FTC GUIDANCE STILL BANS THIRD-PARTY LEAD GENERATION: Just a Reminder the TSR Still Requires Consent “Directly” From the Consumer for Prerecorded Marketing Calls [Video]
So one of the biggest shifts coming out of the Biden-era FTC was the focus on telemarketing arising out of “consent farm” lead generation tactics.
The “telemarketing sweep” back in July, 2023 caught call center operators and lead generators unaware when the FTC suddenly began enforcing newly-adopted positions on the Telemarketing Sales Rule.
Most problematically was the idea that consent had to be obtained “directly” from a consumer by a seller and on a one-to-one basis.
I had a little chat with the FTC back in 2023 and the agency mostly backed off pursuing lead generators and marketers after my comments on behalf of R.E.A.C.H.:
Nonetheless, the new TSR directive was soon mirrored by the FCC in a rule that would have expanded the TCPA–but that was famously struck down by the Eleventh Circuit Court of Appeals and is dead (at least for now.)
However, the FTC continues to take the position that all prerecorded marketing calls–including AI and prerecorded voicemails– can only be made with one-to-one consent obtained DIRECTLY by a seller (i.e. no lead generation allowed).
Here’s the key language from the FTC’s “business guidance” website:
Does a consumer’s written agreement to receive prerecorded message calls from a seller permit others, such as the seller’s affiliates or marketing partners, to place such calls? No. The TSR requires that the written agreement identify the single “specific seller” authorized to deliver prerecorded messages. The authorization does not extend to other sellers, such as affiliates, marketing partners, or others.
May a seller obtain a consumer’s written permission to receive prerecorded messages from a third-party, such as a lead generator? No. The TSR requires the seller to obtain permission directly from the recipient of the call. The seller cannot rely on third-parties to obtain permission.
Pretty clear. And pretty deadly.
Under the TSR companies CANNOT use prerecorded, artificial voice or AI outbound calls or messages unless they received one-to-one consent “Directly” from the consumer.
Eesh.
Now the TSR gets much less attention than the TCPA because only the FTC can enforce the TSR and, well, not too many people expect Trump’s FTC to do much (anything?) around enforcement.
But “robocalls” may be the one place where the FTC bucks the trend and becomes somewhat active, so we will need to be mindful here.
Bottom line– although the TSR itself does not expressly require one-to-one consent the FTC’s formal guidance continues to so direct. So be careful out there.
The New Alien Registration Requirement
With the exception of two much earlier schemes – the Alien Registration Act of 1940, which registered 6 million noncitizens during World War II, and the National Security Entry-Exit Registration System (NSEERS), which operated briefly after the 9/11 attacks – the term “registration” in the U.S. immigration system has been applied, in practice, only to the process of applying for permanent residence. In fact, the green card is officially called an “Alien Registration Card” or “Alien Registration Receipt Card.”
On February 25, 2025, the Department of Homeland Security announced a new scheme, the Alien Registration Requirement, that applies the term much more broadly by requiring all noncitizens in the United States to register. The announcement lists categories of people, lifted directly from a 1960 regulation, who are deemed to already be registered. These are people who have green cards, parole, I‑94s, visas, EADs or Border Crossing Cards, anyone in removal proceedings, anyone who has filed a form associated with lawful permanent residence, and anyone who has been fingerprinted for another benefit such as DACA or Temporary Protected Status.
Under the Alien Registration Requirement, those who do not meet pre-registration criteria must file a new form, which has not yet been released, by creating a myUSCIS online account. At this time, there appears to be no alternate procedure for those who do not have internet access. There are no exceptions to the requirement based on advanced age or youth: parents and guardians must register on behalf of unregistered children under age 14.
The new registration form is likely to contain, at a minimum, the questions prescribed in 8 USC §1304, “Forms for registration and fingerprinting,” which include:
Date and place of entry
Activities in which the individual has been and intends to be engaged
Length of time expected to remain in the United States
Police and criminal record, if any
Although details are not yet available, there is likely to be a deadline to register. Registrants will certainly be required to attend biometrics appointments, and some – possibly based on answers they provide on the form – may be required to report for in‑person interviews. Although DHS says registrants will receive evidence of compliance that they can keep and present when required, it is also highly likely that any undocumented immigrant who complies may be detained and subject to removal.
In addition, all children who reach age 14 in the United States, whether they already hold registration evidence or not, must re-register on their own account within 30 days of their 14th birthdays to be fingerprinted. Presumably, this provision is included because fingerprints are waived for children under age 14 who apply for U.S. visas, green cards, parole, or other benefits that qualify as registration and, it appears, will also be waived for these children under the new system.
The law has always required that children who become permanent residents apply to replace their green cards within 30 days of reaching age 14 (unless the card will expire before their 16th birthday) for the express purpose of being fingerprinted. The provision is essentially unenforceable and no penalty is routinely levied for noncompliance even when the child later applies to replace their green card, which must be renewed every 10 years.
The new registration scheme cites “criminal and civil penalties, up to and including misdemeanor prosecution and the payment of fines” for noncompliance with any of its provisions.
Under existing law, since 1952, it has been a misdemeanor to “willfully fail” to register, carrying monetary penalties of up to $1,000 and/or 6 months in jail, although no specific registration requirement has been established.
The law also already requires noncitizens age 18 and over to carry their “certificate of alien registration” or “alien registration receipt card” at all times or be subject to prosecution, fines up to $100, and/or 30 days’ jail time. More than 3 million nonimmigrants are estimated to be in the United States on tourist, student and work visas. It’s unlikely that many of them carry their passports with visas or their I‑94 admission records as they go about their daily lives. By the same token, an estimated 13 million permanent residents are unlikely to carry their green cards to work, college, or out shopping every day. These are all valuable legal documents that are expensive, difficult and time consuming to replace.
Another provision, also from the 1950s, levies a $200 fine and/or 30-day sentence for not filing a change-of-address notice within 10 days of each residential move – something even people with green cards are required to do, and routinely do not.
These penalties, like the “registration” statutes and regulations, have been on the books for decades but not routinely enforced. Many may assume the new Alien Registration Requirement does not apply to them but only to those who are unlawfully present in the country. However, the Executive Order on which the requirement is based directs federal agencies to make compliance with all of its provisions an “enforcement priority,” requiring action from those who are lawfully present as well.
Nonimmigrants and permanent residents over age 18 must now weigh the legalities and risks of not carrying their registration evidence on their persons. This includes travelers from Visa Waiver Countries who arrive on ESTA and remain in the country for more than 30 days. All nonimmigrants are also well advised to check whether their children have turned age 14 since they were last issued an I-94, a visa, or a green card.
Trump Administration Initiates Section 232 Review of Copper Imports
Copper is used extensively in the electronic goods sector from transformers to radios and TVs but is also a critical component in wiring, alternators, radiators, industrial machinery, and electrical motors.
The U.S. produces about half of the refined copper it consumes each year. The rest is imported primarily from Canada, Mexico, Chile, and Peru. In addition, in 2024 the U.S. imported more than $507 billion in copper products from China including copper tubes/pipe fittings, plates, sheets, wires, and other products.
Because copper is a key component in many different manufacturing applications, any market disruptions or distortions could have an impact on a company’s processes, pricing, and supply chain.
On February 25, 2025, President Trump signed an executive order (EO) titled, “Addressing the Threats to National Security from Imports of Copper.” The White House also issued a Fact Sheet on the issue. The EO directs the Secretary of Commerce to initiate an investigation “under section 232 of the Trade Expansion Act to determine whether imports of copper, scrap copper, and copper’s derivative products threaten to impair national security.”
The secretary is directed to consult with other departments, and to submit a report of his findings to the president within 270 days. Under the standard process for Section 232 investigations, the president will have 90 days to review the secretary’s report and determine whether he will take any action to adjust the import of these products.
The EO specifies that the secretary is to investigate the effects on natural security of the imports of copper in all forms, including but not limited to:
Raw mined copper
Copper concentrates
Refined copper
Copper alloys
Scrap copper
Derivative products.
The secretary is also directed to examine several trade-related issues, including but not limited to those related to:
Current and projected demand
Domestic capacity and potential capacity
Foreign government subsidies, including dumping and state-sponsored overproduction
The ability of foreign governments to weaponize control over refined copper supplies through export restrictions
Risks associated with the concentration of U.S. copper imports from a small number of suppliers
The Fact Sheet notes the crucial role that copper plays in defense applications, infrastructure, and emerging technologies. It also notes that U.S. imports of copper have risen from zero in 1991 to 45% of consumption in 2024, that China controls over 50% of global smelting, and that the U.S. isn’t even in the top five nations for smelting capacity.
The implementing notice from the secretary’s office should be released in the near future with details on scoping, interagency coordination, comment due dates, etc.
CTA Is Pausing Fines, Penalties and Enforcement Actions Regarding Filing of Beneficial Ownership Information Reports
Below is a statement from the Financial Crimes Enforcement Network (FinCEN) released February 27, 2025 stating it will not take any enforcement action against a Reporting Company that fails to file or update a beneficial ownership information report per the Corporate Transparency Act, pending the release of a new “interim final rule.” FinCEN intends to issue this interim final rule (which will extend the reporting deadline) prior to the current reporting deadline of March 21, 2025. We will continue to monitor for updates. For now, however, failure to file will not result in fines, penalties or any other enforcement actions.
FinCEN Not Issuing Fines or Penalties in Connection with Beneficial Ownership Information Reporting Deadlines
Immediate release: February 27, 2025
WASHINGTON –– Today, FinCEN announced that it will not issue any fines or penalties or take any other enforcement actions against any companies based on any failure to file or update beneficial ownership information (BOI) reports pursuant to the Corporate Transparency Act by the current deadlines. No fines or penalties will be issued, and no enforcement actions will be taken, until a forthcoming interim final rule becomes effective and the new relevant due dates in the interim final rule have passed. This announcement continues Treasury’s commitment to reducing regulatory burden on businesses, as well as prioritizing under the Corporate Transparency Act reporting of BOI for those entities that pose the most significant law enforcement and national security risks.
No later than March 21, 2025, FinCEN intends to issue an interim final rule that extends BOI reporting deadlines, recognizing the need to provide new guidance and clarity as quickly as possible, while ensuring that BOI that is highly useful to important national security, intelligence, and law enforcement activities is reported.
FinCEN also intends to solicit public comment on potential revisions to existing BOI reporting requirements. FinCEN will consider those comments as part of a notice of proposed rulemaking anticipated to be issued later this year to minimize burden on small businesses while ensuring that BOI is highly useful to important national security, intelligence, and law enforcement activities, as well to determine what, if any, modifications to the deadlines referenced here should be considered.
Alexander Lovrine and Walter Weinberg contributed to this article.
USPTO Show Cause Order to Cancel More Than 40,000 China-Originated Trademark Registrations, Shenzhen Responds
In a February 24, 2025 Show Cause Order against Shenzhen Seller Growth Network Technology Co., Ltd. et al., the United States Patent & Trademark Office (USPTO) announced that about 42,000 trademark registration decisions might be vacated and the application or post-registration proceedings reopened for a new determination to be made. For an initial registration decision, the registration will be cancelled and restored to pendency under its application serial number. The reopened proceeding is a proceeding that may be subject to termination.
The USPTO stated the “integrity of the USPTO’s examination and decision-making processes were tainted at their core and the USPTO’s registration decisions were premised on false representations and assumptions.”
This show cause order supplements two prior show cause orders dated September 7, 2022 and November 27, 2023. In the first show cause order, the USPTO stated that Seller Growth practiced “unauthorized practice before the USPTO in trademark matters and providing false, fictitious, or fraudulent information in trademark submissions with the intent to circumvent these rules.”
The USPTO also stated, “that the evidence indicates that Respondents are not qualified practitioners under 37 C.F.R. §§ 11.1 and 11.14, yet still engaged in the unauthorized practice of law through the use of names and bar credentials of U.S.-licensed attorneys, intentionally provided for the purpose of concealing Respondents’ involvement and circumventing USPTO rules.” Further, “Respondents’ efforts to mask their participation in the unauthorized practice of law include improperly entering the electronic signatures of at least three U.S.-licensed attorneys and providing false, fictitious, and/or fraudulent attorney information in trademark filings in violation of USPTO Rules.”
At the time, Seller Growth responded that
The USPTO is currently conducting a routine review of the trademark agency industry in China. As the largest international intellectual property SaaS platform in China, our company has been listed in the first batch of inquiries to undergo routine review. It is currently undergoing a normal review, and there is no so-called sanctions by the USPTO, and the relevant rumors are all rumors.
This inquiry will not have any impact on the customers we have served and future customers. Trademarks can continue to be used normally.
Maliciously spreading rumors and smearing our company has seriously damaged the legitimate rights and interests of our company. Please stop the rumors and slander immediately and delete the untrue information that has been released. Otherwise, our company will take legal measures to pursue it to the end.
Seller Growth’s 2022 Online Response – Nothing to Worry About
On February 28, 2025, the Shenzhen Intellectual Property Protection Center provided advice for those affected:
Recently, the Shenzhen Intellectual Property Protection Center (hereinafter referred to as the “Shenzhen Protection Center”) monitored an incident of suspected illegal agency for U.S. trademark applications .
On February 24, 2025, the United States Patent and Trademark Office (hereinafter referred to as the “USPTO”) issued a supplementary order to show cause and a notice that the USPTO proposes to reconsider its registration decision on its official website (SUPPLEMENTAL ORDER TO SHOW CAUSE AND NOTICE THAT THE USPTO PROPOSESTO RECONSIDER ITS REGISTRATION DECISIONS), accusing Shenzhen Seller Growth Network Tech. Co., Ltd. and two affiliated companies (1, Shenzhen Qianhai Bishengdao; 2, Shenzhen Qianhai Be-Victory Network Tech. Co., Ltd.) [The English names of the two companies are actually different English translations of the same entity, and have now been renamed Chenhaiyun (Shenzhen) Technology Co., Ltd.] (hereinafter referred to as the “involved institutions”) of circumventing due review procedures through improper means such as forging signatures and providing false attorney information, in violation of U.S. trademark law.
I. Basic Situation of the Incident
The USPTO notified the relevant institutions and enterprises that own the trademarks involved through a supplementary order to show cause that it plans to cancel the registration status of the relevant trademarks in the administrative sanctions procedure against the relevant institutions. The application dates of the trademarks involved in this case span the period from 2010 to 2023, involving 41,741 trademarks. At the same time, this supplementary order to show cause set a deadline (March 26, 2025), requiring the relevant entities to provide written evidence and responses to the preliminary sanctions, otherwise they may face cancellation procedures. The list of trademarks involved is detailed in the attachment.
2. Response Strategies
The enterprises involved can check according to the attachments, assess risks, and take timely measures to avoid affecting normal operations and trademark layout. They can re-entrust qualified agencies to submit applications, but they must strictly comply with regulations and avoid providing false information. The trademark can be redesigned. If the resubmitted trademark application is consistent with the trademark involved, the USPTO may raise the review standards and extend the review period for such applications.
In addition, the companies involved can refer to the research reports and practical guidelines previously released by the Shenzhen Protection Center, such as the “U.S. Trademark Opposition and Revocation System”, “Amazon U.S. Trademark Registration Guidelines”, and “Cross-border E-commerce Intellectual Property Compliance Guidelines” to obtain more guidance information on trademark registration and protection.
III. Advice on Trademark Application in the United States
There are some differences between trademark applications in the United States and in China. When applying for a trademark in the United States, trademark applicants should pay attention to the following points:
First, carefully select the agency. It is recommended that enterprises entrust a formal and professional intellectual property agency to apply for overseas trademarks, or directly entrust an American lawyer to submit. Regardless of direct or indirect entrustment, you can search and query through the official US website to verify the true identity of the American attorney to prevent the risk of the US trademark being revoked due to non-compliance with the registration. The cost of US trademark application generally includes official fees, US attorney fees and agency service fees. Enterprises should not blindly choose an agency because of the low price.
Second, choose the application category reasonably. The US trademark classification is more detailed than that of China. Applicants should carefully choose the categories of goods and services. In the registration process and later maintenance, the submission of evidence of use is involved. If the company selects too many categories in the early stage and fails to provide evidence of use within the deadline, the trademarks in the relevant categories will face the risk of being revoked, thereby generating unnecessary layout costs. Therefore, companies should reasonably choose the categories of trademark applications based on their own business development plans.
Third, ensure that the evidence of use is in compliance with regulations. According to the regulations of the USPTO, evidence of use should be submitted 5-6 years after the trademark is authorized and when it is renewed after 10 years. It is recommended that enterprises retain the actual use evidence of all products and ensure that the trademarks to be submitted must be trademarks that are actually used or intended to be used. False evidence of use cannot be created for the purpose of saving money or speeding up, otherwise it will constitute a false application and increase the risk of trademark rejection or revocation.
If enterprises encounter the above-mentioned problems, it is recommended to understand and verify the relevant situation. If further guidance is needed or if there are any questions during this process, they can contact the Shenzhen Protection Center at any time.
The USPTO Show Cause Order is available here (English only). The Shenzhen Intellectual Property Protection Center’s advice can be found here (Chinese only).
Executive Order Introduces New Registration Requirements for Certain Noncitizens
On Jan. 20, 2025, the Trump administration issued an executive order entitled “Protecting the American People Against Invasion,” aimed at enhancing compliance with the Immigration and Nationality Act (INA) section 262. This statute outlines the mandatory registration and fingerprinting requirements for certain non-U.S. citizens who have not previously registered and who are staying in the country for extended periods.
Under INA section 262, all aliens 14 years of age or older who were not fingerprinted or registered when applying for a U.S. visa and who remain in the United States for 30 days or longer must apply for registration and fingerprinting. Parents and guardians must ensure that their children below the age of 14 are registered. Children must re-register and be fingerprinted within 30 days of their 14th birthdays.
The Department of Homeland Security (DHS) will introduce a new registration form and process to complete the registration requirement. While additional guidance has not been issued at the time of this blog, noncitizens who did not previously register must create a U.S. Citizenship and Immigration Services (USCIS) online account to facilitate the registration process starting Feb. 25, 2025. Once registered and fingerprinted (unless waived), DHS will issue evidence of registration, which noncitizens over the age of 18 must carry at all times. Failure to comply with these requirements will result in criminal and civil penalties, including misdemeanor prosecution and fines. Certain groups, such as American Indians born in Canada, are exempt from registration.
The executive order considers lawful permanent residents, noncitizens paroled into the United States (even if the parole period has expired), nonimmigrants with an I-94 or I-94W (even after their admission period has expired), noncitizens with immigrant or nonimmigrant visas issued before arrival, those in removal proceedings, individuals with employment authorization documents, those who applied for permanent residence (even if their applications were denied), and individuals issued Border Crossing Cards as registered for purposes of INA section 262. Noncitizens present in the United States without inspection and admission or inspection and parole, Canadian visitors who entered the country via land ports of entry and were not issued evidence of registration, and Deferred Action for Childhood Arrivals and Temporary Protected Status recipients who were not issued evidence of registration are considered unregistered and must comply with forthcoming guidance regarding registration.
The executive order specifically seeks to identify undocumented immigrants who were not inspected upon entry to the United States. Once the registration system takes effect, Immigration and Customs Enforcement agents and other law enforcement officials will be able to request evidence of registration from individuals within the United States. Failure to provide this evidence may result in detention and removal, though individuals may be deported even if they provide evidence of registration.
Potential Impacts of the Executive Order
The executive order may impact undocumented immigrants in the following ways:
Increased Enforcement: The order prioritizes the removal of non-citizens and expands the use of detention facilities. Undocumented immigrants may face detention and expedited removal processes.
Use of Military Forces: The order includes provisions for the use of military forces to support immigration enforcement activities, both at the border and within the country’s interior. This increases the manpower available for deportation operations.
Expedited Removal: The order prioritizes using expedited removal processes, which allow for quicker deportations without the need for lengthy court proceedings.
Revocation of Previous Policies: The order revokes previous executive orders that may have provided protections or slowed down the deportation process.
Additional Executive Authority: The declaration of a national emergency at the southern border unlocks additional executive authority and funding for border security and deportation efforts. This includes the use of Department of Defense resources to support immigration enforcement.
Registration Requirements: Undocumented immigrants must register and be fingerprinted if they remain in the United States for 30 days or longer. Failure to comply with these registration requirements may result in criminal and civil penalties, including fines and misdemeanor prosecution that may ultimately lead to removal processes.
Impact on Sanctuary Jurisdictions: The order restricts federal funding to sanctuary jurisdictions that do not cooperate with federal immigration enforcement. This may strain relationships between federal agencies and local governments, and potentially reduce resources available to undocumented immigrants in those areas.
Overburdened Systems: The increased enforcement and detention measures may overburden immigration detention centers and court systems, leading to delays and backlogs in immigration proceedings.
Potential Hardships: Enforcement policies may lead to humanitarian concerns, including family separations and detainee treatment.
Considerations for Noncitizens
Noncitizens present in the United States should consider taking steps to enhance compliance with the new executive order and immigration regulations, including the following:
Comply with Registration Requirements: Create a USCIS account as the executive order mandates.
Stay Informed and Monitor Policy Changes: Keep up to date with changes in immigration policies and executive orders that may affect their status.
Legal Updates: Follow updates and information disseminated from organizations and government agencies that specialize in immigration law.
Maintain Valid Documentation: Ensure that visas, passports, and any other immigration documents are valid and up to date. This includes renewing passports at least six months prior to expiration and keeping copies of all important documents.
SEC Provides Welcome Clarity Regarding Meme Coins
In welcome news, the US Securities and Exchange Commission (SEC) Division of Corporation Finance (Division) yesterday announced “[a]s part of an effort to provide greater clarity” that meme coins do not involve the offer and sale of securities under the federal securities laws. This is to say that transactions in meme coins (as defined below) do not need to be registered with the SEC, but also that buyers and sellers are not protected by federal securities laws. Importantly, the Division limited this interpretation to meme coins that match the following descriptions:
A type of crypto asset inspired by internet memes, characters, current events, or trends for which the promoter seeks to attract an “enthusiastic online community”
Similar to collectibles, meme coins are typically purchased for entertainment, social interaction, and cultural purposes, and their value is driven primarily by market demand and speculation
Meme coins typically have “limited or no use or functionality”
Because they are speculative in nature, meme coins tend to experience significant market price volatility, and often are accompanied by statements regarding their risks and lack of utility
Based on these descriptions, it is likely that some of the most popular meme coins (Dogecoin, Shiba Inu, Pepe, as well as the Official Trump and Official Melania coins) would be considered outside of the SEC’s jurisdiction when transacted in spot markets.
Inherently, by virtue of being classified as non-securities by the SEC, meme coins will generally be categorized as “commodities,” subject to the Commodity Exchange Act and the enforcement jurisdiction of the CFTC. As with other commodities, including wheat, copper, oil and bitcoin, the CFTC is authorized to prosecute manipulation and fraud in these markets, but does not have broader regulatory oversight as it does with derivatives markets.
That said, while the regulatory clarity provided by the SEC is highly anticipated and desired by the crypto industry, it is also worth noting that meme coins have already been considered by many to be “commodities.” Derivatives contracts on certain meme coins have been listed on CFTC-registered derivatives exchanges for some time suggesting that the CFTC, at least, already considers these to be within its purview.
The Division received a noteworthy statement of opposition from Commissioner Caroline Crenshaw, who posited that “the guidance offers no clear definition from law or even a basic dictionary” and called the value of the guidance “questionable.” In Commissioner Crenshaw’s view, the universe of meme coins is diverse, with a “continuum of offers and sales,” and the Supreme Court’s Howey test for investment contracts requires an individualized inquiry into each unique crypto asset.
With so many changes to come under the new Trump administration, we will be following this and other regulatory developments related to digital assets closely.
President Trump Addresses EB-5 Green Card Program and Proposes New Gold Card Immigration Program
On Feb. 25, 2025, President Trump announced that he will seek to end the U.S. EB-5 Immigrant Investor Program, which provides foreign investors with permanent residency in the United States. The EB-5 program requires a foreign national to invest in U.S. businesses that create 10 or more jobs per investor. The program has an investment amount of $1,050,000 that can be reduced to $800,000 if the investment is made in a high unemployment area, rural area, or through a government infrastructure project. Investors and their dependents are able to attain U.S. citizenship after five years of permanent residency.
Trump’s announcement aims to replace the EB-5 visa with a “Gold Card” program, which the president stated would require an investment of $5 million and that would grant “green card plus benefits,” including a path to citizenship, which the EB-5 program already provides. No further details were given, although in his announcement he noted that a detailed plan would be published in the next two weeks. According to the president, the goal is to attract wealthy people to the United States that would create businesses and help reduce the country’s deficit.
However, the president does not have the authority to ignore or override an act of Congress, including the Immigration and Nationality Act. Congress is given the authority to pass immigration laws that control admission, exclusion, and naturalization. This power is based on the Constitution’s Article 1, Section 8, Clause 18, which gives Congress the power to make laws that are necessary and proper to carry out the Constitution’s power. Likewise, the Supreme Court has ruled that Congress has “plenary” power over immigration, which means that Congress has almost complete authority over the passage of immigration laws. In 2022, Congress reauthorized the EB-5 program through Sept. 30, 2027, with the passage of the EB-5 Reform and Integrity Act. The president does not have authority to strike down an act of Congress, including the existing EB-5 program. Likewise, Congress has exclusive control over the allocation of employment based green card numbers and any change to that would need to be done by amending the Immigration and Nationality Act. The president can propose new immigration legislation, but only Congress can make new laws and amend existing laws. The president also has the authority to enforce immigration laws through agencies like U.S. Citizenship and Immigration Services, U.S. Immigration and Customs Enforcement, and U.S. Customs and Border Protection. Any attempt to strike down the EB-5 program may be met with immediate judicial action to enjoin and strike down any such proposal.
Beltway Buzz, February 28, 2025
The Beltway Buzz™ is a weekly update summarizing labor and employment news from inside the Beltway and clarifying how what’s happening in Washington, D.C., could impact your business.
House Budget Resolution: No Tax on Tips? Nope. This week, the U.S. House of Representatives passed a budget resolution, a critical step in Republican lawmakers’ plan to use the budgetary reconciliation process to score legislative wins on taxes, the border, defense spending, and energy production. But this is just a first step in what is expected to be an arduous legislative process: both the U.S. Senate and House must agree on the same budget resolution before the individual legislative committees in each chamber can begin drafting legislation as instructed by such a resolution. Accordingly, despite some internet rumors to the contrary, the House-passed budget resolution does not—by itself—eliminate taxes on overtime pay or tipped wages.
Regulatory EO Asserts More Control Over Independent Agencies. On February 18, 2025, President Trump issued an executive order (EO), entitled, “Ensuring Accountability for all Agencies.” The EO strengthens President Trump’s authority over the executive branch—particularly over independent agencies such as the National Labor Relations Board (NLRB), U.S. Equal Opportunity Commission (EEOC), and Federal Trade Commission—by ordering the following:
Independent agencies will be required to submit proposed and final rules to the White House’s Office of Information and Regulatory Affairs (OIRA) for review. (Some agencies, such as the EEOC, already submit their rules for review by OIRA.)
The director of the Office of Management and Budget (OMB) will set “performance standards and management objectives for independent agency heads” and the director will also be required to “report periodically to the President on their performance and efficiency in attaining such standards and objectives.”
The OMB director is required to consult with agency chairs about their spending to prohibit them “from expending appropriations on particular activities, functions, projects, or objects, so long as such restrictions are consistent with law.”
The heads of agencies must “regularly consult with and coordinate policies and priorities” with the White House and submit strategic plans to OMB for approval.
A White House Liaison will be established within each independent agency.
Executive branch agencies—including independent agencies—are prohibited from advancing any policy “that contravenes the President or the Attorney General’s opinion on a matter of law.”
Along with the terminations of EEOC and NLRB members, the EO is an effort to align the policy objectives of independent agencies with those of the White House.
DOL Nominee News. This week, the Senate Committee on Health, Education, Labor and Pensions (HELP) voted to approve Lori Chavez-DeRemer’s nomination to be secretary of labor by a vote of 14–9. Senator Rand Paul (R-KY) voted “no,” while Democratic Senators Maggie Hassan (NH), John Hickenlooper (CO), and Tim Kaine (VA) voted in favor of the nomination. Chavez-DeRemer’s nomination is now teed up for a vote on the Senate floor. The bipartisan nature of the committee vote indicates that Chavez-DeRemer has a good chance of being confirmed.
Additionally, the HELP Committee held a hearing to examine the nomination of Keith Sonderling to be deputy secretary of labor. The committee will vote on Sonderling’s nomination on March 6, 2025.
FTC to Begin “Labor Markets Task Force.” According to media reports, Federal Trade Commission (FTC) Chair Andrew Ferguson announced at a recent event that the FTC will initiate a “labor markets task force.” The task force will reportedly focus on noncompete agreements, as well as no-hire and no-poach contracts. In June 2024, Ferguson voted against the FTC’s non-compete rule while writing, “Whatever the Final Rule’s wisdom as a matter of public policy, it is unlawful. Congress has not authorized us to issue it. The Constitution forbids it. And it violates the basic requirements of the Administrative Procedure Act.” The Buzz will be monitoring this situation as it develops.
DHS to Require Registration, Fingerprinting. U.S. Citizenship and Immigration Services (USCIS) announced that it is resuscitating a provision of the Immigration Nationality Act that will require all individuals “14 years of age or older who were not fingerprinted or registered when applying for a U.S. visa and who remain in the United States for 30 days or longer” to apply for registration and fingerprinting. After doing so, proof of this registration must be carried at all times by such individuals who are over the age of eighteen. The requirement dates back to World War II, but an eventual lack of an operable implementation procedure resulted in the abandonment of the policy. Individuals who will not have to register under this policy include, but are not limited to, lawful permanent residents, individuals with work permits, and visa holders with an arrival/departure record (Form I-94). Individuals who will have to register include the undocumented, previously registered children who turn fourteen, those present in the United States pursuant to programs such as Deferred Action for Childhood Arrivals or Temporary Protected Status who do not have work permits, and Canadians who arrive via land ports of entry. According to the announcement, the U.S. Department of Homeland Security (DHS) “will soon announce a form and process for aliens to complete the registration requirement.”
Capital Murder? Previously, we’ve discussed the caning of Charles Sumner, as well as the 1798 brawl between representatives from Vermont and Connecticut over an accusation of stolen valor. And then there was the deadly duel in 1838 between Representatives William Graves of Kentucky and Jonathan Cilley of Maine that stemmed from criticism of President Martin Van Buren. Well, today marks the anniversary of another unfortunate instance of violence perpetrated within the halls of the U.S. Congress.
William Preston Taulbee was a Democratic representative from Kentucky who served in Congress from 1885 to 1889. During his time in Congress, Taulbee had a difficult relationship with a Kentucky journalist named Charles Kincaid, who wrote frequently—and critically—about Taulbee’s political service. The breaking point came in late 1887, when Kincaid wrote a story about Taulbee engaging in an extramarital affair. This story sank Taulbee’s political career, as he did not seek another term. However, Taulbee became a lobbyist and, therefore, remained a frequent visitor in Congress. On February 28, 1890, a meeting between the two men became physical, causing Kincaid to retrieve his pistol, which he used later that day to shoot Taulbee when he confronted him on a staircase in the Capitol Building. Taulbee died eleven days later. The slight Kincaid—described as “a little pint-of-cider fellow”—later claimed self-defense and was acquitted of Taulbee’s murder. Amazingly, Kincaid’s attorney was sitting U.S. Senator Daniel W. Voorhees of Indiana, who, like Taulbee, was a Democrat.
FDIC Withdraws Support for Colorado’s Opt-Out Law Before Tenth Circuit
On February 26, the FDIC withdrew its amicus brief in the 10th Circuit Court of Appeals challenging Colorado’s 2023 opt-out law which aimed to restricting higher-cost online lending. The FDIC’s decision follows a shift in the agency’s leadership and marks a departure from the previous administration’s position supporting Colorado’s interpretation of the Depository Institutions Deregulation and Monetary Control Act (DIDMCA).
Colorado’s opt-out law invokes a provision of DIDMCA that allows states to exclude themselves from the federal interest rate exportation framework, which enables banks to lend nationally at rates permitted by their home states. The law seeks to apply Colorado’s interest rate caps—some as low as 15%—to all loans made to Colorado residents, including those issued by out-of-state banks in partnership with fintech firms.
A coalition of industry groups challenged the law, arguing that Colorado is overstepping its authority by attempting to regulate lending that occurs outside the state. In June 2024, a federal district court sided with the industry groups, ruling that a loan is made where the lender performs its loan-making functions rather than where the borrower is located. The court issued a preliminary injunction preventing Colorado from enforcing the law against out-of-state lenders.
The FDIC initially supported Colorado’s position, arguing in its amicus brief that, for purposes of DIDMCA’s opt-out provision, a loan can be considered “made” where the borrower is located. However, citing a recent change in administration, the agency withdrew its brief before the Tenth Circuit could hear oral arguments in Colorado’s appeal.
Putting It Into Practice: The withdrawal follows the FDIC’s transition to Republican-led leadership under Acting Chairman Travis Hill, who has signaled a more favorable stance toward bank-fintech partnerships (previously discussed here). With oral arguments set for March 18, a ruling upholding Colorado’s law could inspire similar state restrictions, while a decision favoring industry plaintiffs would reaffirm federal rate exportation rules under the DIDMCA.
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CFPB Drops Lawsuit Against Online Lender Following Litigation Freeze
On February 23, the CFPB filed a joint stipulation in the United District Court for the Central District of California to dismiss its lawsuit against an online lending platform. The lawsuit, originally filed in May 2024, alleged that the platform misled borrowers about the total cost of its loans in violation of the Fair Credit Reporting Act (FCRA) and the Consumer Financial Protection Act (CFPA).
The dismissal follows a broader litigation freeze ordered by CFPB Acting Director Russ Vought (previously discussed here). The CFPB had previously sought a stay in the case against the online lending platform, but the U.S. district court judge denied the request, stating that there was “no good cause shown”.
The original lawsuit raised allegations concerning the platform’s lending practices, including:
Deceptive advertising of loan terms. The platform advertised its loans of having no interest or 0% APR while almost all loans required borrowers to pay lender tip fees or platform donation fees, significantly increasing the cost of borrowing.
Misleading loan disclosures. Borrowers were provided promissory notes and Truth in Lending disclosures that incorrectly stated loan costs, failing to include lender tip fees and platform donation fees.
Obscuring fee opt-outs. The platform allegedly designed its loan request process to obscure the “no donation” option, requiring borrowers to select a pre-set donation amount, interfering with their ability to understand loan terms.
Unlawful collection practices. The CFPB alleged that the platform attempted to collect payments on loans that were void or uncollectible under certain state usury or lender-licensing laws, misrepresenting borrowers’ repayment obligations and threatening negative credit reporting despite not actually reporting to credit bureaus.
Putting It Into Practice: Although the CFPB has dismissed the lawsuit, the issues raised in the case remain relevant for fintechs relying on nontraditional fee models (previously discussed here). While the lawsuit did not result in a legal determination, the CFPB’s approach underscores the risk for other companies operating under similar business models, particularly earned-wage access providers that rely on voluntary tips as state regulators have been active in this space (see prior discussions here and here). Fintechs should closely monitor enforcements like this matter and how the new administration approaches these issues.
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Federal Court Pauses Open Banking Rule Litigation
On February 25, a federal judge in the United District Court for the Eastern District of Kentucky approved a joint motion between the CFPB and banking trade groups to pause litigation over the agency’s 1033 open banking rule. The lawsuit challenges the CFPB’s rule requiring banks to allow consumers to share deposit and credit card account information with third-party fintech providers.
The banking trade groups argue that the CFPB’s regulation surpasses its authority under Section 1033 of the Dodd-Frank Act, contending that the rule places an excessive regulatory burden on banks while disproportionately benefiting fintech companies. The lawsuit was filed in October 2024, the same day the CFPB finalized the rule.
The rule (previously discussed here) establishes a framework requiring financial institutions to allow consumers to securely share account data with external fintech services. Under the rule, data providers must make the following covered data available: (i) transaction details; (ii) account balances; (iii) information for initiating payments to or from a Regulation E account; (iv) available terms and conditions; (v) upcoming bill details; and (vi) basic account verification information, such as name, address, email, phone number, and, if applicable, account identifier.
The rule requires data providers to authenticate consumers before sharing requested information and honor data requests from third parties as authorized by the consumer. They must also offer a way for consumers to revoke third-party data access and keep records of any denied data requests. Data providers need written policies to ensure compliance and must retain records for three years.
Putting It Into Practice: The agreed upon litigation pause delays the lawsuit challenging the rule (previously discussed here), but does not alter the compliance deadlines, the first of which remains set to begin on April 1, 2026. The pause allows time for the CFPB, under Acting Director Russel Vought, to assess the open banking rule and determine whether it aligns with the new administration’s policy objectives. The rule had bipartisan support so it will be interesting to see what happens. We will keep monitoring this space for developments.
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