Call it the regulatory paradox: Though federal enforcement actions dropped in the first half of 2026, the total dollar value of all penalties leveled actually ticked up.
How does that happen? According to the latest Regulatory Violations Intelligence Index report issued by Wolters Kluwer, state regulators and private litigation likely played a role.
“The H1 2026 data hardens a pattern first visible in 2025: federal enforcement has narrowed to a handful of high-materiality matters while the center of gravity has shifted decisively toward the states and the plaintiffs’ bar,” the report stated. “Federal-level matters accounted for just 16 of the 128 index violations this period — roughly half their H2 2025 count — and only seven of those originated with a federal agency.”
Per Wolters Kluwer research, the total number of violations issued in the first half of 2026 ticked down 3% to 128. But penalty amounts grew by a whopping 117% over the same period, hitting $1.42 billion. The company’s index tabulates actions taken by federal agencies such as the Securities and Exchange Commission, as well as those by state authorities and instances of private litigation.
The report breaks down violations across three main areas: consumer protection-related cases, competition-related cases and broader financial regulatory cases. The first two categories saw decreases in the first half of 2026, with consumer-related cases falling 7% and competition-related cases declining 100%. Only financial regulation-related cases, which grew 25%, were the only kind to increase over the tracked period.
“Federal financial oversight in the first half of 2026 continued to reflect the administration’s deregulatory posture, with federal agencies emphasizing supervisory streamlining, reduced compliance burdens, and a more constrained view of regulatory intervention,” the report said.
That’s not to say all regulatory activity has vanished. Facing a patchwork of state-by-state regulations, companies and finance departments may face an even more complicated landscape going forward.
“For firms, that’s going to mean their exposure analysis needs to be broader, and to reflect their relevant jurisdictions and all various roots to enforcement, not just the federal,” said Elaine Duffus, senior specialized consultant with Wolters Kluwer’s financial services compliance program management solutions team, in an interview with CFO.com on Tuesday.
In her view, the changes mean that finance and legal teams face a new pressing question: “Are you going to have one enterprise standard or different practices by jurisdiction?”
“The cost and the controls and rationale for that choice firmly belong in the CFO’s discussion,” Duffus said.
One possible solution is to adapt to the most stringent regulatory standard among states. That could help ensure businesses meet requirements across multiple jurisdictions, Duffus said.
The changing regulatory landscape also means that finance chiefs will need to be even more aligned with their compliance counterparts than they may have been in the past.
As the report puts it: “Compliance programs calibrated primarily to federal examination cycles should re-weight monitoring toward state insurance and securities regulators, coordinated multistate attorneys general campaigns, and private litigation exposure.”
It’s also an open question whether regulatory activity will remain the same over the remainder of 2026. Just last week, the Treasury Department announced more than $1.2 billion in penalties against Bank of America. It’s a reminder of the role finance departments ultimately play in the larger regulatory compliance picture.
“Who was at the table when conversations were being had about consistently failed controls and things like that?” Duffus said of the Bank of America case. “Does the CFO have a dog in that fight? I would argue yes, a big one.”
