Administrative & Regulatory – Page 32

Washington State Enacts Antitrust Pre-Merger Notification Act

What Happened: On April 4, 2025, Washington was the first state to enact the Uniform Antitrust Pre-Merger Notification Act (the Act). The Act requires certain parties with a nexus to the state that make a Hart-Scott-Rodino (HSR) filing to also submit the filing to the state’s attorney general (AG).
The Bottom Line: Adoption of the Act requires direct notice of large transactions to the state AG’s office. The Act also promotes sharing of the information submitted among states that have enacted the Act. As more states pass their own versions of the Act, state involvement in the review of such transactions may increase. Recently, some state AGs have taken a more active role in merger enforcement, including filing their own state court cases separately from the federal antitrust agencies. Certain state AGs have also said they stand ready to fill in gaps, if the federal agencies under President Trump become more lenient on antitrust enforcement.
The Full Story: Washington’s law requires a person making a Hart-Scott-Rodino (HSR) filing that (a) has its principal place of business in the state; (b) has annual net sales of 20 percent of the HSR threshold (adjusted annually, currently $126.4 million) of the goods or services involved in the transaction in the state; or (c) is a healthcare provider conducting business in the state, to also submit the HSR filing and attachments to the state AG’s office. The statute requires notice only, does not require payment of a filing fee and does not include additional enforcement powers or impose a waiting period on the transaction before the parties can close (as under HSR). Nor does the statute require both parties to submit their HSR filings to the state AG, as they must under HSR to the Federal Trade Commission (FTC) and Antitrust Division of the Department of Justice (DOJ). The statute authorizes a civil penalty of $10,000 per day of noncompliance. The statute contains confidentiality measures, including exempting the information submitted from the state FOIA law. In certain merger investigations where state AGs join their federal enforcer counterparts (FTC or DOJ), state AGs will request waivers from the merging parties to allow for the federal enforcers to share material obtained from the merging parties (including their HSR filings) with state AG offices. Washington’s law is mandatory and obviates the need for the Washington AG to obtain a waiver to gain access to the HSR filing of a party with one of the above connections to the state.
Washington is the first state to enact the Uniform Antitrust Pre-Merger Notification Act (the “Act”), which was adopted last year by the Uniform Law Commission. Other states have introduced bills with versions of the Act, including California, Nevada, Utah, Colorado, West Virginia, and the District of Columbia. This is in addition to other state laws requiring pre-merger notification (baby HSRs) for certain transactions in the healthcare industry including in California, Colorado, Connecticut, Hawaii, Illinois, Indiana, Massachusetts, Minnesota, Nevada, New York, New Mexico, Oregon, Rhode Island, Vermont, and Washington.
Conclusion: As state-specific pre-merger notification regimes are adopted, state antitrust review of mergers is expected to become more active. During the first Trump administration, several blue state AGs challenged the T-Mobile/Sprint merger after DOJ and several red state AGs settled the case. Also, during the Trump 1.0, the California AG challenged Valero’s proposed acquisition of petroleum terminals from Plains All American Pipeline and obtained a settlement in the Cedars-Sinai/Huntington Memorial Hospital transaction after the FTC declined to take action. Under the Biden administration, the Washington AG and Colorado AG challenged the Kroger/Albertsons merger separately in state courts and chose not to join the FTC (and nine other state AG co-plaintiffs) in the FTC’s case brought in federal court. The New York AG just recently won its challenge of Intermountain Management’s acquisition of Toggenburg Mountain ski resort, a case brought under New York state antitrust law. AGs from Colorado, California, and Michigan have stated that they are committed to take independent enforcement action if warranted regardless of what their federal enforcer counterparts decide to do. Companies need to stay apprised of new state merger filing requirements, as well as increased state antitrust review of transactions. This is especially true for industries that are localized in nature such as healthcare and retail.

FCC Grants Narrow One Year Effective Date Extension of TCPA Consent Revocation Requirement

Readers may recall that in February 2024, the FCC adopted a Report and Order imposing a number of new TCPA caller and texter compliance obligations in connection with consumer revocation requests, which are applicable to calls and text messages that otherwise require consent under the TCPA and the FCC’s rules. Those rules are slated to go into effect on April 11, 2025.
The FCC, however, has now issued a narrow, limited waiver of one aspect of those rules in the new Section 64.1200(a)(10) of its rules, extending the effective date of that section until April 11, 2026, to the extent the new rule requires callers and texters “to treat a request to revoke consent made by a called party in response to one type of message as applicable to all future robocalls and robotexts from that caller on unrelated matters.” The waiver was granted in response to requests from several associations of banks and financial institutions, supported by a healthcare industry vendor, stating that additional time is needed to ensure that entities can accurately apply revocation requests sent in response to one business unit’s calls or messages to future communications from its other business units.
Note that the waiver order emphasized that the one-year extension applies “only to section 64.1200(a)(10) to the extent discussed” in the order, and that it was only “delay[ing] the effective date of any such requirement” in the rule to treat an opt out from one messaging program of a caller as an opt out of all other messaging programs requiring consent. Thus, other aspects of the new rule appear unaffected by the waiver order, and are slated to go into effect on April 11, 2025 as previously announced.
These include, that callers and senders, as applicable: (i) must honor revocation requests made using an automated, interactive voice or key press-activated opt-out mechanism on a call; (ii) must honor revocation requests through seven specific texted back keywords (stop, quit, end, revoke, opt out, cancel, and unsubscribe); (iii) must treat other natural language text-backs by consumers as a valid revocation request if “a reasonable person” would understand those words to have conveyed a request to revoke consent; (iv) must honor revocation requests in a reasonable period of time, not to exceed 10 day; and (iv) may not designate an exclusive means to request revocation of consent.
Note too, that the February 2024 revocation mandate Report and Order included a wide range of revocation and consent issues not covered in the waiver order, as well as adopting additional rule sections. All of these likewise remain unaffected by the waiver order, which you can read about in our earlier our previous blog post here.

False Claims Act Settlements in Q1 Shows Scope of Frauds Targeted by Government as DOJ Official Promises “Aggressive” Enforcement

During the first quarter of 2025, the U.S. Department of Justice (DOJ) announced a number of False Claims Act (FCA) settlements and judgements, many of which resolved qui tam lawsuits filed by whistleblowers. The settlements and judgements showcase the variety of frauds which the government is pursuing and which False Claims Act whistleblowers can report.
Under the False Claims Act’s qui tam provisions, whistleblowers can file a qui tam lawsuit alleging violations of the FCA on behalf of the government, which then has the option to intervene and take over the lawsuit. Regardless of whether the government intervenes, whistleblowers whose qui tam suits result in successful cases are eligible to receive between 15-30% of the funds collected in the case.
The types of fraud targeted in settlements and judgments announced in the first quarter of 2025 include Medicare Part C fraud, cybersecurity fraud, illegal kickbacks and defense contract fraud.
In a keynote address at the Federal Bar Association’s annual qui tam conference in February, Deputy Assistant Attorney General Michael Granston promised that moving forward the Department of Justice “plans to continue to aggressively enforce the False Claims Act.”
$62 Million Settlement Over Medicare Part C Fraud Allegations
On March 26, the DOJ announced that Seoul Medical Group Inc., its subsidiary and majority owner, and Renaissance Imaging Medical Associates Inc., a radiology group that worked with Seoul Medical, agreed to pay a total of $62 million to resolve False Claims Act allegations relating to the submission of false diagnosis codes for two spinal conditions to increase payments from the Medicare Advantage program (Medicare Part C).
According to the DOJ, Seoul Medical and its owner “submitted diagnoses for two severe spinal conditions, spinal enthesopathy and sacroiliitis, for patients who did not suffer from either of these conditions” and “enlisted the assistance of Renaissance Imaging Medical Associates to create radiology reports that appeared to support the spinal enthesopathy diagnosis.”
These diagnoses allegedly led to the increased payment to Seoul Medical under Medicare Part C.
“Medicare Advantage is a vital program for our seniors and the government expects healthcare providers who participate in the program to provide truthful and accurate information,” said Acting Assistant Attorney General Yaakov M. Roth of the Justice Department’s Civil Division. “Today’s result sends a clear message to the Medicare Advantage community that the United States will zealously pursue appropriate action against those who knowingly submit false claims for taxpayer funds.”
The settlement resolved a qui tam whistleblower suit filed by Paul Pew, the former Vice President and Chief Financial Officer of Advanced Medical Management. Pew’s share of the recovery had not been determined at the time of the settlement.
$4.6 Million Settlement Over Cybersecurity Fraud Allegations
On March 26, the DOJ also announced a $4.6 million settlement MORSECORP Inc. resolving allegations that MORES violated the FCA by failing to comply with cybersecurity requirements in its contracts with the Departments of the Army and Air Force.
According to the DOJ, MORSE “submitted false or fraudulent claims for payment on contracts with the Departments of the Army and Air Force” and “those claims were false or fraudulent because Morse knew it had not complied with those contracts’ cybersecurity requirements.”
Among other things, the DOJ accused MORSE of “use[ing] a third-party company to host MORSE’s emails without requiring and ensuring that the third party met security requirements equivalent to the Federal Risk and Authorization Management Program Moderate baseline and complied with the Department of Defense’s requirements for cyber incident reporting, malicious software, media preservation and protection, access to additional information and equipment necessary for forensic analysis and cyber incident damage assessment.”
“Federal contractors must fulfill their obligations to protect sensitive government information from cyber threats,” said U.S. Attorney Leah B. Foley for the District of Massachusetts. “We will continue to hold contractors to their commitments to follow cybersecurity standards to ensure that federal agencies and taxpayers get what they paid for, and make sure that contractors who follow the rules are not at a competitive disadvantage.”
The settlement stemmed from a qui tam lawsuit filed by a whistleblower who is set to receive an $851,000 share of the settlement amount.
$15 Million Settlement Over Defense Contract Fraud Allegations
On April 1, the DOJ announced that DRI Relays Inc. agreed to pay $15.7 million to resolve allegations that it violated the FCA by supplying military parts that did not meet military specifications.
According to the DOJ, “between 2015 and 2021, under various Department of Defense (DoD) contracts and subcontracts, DRI invoiced for military grade electrical relays and sockets when it knew those parts had not met the testing requirements to be deemed military grade.”
“It is essential to the safety and operational readiness of our military that contractors comply with applicable military specifications,” said Acting Assistant Attorney General Yaakov M. Roth of the Justice Department’s Civil Division. “We will continue to hold accountable those who knowingly supply equipment to the U.S. military that fails to meet their contract obligations.”
$1.9 Million Settlement Over Kickback Allegations
On March 6, the DOJ announced that a group of health care providers and laboratory marketers agreed to pay a total of $1.9 million to resolve FCA allegations arising from their involvement in laboratory kickback schemes.
According to the DOJ, “health care providers received kickbacks in return for their referrals to a laboratory in Anderson, South Carolina” and “a marketer and his marketing company received kickbacks from that South Carolina laboratory to arrange for laboratory testing referrals.”
For example, according to the DOJ, one doctor and his medical practices “agreed to pay $400,000 to resolve allegations that from May 2016 to November 2021, they received thousands of dollars in remuneration disguised as purported office space rental and phlebotomy payments from the South Carolina laboratory in return for ordering testing.”
These alleged kickbacks were in violation of the Anti-Kickback Statute.
“Integrity must be the standard in our health care system,” said Acting U.S. Attorney Brook B. Andrews for the District of South Carolina. “Kickback schemes divert funds and focus away from patients and their medical needs.”
Conclusion
As these settlements show, the False Claims Act remains America’s number one anti-fraud law, covering a wide range of fraud affecting the federal government. Since 1986, the FCA has allowed the government to recover over $78 billion, with more than $55 billion stemming from qui tam whistleblower lawsuits.
Individuals looking to file a qui tam lawsuit alleging False Claims Act violations should consult an experienced whistleblower attorney.
Geoff Schweller also contributed to this article.

CFPB Drops Lawsuit Against Money Transmitter

On April 8, a federal court granted the CFPB’s motion to withdraw from its joint enforcement action against a global money transmitter. The lawsuit, originally filed in April 2022 in partnership with the New York Attorney General, alleged violations of the Electronic Fund Transfer Act (EFTA), including the Remittance Rule under its implementing Regulation E.
The complaint detailed a range of statutory and regulatory violations affecting remittance transfers used by consumers to send funds abroad. The core allegations included:

Inaccurate availability disclosures. The company allegedly failed to accurately disclose the date on which funds would be available to recipients.
Deficient error resolution. The company purportedly failed to promptly investigate consumer complaints, issue required fee refunds, or provide mandated explanations and documentation.
Noncompliant internal procedures. Regulators alleged the company lacked adequate written policies to identify covered errors, ensure timely investigations, and retain necessary compliance documentation.
Unfair acts under the CFPA. The Bureau and the New York AG alleged that the company unnecessarily delayed remittance transfers and refunds after completing internal screenings, leaving consumers without timely access to funds.

The lawsuit will now proceed with the New York AG as the sole plaintiff.
Putting It Into Practice: The CFPB’s withdrawal from this case is consistent with a broader trend of reassessing enforcement actions initiated under prior leadership (previously discussed here and here). While the Bureau appears to be narrowing its enforcement focus, state regulators—such as the New York Attorney General—continue to pursue consumer protection matters with vigor (discussed here). Financial services companies should not interpret reduced federal activity as a reprieve.

The BR International Trade Report: April 2025

Welcome to this month’s issue of The BR International Trade Report, Blank Rome’s monthly digital newsletter highlighting international trade, sanctions, cross-border investment, geopolitical risk issues, trends, and laws impacting businesses domestically and abroad.

Recent Developments
United States implements universal baseline tariffs while pausing reciprocal tariffs—except against China.

On April 2, President Trump announced reciprocal tariffs on almost all imports into the United States, which his administration rolled out in two phases:

On April 5, imports from all countries became subject to a 10 percent baseline tariff.
On April 9, the tariff rate increased for imports from 56 countries and the European Union, countries with which the United States has determined it has the largest trade deficits. This included a 34% tariff on Chinese goods.

Later, in response to China’s retaliatory tariffs of 34% on U.S. goods (see below), President Trump levied an additional 50% in tariffs on Chinese goods, which China then matched.
On April 9, President Trump announced a 90-day pause on implementation of the second wave of reciprocal tariffs noted above, except with respect to import of Chinese goods, which saw a further increase in tariffs to 125%.
Notably, certain products are excluded from the new tariff program, including items subject to Section 232 tariffs and articles that comply with United States-Mexico-Canada Act (“USMCA”) preferential origin rules. See our alert for more details.

Global trading partners react to United States reciprocal tariffs. In the aftermath of President Trump’s reciprocal tariffs announcement, U.S. trading partners have taken differing approaches to President Trump’s new tariffs.

Some, like Israel, India, and Vietnam, reportedly have contacted the White House to negotiate a deal. When President Trump announced on Truth Social that he was postponing the tariffs, he claimed that more than 75 countries have reached out to negotiate.
China, in stark contrast, announced retaliatory tariffs of 34 percent, expanded its export controls, and vowed to “fight to the end.” In response, President Trump increased the U.S. tariff on Chinese goods. After a series of escalating moves, at press time, the U.S tariff on Chinese goods stood at 145% (125% for reciprocal tariffs plus a 20% tariff related to the fentanyl crisis), while China is imposing a 125% retaliatory tariff on U.S. goods.
Meanwhile, the European Union reportedly is doing both: authorizing retaliatory tariffs on around €22 billion of imports of U.S. goods into Europe, while offering a “zero for zero” tariff deal for cars and other industrial products. In response to the Trump Administration’s pause on reciprocal tariffs, the EU has paused its retaliatory measures.

China, Japan, and South Korea meet to discuss possible free trade agreement. On March 30, the three countries held their first economic talks in years, agreeing to “closely cooperate for a comprehensive and high-level” dialogue on a free trade agreement to promote “regional and global trade.” Chinese state media took things a step further, claiming that the countries had agreed to coordinate their response to U.S. tariffs, which South Korea described as “somewhat exaggerated” and which Japan denied.
White House releases public summary of the Report to the President on the America First Trade Policy. On April 3, the White House publicized a summary of various U.S. government agencies’ April 1 report to President Trump on the implementation of his “America First” trade policy, although the summary did not provide definitive details regarding the report’s contents. The summary notes that the report examined a range of China-related trade actions, as well as “simpler, stricter, and more effective” export controls and possible expanded U.S. government review of outbound U.S. investment into China.
President Trump orders new CFIUS review of Nippon Steel’s proposed acquisition of U.S. Steel. On April 7, President Trump called for the Committee on Foreign Investment in the United States (“CFIUS”) to conduct a de novo review of the proposed acquisition of U.S. Steel by Japan’s Nippon Steel. President Trump’s directive comes after former President Joe Biden blocked the acquisition of U.S. Steel prior to his departure from the White House.
European Union considering joining Canada in World Trade Organization case against U.S. steel and aluminum tariffs. On March 12, Canada filed a request for consultations at the World Trade Organization (“WTO”), alleging that U.S. steel and aluminum tariffs are “inconsistent with the United States’ obligations under the [General Agreement on Tariffs and Trade 1994].” Reports indicate that the European Union may join Canada’s complaint as the economic “bloc has a ‘substantial trade interest’ in the issue.” The dispute complaint is largely symbolic in nature, as since 2019, the WTO’s appellate body has been nonfunctioning.
Coalition government formed in Germany amid economic uncertainty. The German center-right Christian Democratic Union (“CDU”), led by Chancellor-in-waiting Friedrich Merz, and the center-left Social Democratic Party (“SPD”) reached an agreement to form a coalition government. The need for a centrist coalition was driven by uncertainty regarding American tariffs and the continuation of the Ukraine War, along with an impetus to keep the Alternative for Germany (“AfD”) party out of power. Merz has touted the agreement as evidence that Germany will be a reliable and capable force in Europe.
Democratic Republic of the Congo seeks critical minerals deal with the United States. Representative Ronny Jackson (R-TX) met with Democratic Republic of the Congo (“DRC”) President Felix Tshisekedi in late March to discuss a potential critical minerals deal between the countries. The potential deal comes as the DRC seeks to secure funding to contain the conflict with the Rwandan-backed M23 rebels in its east. Massad Boulos, President Donald Trump’s senior advisor for Africa, indicated that the White House had reviewed a minerals agreement between the United States and the DRC and that President Trump and Boulos had “agreed on a path forward for its development.”
President Trump extends TikTok sale deadline. On April 4, President Donald Trump announced that he would pause the upcoming ban of TikTok, set for April 5 under a law that President Biden signed last year requiring divestiture of TikTok’s U.S. operations, for another seventy-five days. The extension comes after representatives of ByteDance, TikTok’s parent, reportedly told the White House that the Chinese government would not approve a sale of the company without negotiations over tariffs. President Trump has suggested that he may lower tariffs on U.S. imports of Chinese-origin items if Beijing approves the sale.
Impeached South Korean President Yoon Suk Yeol removed from office. On April 4, South Korea’s Constitutional Court voted unanimously to remove Yoon Suk Yeol, the country’s impeached president, from office for his December 2024 martial law declaration. South Korea will hold a snap presidential election on June 3, 2025.

In Case You Missed It…
Liberation Day: President Trump Unveils Global, Reciprocal Tariffs – What You Need to KnowBlank Rome partner Joanne E. Osendarp, of counsel Timothy J. Hruby, senior counsel Alan G. Kashdan, and associates Brenden S. Saslow, Rachel D. Evans, and Christopher A. Kimura authored this alert assessing the recently announced global tariffs initiated by the Trump administration.
Read More > >
Christopher A. Kimura also contributed to this article.

Hong Kong SFC’s New Roadmap to Develop Hong Kong as a Global Virtual Asset Hub: ASPIRe

The Hong Kong Securities and Futures Commission (SFC) has recently unveiled a growth plan for the virtual asset (VA) industry, outlined in a five-pillar roadmap called “A-S-P-I-Re.” This roadmap consists of 12 initiatives organized into five categories: Access, Safeguards, Products, Infrastructure, and Relationships.
Pillar “A” (Access) – Expanding Opportunities for Investors
Initiative 1: Establish Licensing for OTC Trading and Custody Services
The SFC will support a licensing framework for over-the-counter (OTC) trading, ensuring parity between OTC operators and VA trading platforms (VATPs). A separate licensing regime for custody services will create a two-tier structure for trading and custody.
Initiative 2: Attract Global Platforms and Liquidity Providers
The SFC aims to encourage international VA platforms to set up local operations and streamline onboarding for institutional-grade liquidity providers, enhancing market liquidity.
Pillar “S” (Safeguards) – Balancing Investor Protection with Flexible Regulations
Initiative 3: Dynamic Custody Technologies
The SFC will explore emerging custody technologies, moving away from rigid cold storage mandates to more flexible and security-focused frameworks.
Initiative 4: Enhance Insurance and Compensation Frameworks
The SFC will align compensation and insurance requirements with global standards, allowing VA service providers to tailor their arrangements.
Initiative 5: Clarify Onboarding and Product Categorization
The SFC will clarify investor onboarding processes and create a classification system for VA products based on their nature and associated risks.
Pillar “P” (Products) – Diversifying VA Offerings
Initiative 6: Regulatory Framework for Professional Investors
The SFC will consider allowing professional investors to participate in new token listings and trade VA derivatives, contingent on due diligence and risk management.
Initiative 7: Margin Financing Requirements
The SFC will introduce margin financing requirements for VA, making it easier for traditional finance to engage with familiar risk practices.
Initiative 8: Staking and Borrowing/Lending Services
The SFC will evaluate the possibility of allowing staking and borrowing/lending services for professional investors, supported by appropriate risk management safeguards. As a follow-on action, on 7 April 2025, the SFC issued guidelines on licensed VATPs and authorized funds in relation to the provision of staking services.
Pillar “I” (Infrastructure) – Improving Market Monitoring and Collaboration
Initiative 9: Advanced Reporting and Surveillance Tools
The SFC will implement blockchain analytics tools and transaction monitoring systems to combat fraud and market misconduct.
Initiative 10: Strengthen Cross-Agency and Cross-Border Collaboration
The SFC will promote local and global collaboration to establish a comprehensive framework for risk monitoring and asset recovery.
Pillar “Re” (Relationships) – Fostering Education, Engagement, and Transparency
Initiative 11: Guidelines for Financial Influencers
The SFC will introduce guidelines for financial influencers (Finfluencers) to encourage responsible communication and protect investor interests.
Initiative 12: Build a Sustainable Communication and Talent Network
The SFC will work with stakeholders through the Virtual Asset Consultative Panel and support training programs.
Conclusion
The A-S-P-I-Re roadmap presents a comprehensive strategy to sustain Hong Kong’s VA market by integrating traditional finance with blockchain innovation. By addressing regulatory gaps and promoting collaboration, the SFC is positioning Hong Kong as a global leader in the VA industry.

NYDFS Joins Multistate Action Against Money Transmitter for Financial and Licensing Violations

On March 20, the New York Department of Financial Services (NYDFS) entered into a consent order with a money transmitter, joining a group of state financial regulators acting through a multi-state task force coordinated by the Conference of State Bank Supervisors (CSBS) and the Money Transmitter Regulators Association (MTRA). The regulators alleged that the company violated state money transmission laws by failing to satisfy outstanding transmission liabilities, maintain adequate net worth and permissible investments, and continue licensed operations in a financially sound manner.
New York’s action follows an Interim Consent Order issued on March 21, 2024, after the company disclosed its deteriorating financial condition and inability to meet obligations to consumers. According to the regulators, the company ceased operations and initiated the surrender of its licenses while still owing outstanding transmission liabilities and without sufficient unencumbered assets to make consumers whole.
According to the 2025 consent order, the multi-state investigation identified several violations of state law:

Failure to satisfy transmission liabilities. The company allegedly did not meet its payment obligations as they became due, in violation of applicable money transmission statutes.
Insufficient net worth. In jurisdictions where financial thresholds apply, the company allegedly failed to maintain the net worth required to remain licensed.
Lack of permissible investments. The company allegedly failed to hold sufficient investments to cover its transmission obligations.

As a part of the settlement, the company agreed to permanently cease all money transmission activity and surrender its licenses. It must also pay a $1 million administrative penalty, to be distributed equally among participating states. The payment is stayed for two years and may be waived if the company complies with specified consumer protection provisions, including maintaining its website to direct consumers to file complaints and cooperating with bond claim processes.
Putting It Into Practice: This settlement is another example of state regulators asserting their authority in the absence of federal action, particularly in the money transmission and fintech sectors (previously discussed here and here). Financial institutions should expect multistate enforcement to become more common under the new administration.
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California DFPI Proposes Digital Asset Licensing Rule

On April 4, the California Department of Financial Protection and Innovation (DFPI) issued proposed regulations under the Digital Financial Assets Law (DFAL). The proposal provides clarification on DFAL’s licensing framework and identifies when digital asset activity may qualify for exemptions under California’s Money Transmission Act.
The proposal builds on legislation passed in 2023 and 2024—including Assembly Bill 39, Senate Bill 401, and Assembly Bill 1934—which established the DFAL and later pushed back its implementation deadline. Beginning July 1, 2026, companies engaging in covered digital financial asset business activity with or on behalf of California residents must be licensed by DFPI, have a pending application on file, or qualify for an exemption.
The proposed regulations aim to implement the Digital Financial Assets Law by clarifying licensing procedures, exemptions, and reporting obligations. The rule is intended to enhance transparency, improve oversight, and support the development of a safe, regulated digital asset market in California. Key provisions include:

License application procedures. The proposed regulations detail how covered persons must apply for licensure, including the use of the Nationwide Multistate Licensing System and Registry (NMLS) and required supporting materials.
Surety bond requirements. The proposal explains how licensees must demonstrate compliance with DFAL’s surety bond obligations, including documentation standards.
Material change notifications. Applicants and licensees must notify the DFPI of any changes to application information, including business addresses and control persons.
Kiosk disclosures. Operators of digital financial asset kiosks must report locations and provide updates to the Department as changes occur.
Exemption from MTA Licensure. The rule clarifies that money transmission incidental to digital asset activity does not trigger licensure under California’s Money Transmission Act.

The DFPI has invited written public comment through May 19, 2025, and will hold a hearing if requested by April 30. The Department estimates that compliance with the proposed regulations will cost approximately $8,190.18 in the first full year, with $150 in annual fees thereafter.
Putting It Into Practice: The proposed regulations represent California’s first substantive rulemaking under DFAL and reinforce the state’s intent to become a leader in digital financial asset oversight. The move follows several digital asset regulations enacted by several states (previously discussed here and here). With California now entering the crypto regulatory space, other states are likely to follow.

CFPB Drops Remittance Lawsuit against Money Transfer Provider

New Mexico Will Phase Out Products Containing Intentionally Added PFAS and Require Reporting; Exemptions Include Fluoropolymers

On April 8, 2025, New Mexico Governor Michelle Lujan Grisham (D) signed the Per- and Poly-Fluoroalkyl Substances (PFAS) Protection Act (HB 212). Like Minnesota and Maine, New Mexico will begin phasing out certain consumer products containing intentionally added PFAS, defining PFAS as “a substance in a class of fluorinated organic chemicals containing at least one fully fluorinated carbon atom.” In 2032, New Mexico will prohibit products containing intentionally added PFAS unless the use of the PFAS is designated as a currently unavoidable use (CUU). Similar to Minnesota, New Mexico will also require manufacturers of products containing intentionally added PFAS to report certain information. New Mexico will exempt several products, however, from both the prohibition and reporting requirements. Most notably, the exemptions include products containing certain fluoropolymers.
Prohibited Products
In New Mexico, beginning January 1, 2027, a manufacturer may not sell, offer for sale, distribute, or distribute for sale the following products containing intentionally added PFAS:

Cookware;
Food packaging;
Dental floss;
Juvenile products; and
Firefighting foam.

Beginning January 1, 2028, New Mexico will prohibit manufacturers from selling, offering for sale, distributing, or distributing for sale the following products containing intentionally added PFAS:

Carpets or rugs;
Cleaning products;
Cosmetics;
Fabric treatments;
Feminine hygiene products;
Textiles;
Textile furnishings;
Ski wax; and
Upholstered furniture.

Beginning January 1, 2032, products containing intentionally added PFAS that are not exempt under New Mexico’s statute will be banned unless the use of the PFAS is determined to be a currently unavoidable use (CUU).
The products that New Mexico will prohibit are similar to the products that Minnesota and Maine have already prohibited or will be prohibiting. On January 1, 2025, Minnesota prohibited intentionally added PFAS in carpets or rugs, cleaning products, cookware, cosmetics, dental floss, fabric treatments, juvenile products, menstruation products, textile furnishings, ski wax, and upholstered furniture. As of January 1, 2025, Maine prohibits intentionally added PFAS in carpets or rugs, fabric treatments, and fabric treatments that do not contain intentionally added PFAS but are sold, offered for sale, or distributed for sale in a fluorinated container or in a container that otherwise contains intentionally added PFAS. Beginning January 1, 2026, Maine will prohibit intentionally added PFAS in cleaning products, cookware, cosmetics, dental floss, juvenile products, menstruation products, textile articles (with exception), ski wax, upholstered furniture, and products listed that do not contain intentionally added PFAS but are sold, offered for sale, or distributed for sale in a fluorinated container or in a container that otherwise contains intentionally added PFAS. Beginning January 1, 2029, Maine will prohibit intentionally added PFAS in artificial turf and outdoor apparel for severe wet conditions unless accompanied with a disclosure: “Made with PFAS chemicals.” Both Minnesota and Maine will prohibit products containing intentionally added PFAS beginning January 1, 2032, unless the use is a CUU, and Maine will prohibit products that do not contain intentionally added PFAS but that are sold, offered for sale, or distributed for sale in a fluorinated container or in a container that otherwise contains intentionally added PFAS. As amended last year, Maine will prohibit intentionally added PFAS in cooling, heating, ventilation, air conditioning, and refrigeration equipment, as well as in refrigerants, foams, and aerosol propellants as of January 1, 2040.
Reporting Requirements
On or before January 1, 2027, New Mexico will require manufacturers of products containing intentionally added PFAS to report certain information, including:

A brief description of the product, including a universal product code (UPC), stock keeping unit (SKU), or other numeric code assigned to the product;
The purpose for which the PFAS is used in the product;
The amount of each PFAS in the product, identified by its Chemical Abstracts Service Registry Number® (CAS RN®) and reported as an exact quantity determined using commercially available analytical methods or as falling within a range approved for reporting purposes by the New Mexico Environment Department (NMED);
The name and address of the manufacturer and the name, address, and phone number of a contact person for the manufacturer; and
Any additional information requested by NMED as necessary.

NMED may grant a waiver to a manufacturer if NMED determines that substantially equivalent information is publicly available. NMED may enter into an agreement with one or more states to collect information and may accept information from a shared system as meeting the information requirements.
As reported in our June 14, 2023, blog item, Minnesota will require manufacturers of products containing intentionally added PFAS to submit similar information on or before January 1, 2026. According to the Minnesota Pollution Control Agency (MPCA), it is working with the Interstate Chemicals Clearinghouse (IC2) to modify its High Priority Chemicals Data System (HPCDS) database as the reporting platform for its requirement. Maine had a similar reporting requirement in the statute enacted in 2021, but the governor signed a bill in April 2024 amending the statute so that the reporting requirement applies only to products that receive a CUU determination. More information on the 2024 amendments to Maine’s statute are available in our May 24, 2024, blog item.
Exemptions
New Mexico exempts several products from both the prohibition and reporting requirement. As stated earlier, Maine amended its reporting requirement to apply only to products with a CUU determination. Maine’s 2024 amendments included the addition of several exemptions to the statute as noted below. Minnesota’s statute has fewer exemptions, which are also noted below. The exemptions in New Mexico include:

A product for which federal law governs the presence of a PFAS in the product in a manner that preempts state authority (Maine);
Used products offered for sale or resale (Maine, Minnesota);
Medical devices or drugs and the packaging of the medical devices or drugs that are regulated by the U.S. Food and Drug Administration (FDA), including prosthetic and orthotic devices (Maine, Minnesota (reporting will still be required));
Cooling, heating, ventilation, air conditioning, or refrigeration equipment that contains intentionally added PFAS or refrigerants listed as acceptable, acceptable subject to use conditions, or acceptable to narrowed use limits by the U.S. Environmental Protection Agency (EPA) pursuant to the Significant New Alternatives Policy (SNAP) Program, 40 C.F.R. Part 82, Subpart G and sold, offered for sale, or distributed for sale for the use for which the refrigerant is listed pursuant to that program (Maine will prohibit these products on January 1, 2040);
A veterinary product and its packaging intended for use in or on animals, including diagnostic equipment or test kits and the veterinary product’s components and any product that is a veterinary medical device, drug, biologic, or parasiticide or that is otherwise used in a veterinary medical setting or in veterinary medical applications that are regulated by or under the jurisdiction of:

FDA;

The U.S. Department of Agriculture (USDA) pursuant to the federal Virus-Serum-Toxin Act; or

EPA pursuant to the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), except that any such products approved by EPA pursuant to that law for aerial and land application are not exempt from this section (Maine);

A product developed or manufactured for the purpose of public health or environmental or water quality testing (Maine);
A motor vehicle or motor vehicle equipment regulated under a federal motor vehicle safety standard, as defined in 49 U.S.C. Section 30102(a)(10), except that the exemption does not apply to any textile article or refrigerant that is included in or as a component part of such products (Maine);
Any other motor vehicle, including an off-highway vehicle or a specialty motor vehicle, such as an all-terrain vehicle, a side-by-side vehicle, farm equipment, or a personal assistive mobility device (Maine);
A watercraft, an aircraft, a lighter-than-air aircraft or a seaplane (Maine);
A semiconductor, including semiconductors incorporated in electronic equipment, and materials used in the manufacture of semiconductors (Maine);
Non-consumer electronics and non-consumer laboratory equipment not ordinarily used for personal, family, or household purposes (Maine);
A product that contains intentionally added PFAS with uses that are currently listed as acceptable, acceptable subject to use conditions, or acceptable subject to narrowed use limits in EPA’s rules under the SNAP Program; provided that the product contains PFAS that are being used as substitutes for ozone-depleting substances under the conditions specified in the rules;
A product used for the generation, distribution, or storage of electricity;
Equipment directly used in the manufacture or development of the products listed above;
A product for which the NMED Environmental Improvement Board (EIB) has adopted a rule providing that the use of PFAS in that product is a CUU; or
A product that contains fluoropolymers consisting of polymeric substances for which the backbone of the polymer is either a per- or polyfluorinated carbon-only backbone or a perfluorinated polyether backbone that is a solid at standard temperature and pressure.

Testing Required and Certificate of Compliance
If NMED has reason to believe that a product containing an intentionally added PFAS is being sold, offered for sale, distributed, or distributed for sale, it may direct the manufacturer to provide it with testing results within 30 days that demonstrate the amount of each PFAS in the product, identified by its CAS RN and reported as an exact quantity or as falling within a range approved for reporting. If testing demonstrates that the product does not contain intentionally added PFAS, the manufacturer will provide NMED with a certificate of compliance attesting that the product does not contain an intentionally added PFAS, the testing results, and any other relevant information.
Minnesota has similar provisions regarding testing and certificates of compliance. The Maine Department of Environmental Protection (MDEP) may direct the manufacturer to provide within 30 days a certificate attesting that the product does not contain intentionally added PFAS.
Commentary
Although the requirements enacted by New Mexico, Maine, and Minnesota are similar, there are some key differences. Most of the products exempted in 2024 from Maine’s prohibitions are included in New Mexico’s statute, as well as a provision exempting fluoropolymers that “consist[] of polymeric substances for which the backbone of the polymer is either a per- or polyfluorinated carbon-only backbone or a perfluorinated polyether backbone that is a solid at standard temperature and pressure.” Bergeson & Campbell, P.C. (B&C) agrees that fluoropolymers should be distinguished from the broad class of PFAS. The exemption here may lead, however, to future litigation or amendment. The enacted definition includes the fluoropolymer polytetrafluoroethylene (PTFE), better known as TeflonTM. While New Mexico will ban cookware containing intentionally added PFAS, the best known example — Teflon-coated frying pans — will be exempt from both the prohibition and reporting requirements. Non-governmental organizations (NGO) may argue that legislatures lacking a chemical background did not appreciate that the exemption would extend to Teflon-coated cookware, while manufacturers will maintain the safety of fluoropolymers. The inclusion of the exemption is scientifically grounded and reflects the entirely sensible view that products posing no risk should not be banned. Other states are expected to follow New Mexico’s lead.
Each state varies in what reporting will be necessary. Maine dropped its broad reporting requirement and will require reporting only for products with a CUU determination. Minnesota will require reporting for all products, including those otherwise exempt from the prohibition requirements, including medical devices. New Mexico will require reporting only for products that do not have an exemption (thus excluding products that have a CUU determination and medical devices). Minnesota and New Mexico will require similar information, and with Minnesota’s reporting currently due on or before January 1, 2026, it may be that reporting to New Mexico will not be necessary since the enacted law allows NMED to grant a waiver to a manufacturer if NMED determines that substantially equivalent information is publicly available. NMED may also accept information from a shared system as meeting the information requirements.
The testing envisioned by New Mexico and Minnesota that can demonstrate the amount of each PFAS in the product, identified by CAS RN and reported as an exact quantity or as falling within an approved range, all within 30 days, is beyond the current technical capabilities. With thousands of substances meeting the states’ definition of PFAS as “a class of fluorinated organic chemicals containing at least one fully fluorinated carbon atom,” it is not yet possible to run a single test and determine the specific PFAS in a particular product. To date, the current test used, total organic fluorine (TOF), measures only the total amount of fluorine in a sample that is bound to organic compounds.
Since enacting its statute in 2021, Maine has amended it several times, and there are currently several bills in the Minnesota legislature that would amend its law. As reported in our April 11, 2025, blog item, the Maine Board of Environmental Protection (MBEP) approved MDEP’s December 2024 proposed rule regarding PFAS products during its April 7, 2025, meeting. Under the approved rule, CUU requests for products scheduled to be prohibited January 1, 2026, in Maine are due June 1, 2025. Although Minnesota requested comments in November 2024 on its planned PFAS in products reporting and fee rule, it has yet to issue a proposed rule, despite the rapidly approaching January 1, 2026, deadline. The state regulatory landscape remains fluid, and stakeholders are advised to stay tuned.

Texas Legislature Takes Steps to Extend and Expand Research and Development Credit

The 89th Texas legislative session—which runs from Jan. 14 through June 2—has been active. One of the most awaited items on the tax front is whether the state will extend and modify the Texas Research and Development Credit (R&D Credit), which is currently set to expire on Dec. 31, 2026.
Senate Bill 2206 and House Bill 4393
Sens. Paul Bettencourt, Joan Huffman, and Rep. Charlie Geren introduced Senate Bill 2206 and its house companion House Bill 4393 (together referred to as the R&D Bills) in March 2025. The Finance Committee unanimously approved Senate Bill 2206 on April 9 and the bill will now move to the full Senate for consideration. House Bill 4394 was referred to the Ways and Means Committee on April 1.
Per Sens. Bettencourt and Huffman’s analysis, the goal of Senate Bill 2206 is “to extend the franchise tax credit beyond the current Dec. 31, 2026, expiration date and to make the administration of the credit more efficient for both taxpayers and the Comptroller of Public Accounts of the State of Texas (comptroller) by adhering more closely to the federal R&D credit, thereby leveraging the work of the Internal Revenue Service and reducing the demand on resources of the comptroller.”
If passed, the R&D Bills would generally allow for the expiration of Texas’ current regime, instead creating a separate R&D Credit program via the new Subchapter T. Here is an overview of some of the most significant changes the R&D Bills would create:

Extension of the R&D Credit Beyond Dec. 31, 2026. The current version of the R&D Bills seeks to extend the credit beyond its current expiration date. Although the R&D Bills do not include a specific sunset date, they also do not specifically insure the program’s longevity. It is worth noting that the business industry advocated for specific assurances regarding the credit’s duration, arguing that strong economic investment in research and manufacturing would grow twofold by removing any tax advantage end date.
Repeal of the R&D Sales Tax Exemption. The current versions of the R&D Bills do not include a sales tax exemption, purporting to address administrative difficulties that have been experienced under the current regime. Under the existing R&D Credit, the sales tax and franchise tax credits are mutually exclusive, and taxpayers must choose either one or the other (i.e., a taxpayer many only take either (1) a sales and use tax exemption on the purchase, lease, rental, storage, or use of qualified research property, or (2) a franchise tax credit based on qualified research expenses). The R&D Bills would eliminate this choice, maintaining only the franchise tax credit.
Adherence to the Federal R&D Credit. The R&D Bills would also create a program that adheres more closely to the federal R&D credit. This is a significant change, which is intended to simplify administration of the R&D Credit in Texas. Currently, Texas’ R&D Credit uses a separate calculation that does not align with the federal R&D credit program.
Increase in Expenditures. Additionally, the R&D Bills propose increasing the taxpayer’s allowable research and development expenditures from 5% to 8.722% for franchise tax credit purposes. Generally, R&D programs in other states allow for research and development expenditures ranging between 5% to 27%.

GT Insights
A study by Rice University’s Baker Institute, published on March 13, found that a strong R&D Credit program may generate over 113,000 jobs in the state by 2035. Likewise, the study concluded that over $13 billion dollars may be generated with a strong program, including a total investment boost of 0.25% during the first year.
Business representatives have voiced their enthusiastic support that Texas continue to have a strong R&D Credit incentive program. Senate Bill 2206 and House Bill 4393 are first steps towards making that a reality by expanding the R&D Credit and avoiding its expiration.

DOJ Narrows Crypto Enforcement to Individuals

On April 7, in a significant policy shift, the U.S. Department of Justice (DOJ) announced via the release of a memorandum that it will no longer pursue criminal enforcement actions that effectively impose regulatory frameworks on digital asset companies.
The memorandum criticizes efforts under the previous administration to pursue a “reckless strategy of regulation by prosecution” and formalizes the DOJ’s support for President Trump’s Executive Order 14178, which directs federal agencies to promote open access to blockchain networks and banking services for lawful crypto users.
The memorandum directs prosecutors to prioritize crypto cases that hold accountable individuals who (i) cause financial harm to digital asset investors and consumers, and/or (ii) use digital assets in furtherance of other criminal conduct, such as funding terrorism. Specifically, the memorandum sets the following prosecutorial priorities:

Federal prosecutors are now discouraged from charging crypto-related regulatory violations unless they can prove the defendant acted willfully, with knowledge of the legal obligation they violated.
Prosecutors are further advised not to bring cases that hinge on whether a digital asset qualifies as a “security” or “commodity,” unless absolutely necessary and with prior approval from the Deputy Attorney General.
The DOJ will no longer pursue enforcement actions against platforms, custodians, or infrastructure providers solely for the activities of their users, unless those activities involve knowingly aiding or committing underlying criminal offenses.

Putting It Into Practice: This policy marks a decisive shift in the federal government’s posture toward digital assets, with criminal prosecution now reserved for intentional fraud and serious crimes. This development coincides with a broader shift among federal regulators in how they approach digital assets (previously discussed here, here, and here). For crypto platforms, developers, and financial institutions, the guidance offers greater certainty that good-faith compliance missteps will not be prosecuted as criminal conduct.
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