrine to hold large firms liable for the actions of a wider range of senior managers. In this article, Piers Reynolds and Laura Feldman from our London Financial Services Disputes team consider these reforms as well as areas of uncertainty and new risks, concluding with some practical guidance. This briefing was originally published in Butterworths Journal of International Banking and Financial Law on 1 July 2025.  

Sustainability and ESG

Omnibus in action: What it means for corporations in Germany and Italy

The European Union’s approach to corporate sustainability regulation has entered a period of profound reassessment. In response to practical experience and mounting concerns over regulatory complexity, 2025 has seen the introduction of the Commission’s so-called Omnibus Proposals – legislative packages aimed at streamlining and recalibrating the EU’s existing sustainability framework (for more details see our previous blogposts on the Omnibus Proposals here and the Council’s agreement here).

At the core of the packages are targeted revisions to four key instruments:

• the Corporate Sustainability Reporting Directive (CSRD);
• the Corporate Sustainability Due Diligence Directive (CSDDD);
• the Carbon Border Adjustment Mechanism (CBAM); and
• the EU Taxonomy Regulation.

Collectively, these reform proposals move towards greater clarity, proportionality, and consistency – raising thresholds for applicability, extending deadlines, and reducing duplication. While regulatory simplification is the guiding principle, the changes create significant compliance implications for businesses in Europe, especially as national rules in major economies like Germany and Italy interact with the revised EU landscape.

For an analysis of the principal features of the Omnibus Proposals, including a consideration of their impact on companies in Germany and Italy as examples, see our blog post, which highlights priorities and strategic considerations for building a resilient compliance framework.

The end of the road for a UK Green Taxonomy

On 15 July 2025, the government confirmed that it will not proceed with a UK Green Taxonomy (the UK Taxonomy), marking the end of a number of years of deliberation on this as a potential initiative to help to deliver the government’s green goals. The UK Taxonomy proposals would have introduced a classification tool providing a framework to define which economic activities support climate, environmental or wider sustainability objectives. Following a consultation in November 2024, the government has concluded (in its response to the consultation) that a UK Taxonomy would not be the most effective tool to deliver the green transition and should not be part of the UK’s sustainable finance framework. For more information, see our blog post.