A Wave of Amendments to Texas Corporate Law: What Bank Holding Companies and Banks in Texas Need to Know
During the 2025 regular legislative session, Texas lawmakers passed a wave of bills affecting the corporate governance of corporations and other entities in Texas—including bank holding companies and their bank and non-bank subsidiaries organized under the laws of the State of Texas. Many of these amendments impact the Texas Business Organizations Code (the “TBOC”) and were effective immediately, while others will take effect on September 1, 2025.
This Client Alert provides a brief overview of three significant bills that were passed by the Texas Legislature amending Texas corporate law: Senate Bill 29, Senate Bill 1057, and Senate Bill 2411. Many of the amendments made to the TBOC will require Texas entities to amend their governing documents, such as their certificate of formation or bylaws, to take advantage of the amendments. Because of this, we further discuss what steps bank holding companies and banks in Texas—including national banks who have elected to be governed by Texas law—should take to avail the benefits of these amendments to Texas law.
National banks with their main office or any branch office in Texas may also be impacted by these changes to Texas law if such entities have elected to follow the corporate governance provisions of the law of the State of Texas (in accordance with 12 C.F.R. § 7.2000 and to the extent not inconsistent with applicable Federal banking statutes or regulations, or bank safety and soundness).
Senate Bill 29 – New Corporate Governance Provisions
Senate Bill 29 is perhaps the most consequential piece of legislation passed this year regarding Texas corporate law and has garnered nationwide publicity and notoriety. Senate Bill 29 was immediately effective when signed into law by Texas Governor Greg Abbott and contains a host of new entity governance provisions that apply to Texas entities, many of which must be affirmatively adopted in the entity’s governing documents. Below is a summary of a few noteworthy examples:
A new Section 21.419 has been added to the TBOC providing that officers and directors of a Texas corporation—including bank holding companies and banks—will be entitled to a presumption that they acted in good faith, on an informed basis, in furtherance of the corporation’s interests and in obedience to the law and the corporation’s governing documents. This new Section 21.419 of the TBOC applies to Texas for-profit corporations that have voting shares listed on a national securities exchanges or that have included in their governing documents an affirmative election to be governed by this new provision. This addition to the TBOC is viewed as a codification of the so-called “business judgment rule” for corporations. The new provision also provides that directors and officers of such publicly traded or electing corporation (including a bank holding company or bank) are not liable to the corporation or its shareholders for their acts or omissions, or breaches of duty, unless the claimant proves fraud, intentional misconduct, an ultra vires act or a knowing violation of law.
What to do: We recommend that the boards of directors of Texas bank holding companies and banks carefully consider and discuss whether amending their governing documents to affirmatively elect to be governed by Section 21.419 of the TBOC would be in the best interest of the corporation or bank and its shareholders.
There are numerous pros and cons that must be weighed before making a decision, including, for example, whether it is actually in the best interest of the corporation or the bank to insulate its officers from actions that may be negligent, grossly negligent, dishonest or unethical yet do not rise to the level of constituting “fraud, intentional misconduct, an ultra vires act or a knowing violation of law,” which are often more difficult to prove.
Ultimately, any bank holding company or bank that affirmatively elects to be governed by Section 21.419 of the TBOC should qualify that such election is subject to all applicable federal and state banking laws and regulations, as well as safe and sound banking practices.
Texas entities may now include in their governing documents a waiver of jury trial concerning internal entity claims (that is, claims involving the internal affairs of the entity).
What to do: An entity’s governing documents must be amended to affirmatively adopt this language, and we recommend this language be included in the governing documents of bank holding companies and banks in Texas. However, corporations should be mindful that the Texas Constitution guarantees the right to a jury trial, and future litigation in Texas may question the enforceability of this TBOC provision permitting the governing documents of a Texas corporation to unilaterally waive shareholders’ rights to a jury trial without their informed and express agreement.
Entity governing documents can specify an exclusive court forum and venue for internal entity claims.
What to do: Many bank holding companies and banks already have “exclusive forum” provisions in their bylaws. Nevertheless, this amendment to Texas law permits a Texas entity to choose the Texas Business Court as the exclusive forum and venue for internal entity claims. We recommend “exclusive forum” provisions be amended to address this change.
Authorizes a publicly traded Texas corporation (or an electing Texas corporation with more than 500 shareholders) to establish in its governing documents an ownership threshold for shareholder derivative actions, with the threshold not to exceed three percent (3%) of its outstanding shares.
What to do: We recommend that the boards of directors of all eligible Texas bank holding companies and banks consider and discuss whether amending their governing documents to establish this ownership threshold for shareholder derivative actions would be in the best interest of the corporation or bank and its shareholders.
The TBOC has been amended to provide that owner inspection rights do not apply to emails, text messages and similar electronic communications and social media account information (unless such items effectuate an action by the entity). Furthermore, for publicly-traded corporations, shareholder records inspection rights are now severely limited if the requesting shareholder has any pending litigation or derivative proceeding with the corporation.
Senate Bill 1057 – Restrictions on Shareholder Proposals for Public Companies
Senate Bill 1057 will become effective on September 1, 2025 and will make a number of amendments to the TBOC that are available to any “nationally listed corporation”, which is defined as a Texas corporation that (1) has a class of equity securities registered under Section 12(b) of the Securities Exchange Act of 1934; (2) is admitted to listing on a national securities exchange; and (3) either (a) has its principal office in Texas or (b) is admitted to listing on a stock exchange that has its principal office in Texas and has received approval by the Texas Securities Commissioner to act as a securities exchange under provisions of Subchapter C of Texas Government Code Chapter 4005.
Any “nationally listed corporation” may opt into the new provisions by amending its governing documents and providing notice of the opt-in amendment to shareholders in any proxy statement prior to the effectiveness of the amendment. The changes made by Senate Bill 1057 are not available to private corporations.
In short, Senate Bill 1057 would prohibit any shareholder of a nationally listed corporation that has opted into the provision from submitting a proposal for consideration at a meeting of shareholders unless the shareholder (or group of shareholders): (1) owns at least the lesser of $1 million of market value of voting shares or 3% of the corporation’s voting shares; (2) has owned and continues to own those shares for at least six months prior to and through the shareholders meeting; and (3) solicits holders of at least 67% of the voting shares to vote on the proposal.
Director nominations would not be subject to this ownership threshold.
A public company that opts into this new provision in the TBOC must provide notice of the opt-in amendment to shareholders in any proxy statement prior to the effectiveness of the amendment to the governing documents. However, it does not require shareholder approval of such amendment. Bylaws are one of the “governing documents” of a corporation, and bylaws may generally be amended by unilateral action of the board of directors without shareholder approval (unless prohibited by the existing provisions of its bylaws or certificate of formation).
Furthermore, a public company that opts into this new provision must include in any proxy statement provided to shareholders specific information about the process by which a shareholder (or group of shareholders) may submit a proposal on a matter requiring shareholder approval, including information as to how shareholders may contact other shareholders for the purpose of satisfying the ownership requirements in these new provisions.
Senate Bill 2411 – Additional Corporate Governance Changes to Consider
Senate Bill 2411 will become effective on September 1, 2025 and amends a wide variety of provisions of the TBOC, many of which derive from recent changes in the Model Business Corporation Act and Delaware entity statutes. Some of the more substantive amendments are summarized below.
Authorizing Texas corporations, including bank holding companies and banks, to include provisions in their certificates of formation that exculpate officers from monetary liability for breaches of duty of due care to the same extent that governing persons can be exculpated.
What to do: Boards of directors of all Texas bank holding companies and banks should consider and discuss whether to amend their certificates of formation to adopt this language. Note, however, that an amendment to an entity’s certificate of formation requires approval by both the board of directors and the shareholders.
Any exculpation of officers should also be qualified and subject to all applicable federal and state banking laws and regulations, as well as safe and sound banking practices.
Authorizing the board of directors of a for-profit corporation, without shareholder approval, to effect certain limited amendments to the corporation’s certificate of formation, including forward and reverse stock splits, subject to specified conditions.
Trump Gold Card – Considerations for US Businesses and Foreign Investors
In recent days, interest has increased around a proposed new immigration initiative known as the “Trump Gold Card” or “Trump Card Visa,” announced by President Donald Trump and promoted via his campaign platforms and a newly launched website. However, although there is a website, there has been no official legal action taken, either administratively or legislatively, to implement a “Trump Gold Card” or “Trump Card Visa” program.
Gold Card Website and Registration Form
The recently launched site, trumpcard.gov, allows individuals, businesses, and others to register their interest in the Gold Card concept. The site collects basic information—such as your name, geographic region, and whether you are signing up for yourself or someone else—and promises to notify registrants “the moment access opens.”
Importantly, this is not an application for a visa, but rather a mailing list to track interest. The site does not provide a legal framework or guidance regarding immigration eligibility, processing timelines, or the legal status of the proposed visa.
New Visa Process Would Require Legislation
While Trump has suggested that the Gold Card could provide benefits similar to those of a green card, including a path to permanent residence, creating a new immigrant visa category would require an act of Congress. At this time, no legislation has been introduced that would authorize the Gold Card or define its requirements, benefits, or limitations.
The Trump administration has suggested that the program might expedite or enhance pathways for wealthy individuals who are willing to invest heavily in the United States. However, offering immigration benefits—particularly exemptions from global tax obligations or expedited citizenship—without Congressional action would likely face legal challenges.
Potential Impact of the Gold Card on EB-5
Speculation has arisen that the Gold Card could replace or supplement the existing EB-5 Immigrant Investor Program, which currently allows foreign nationals to obtain green cards by investing between $800,000 and $1.05 million into U.S. job-creating projects. However, significantly revising or replacing the EB-5 program would require new legislation, regulatory guidance, and agency implementation, and it may be too soon to speculate on the Gold Card’s future.
Those interested in being included in the Gold Card interest database or exploring other established investor visa options should consult with experienced legal counsel.
Justice Kavanaugh Signals Conservative Vote Toward Imposing a Pre-Certification Standing Requirement Under FRCP 23
On June 5, 2025, the Supreme Court declined to decide the question, certified in Laboratory Corp. of America Holdings v. Davis, as to “[w]hether a federal court may certify a class action pursuant to Federal Rule of Civil Procedure 23(b)(3) when some members of the proposed class lack any Article III injury.” The Court instead dismissed the case as improvidently granted, due to apparent procedural complexities in how the case was presented on appeal.
Justice Kavanaugh nonetheless weighed in. In a lone dissenting opinion, Kavanaugh made clear where he stands, concluding that “Rule 23 and this Court’s precedents make this a straightforward case” requiring standing questions to be decided at the pre-certification stage of class proceedings. Specifically, “a federal court may not certify a damages class that includes both injured and uninjured members. Rule 23 requires that common questions predominate in damages class actions. And when a damages class includes both injured and uninjured members, common questions do not predominate.”
Kavanaugh’s dissenting opinion separately laments the “serious real-world consequences” and undue pressure that inflated, overbroad classes place on defendants—often “coerc[ing] businesses into costly settlements that they sometimes must reluctantly swallow rather than betting the company on the uncertainties of trial.”
While Kavanaugh’s position presumably conforms with many of the other conservative justices, the Court’s per curiam order dismissing the case leaves a current circuit split intact for now as to the proper resolution of standing questions at the pre-certification stage. The question should soon be presented to the Court again on a cleaner procedural vehicle rising through the appellate courts.
“Overbroad and incorrectly certified classes threaten massive liability—here, with potential damages up to about $500 million per year. That reality in turn can coerce businesses into costly settlements that they sometimes must reluctantly swallow rather than betting the company on the uncertainties of trial. . . . . [T]he coerced settlements substantially raise the costs of doing business. And companies in turn pass on those costs to consumers in the form of higher prices; to retirement account holders in the form of lower returns; and to workers in the form of lower salaries and lesser benefits. So overbroad and incorrectly certified classes can ultimately harm consumers, retirees, and workers, among others. Simply put, the consequences of overbroad and incorrectly certified damages class actions can be widespread and significant.” (Kavanaugh, J., dissenting)
DOJ Announces New White Collar Crime Policy
Varnum Viewpoints:
Focus on Individuals: The DOJ will prioritize prosecuting individual offenders over corporations in most white collar cases.
Incentives for Corporate Cooperation: Companies that self-report and cooperate may avoid prosecution under the revised enforcement policy, which emphasizes shorter resolution periods.
Streamlined Investigations: The DOJ aims to reduce the length, cost, and burden of white collar investigations and monitoring, addressing business concerns.
Following months of uncertainty and speculation regarding the future and scope of white collar enforcement under Attorney General Pam Bondi, the United States Department of Justice Criminal Division has publicized its new policy on white collar crime.
In a memorandum dated May 12, 2025, and in a speech the same day, Criminal Division head Matthew R. Galeotti, unveiled three “core tenets” that will guide the division’s approach to white collar investigations and prosecution: focus, fairness, and efficiency. Galeotti followed up on these announcements in another speech delivered on June 10, 2025.
These core tenets are accompanied by a renewed focus on the prosecution of individuals committing crimes affecting federal benefits programs, the U.S. economy and markets, and national security, with a diminished emphasis on holding companies responsible for the actions of individual directors, officers, and employees.
Focus
Galeotti identified four broad areas of focus for the Criminal Division:
Waste, fraud, and abuse in government programs
Complex frauds that victimize United States investors and weaken the integrity of markets
Crimes that exploit U.S. monetary systems
Threats to the United States economy, competitiveness, and national security
Within these areas, Galeotti specified “high impact” offenses that the Criminal Division will prioritize, such as healthcare, program and procurement, investment, and elder fraud, and “fraud that threatens the health and safety of consumers;” bribery and money laundering (particularly that impact United States interests, threaten national security, or facilitate the activities of cartels, transnational criminal organizations, or foreign terrorist organizations); customs, trade, tariff, and sanctions violations; crimes involving foreign adversary companies listed on United States exchanges; and crimes involving digital assets that victimize investors and consumers or that facilitate other criminal conduct.
Fairness
The May 12 announcements continue the DOJ’s trend of prioritizing the prosecution of individuals over corporations. Amplifying Deputy Attorney General Sally Yates’s message in 2015, Galeotti stated, “The Department’s first priority is to prosecute individual criminals” involved in corporate crime because “[i]t is individuals—whether executives, officers, or employees of companies—who commit these crimes, often at the expense of shareholders, workers, and American investors and consumers.”
Moreover, the May 12 memorandum observes that “not all corporate misconduct warrants federal prosecution,” so “civil and administrative remedies directed at corporations, are often appropriate to address low-level corporate misconduct[.]” This emphasis on prosecuting individuals continued in Galeotti’s June 10 remarks, when he observed that recently published guidelines for DOJ investigations and enforcement of the Foreign Corrupt Practices Act reflected “common sense principles, such as focusing on specific misconduct of individuals, rather than collective knowledge theories.”
Accompanying this focus on individual liability is a revised Corporate Enforcement Policy that provides a “clear pathway” to criminal declination for proactive, cooperative companies. If declination is not appropriate, corporate resolutions should last no longer than three years except in “exceedingly rare cases.” The Criminal Division also plans to review existing agreements for early termination and will consider the duration of the post-resolution period, a substantial reduction in the company’s risk profile, the extent of remediation, the maturity of the corporate compliance program, and whether the company self-reported the misconduct. Going forward, prosecutors must regularly assess resolution agreements to determine whether early termination is appropriate.
Efficiency
Recognizing that white collar investigation and prosecution are important, but can be costly and intrusive to businesses, the division announced new instructions for the conduct of corporate investigations. First, prosecutors must take all reasonable measures to minimize the length and collateral impact of investigations and make charging decisions as swiftly as possible. Galeotti’s office will track investigations to ensure they do not linger, and he reiterated in his June 10 remarks that the Criminal Division will move investigations “expeditiously” and “do its part to charge or decline quickly.” Second, as discussed more fully in a separate memorandum, the Criminal Division will limit the use and scope of monitors, with a new emphasis on narrowly tailored mandates and minimizing expense, burden, and interference with the business.
Analysis
Galeotti’s recent speeches and May 12 memorandum suggest the reports of the death of federal white collar criminal enforcement might have been exaggerated. The new policies reflect this administration’s keen interest in using “white collar” tools to pursue drug cartels, transnational criminal organizations, foreign terrorists, and foreign trade-related offenses, but many of the areas of focus in white collar prosecution are not new. In his June 10 speech, Galeotti emphasized that the DOJ remains committed to “an aggressive and robust strategy to investigate and prosecute white-collar and corporate crime.”
Considering ongoing attrition at the DOJ and high-profile dismissals and clemency in corporate, fraud, crypto, and public corruption cases, how the DOJ will deploy resources toward traditional white collar crime is an open question. For example, the Criminal Division plans to devote resources to prosecuting “trade and customs fraudsters” who circumvent the “rules and regulations that protect American consumers.” Yet this initiative seems at odds with Executive Order 14294 issued on May 9, 2025, which states the policy of the United States is to disfavor criminal enforcement of federal regulations.
Galeotti’s disdain for “lengthy and sprawling investigations” in his June 10 remarks, and emphasis on efficiency and sensitivity to the costs of investigations suggest that targets of investigations might have a receptive audience with DOJ supervisors if investigations linger or spiral in scope. But the decision whether and when to appeal to supervisors must be carefully considered. Galeotti urged targets and their counsel to exhaust discussions with line prosecutors to narrow disputed issues and advised them to be “conscientious about what, when, and how you appeal the decisions of Trial Attorneys and AUSAs.” Galeotti specifically warned that prematurely seeking relief, “mischaracterizing prosecutorial conduct, or otherwise failing to be an honest broker” will be “counter-productive to your appeals” and might undermine otherwise meritorious arguments.
The new white collar policy should be considered in context with the revised corporate enforcement policy, the whistleblower program, and the Pilot Program on Voluntary Self-Disclosures (VSD) for Individuals that rolled out in April 2024, which rewards certain eligible insiders with non-prosecution agreements in exchange for self-disclosure. It remains to be seen how the Criminal Division’s emphasis on individual responsibility will affect its implementation of its whistleblower and individual VSD programs.
Individuals, organizations, and counsel should keep in mind that these policies govern the DOJ Criminal Division only. They do not bind the 93 U.S. Attorneys’ Offices, the other litigating components at the DOJ (such as the Civil, Antitrust, Environment and Natural Resources, and National Security Divisions), other federal agencies (such as the Securities and Exchange Commission), or state and local authorities. These policies might have significant persuasive weight in how U.S. Attorneys, other DOJ components, and other agencies approach white collar and corporate enforcement, but it is important to consider any multi-jurisdictional aspects at play.
Nevada Enacts Law Allowing Remote Licensing for Internet Consumer Lenders
On May 28, Nevada Governor Joe Lombardo approved SB 437, creating a new framework for internet-based consumer lenders that lend to Nevada residents. The law defines an “Internet consumer lender” as any entity that exclusively offers or facilitates consumer loans online and becomes effective on October 1, 2025.
The law aims to modernize Nevada’s licensing regime by recognizing online-only lending models and reducing barriers for out-of-state companies. It also imposes safeguards to ensure Nevada residents receive legal protections grounded in state law. The new requirements will apply only to loans entered into on or after October 1.
The legislation introduces several key provisions, including:
Remote license eligibility. Lenders may apply for a Nevada license tied to an office located outside the state. Unlike traditional lenders, internet consumer lenders are not required to maintain a separate Nevada location to obtain licensure.
In-state law and venue requirements. Loan agreements with Nevada residents must state that Nevada law governs the agreement and that any legal or arbitration proceedings will take place in Nevada. Any conflicting terms are void and unenforceable.
Exemption from co-location restrictions. Lenders may operate in a shared office or alongside other businesses, avoiding restrictions that typically prohibit lending operations from sharing space with unrelated commercial activity.
Putting It Into Practice: Nevada’s new law comes as state legislatures are increasingly stepping into regulatory gaps left by federal agencies (previously discussed here and here). As states continue to expand their regulatory practices, online lenders should ensure their compliance programs are responsive to emerging state-level licensing and consumer protection rules.
Illinois Delays Interchange Fee Ban by One Year
On June 1, the Illinois General Assembly passed a bill that, if enacted, will delay the effective date of the Interchange Fee Prohibition Act by one year, from July 1, 2025, to July 1, 2026.
The law prohibits financial institutions, card networks, and processors from assessing interchange fees on the tax and gratuity components of credit and debit card transactions if the merchant informs the acquirer bank or its designee of the tax or gratuity amount during the authorization or settlement process. The Act also prohibits covered entities from altering or manipulating interchange fee calculations on the non-tax or non-gratuity portion of a transaction to circumvent the fee prohibition. Additionally, it bars the use or transfer of transaction data for any purpose other than processing the transaction or complying with law, and provides that violations constitute a violation under the Illinois Consumer Fraud and Deceptive Business Practices Act.
The delay follows a federal lawsuit filed in August 2024 by several organizations representing banks and credit unions, and comes after a federal court earlier this year partially enjoined the law—allowing it to take effect only against certain entities, including credit unions and in-state banks (previously discussed here and here). Plaintiff’s arguments include:
Preemption under federal banking statutes. Plaintiffs allege the law is preempted by the National Bank Act, Home Owners’ Loan Act, and Federal Credit Union Act because it interferes with powers granted to federally chartered institutions to receive deposits, extend credit, process electronic transactions, and collect fees associated with those services.
Conflict with the ETFA. The complaint argues that the law is inconsistent with federal regulations under the Electronic Fund Transfer Act, which permit issuers to charge interchange fees based on the full value of debit card transactions, without excluding taxes or gratuities.
Operational and technological infeasibility. Compliance would allegedly require significant and costly changes to global payments infrastructure, including modification of POS systems, development of new transaction data standards, and implementation of a manual refund process for tax and gratuity-related interchange charges.
Putting It Into Practice: Illinois’s delay gives courts and businesses more time to figure out if the law can be enforced—but the federal lawsuit will still play an important role, especially on the scope of federal preemption.
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OCC Rejects Calls to Roll Back Preemption Rules
On June 9, Acting Comptroller of the Currency Rodney Hood issued a letter rejecting the Conference of State Bank Supervisors’ (CSBS) request that the OCC rescind its 2011 preemption regulations.
The OCC ‘s letter signals that its preemption framework is foundational to the dual banking system, emphasizing that national banks must be able to operate under a consistent framework across state lines. The agency defended its existing rules as consistent with federal law and Supreme Court precedent, including the standard that preemption applies where state laws “prevent or significantly interfere with” the exercise of national bank powers.
Responding to criticism that the agency’s 2011 regulations conflict with Dodd-Frank or more recent executive orders, Hood asserted that the OCC has already evaluated its rules under these authorities and reaffirmed their validity. He further dismissed arguments that preemption is anti-competitive, stating instead that it enables national product offerings and broader economic growth.
Putting It Into Practice: The OCC’s letter sends a clear message that the agency will continue defending a broad preemption framework for national banks. While other regulators have scaled back their oversight roles (previously discussed here), the OCC is moving in the opposite direction. While banks may find reassurance in the regulatory stability the OCC is signaling, they must still carefully monitor emerging state-level requirements.
letter rejecting the Conference of State Bank Supervisors’ (CSBS) request that the OCC rescind its 2011 preemption regulations. The OCC ‘s letter signals that its preemption framework is foundational to the dual banking system, emphasizing that national banks must be able to operate under a consistent framework across state lines. The agency defended its existing rules as consistent with federal law and Supreme Court precedent, including the standard that preemption applies where state laws “prevent or significantly interfere with” the exercise of national bank powers. Responding to criticism that the agency’s 2011 regulations conflict with Dodd-Frank or more recent executive orders, Hood asserted that the OCC has already evaluated its rules under these authorities and reaffirmed their validity. He further dismissed arguments that preemption is anti-competitive, stating instead that it enables national product offerings and broader economic growth. Putting It Into Practice: The OCC’s letter sends a clear message that the agency will continue defending a broad preemption framework for national banks. While other regulators have scaled back their oversight roles (previously discussed here), the OCC is moving in the opposite direction. While banks may find reassurance in the regulatory stability the OCC is signaling, they must still carefully monitor emerging state-level requirements. ” >Listen to this post
Takeaways from the 2025 NYU International Hospitality Investment Forum (IHIF)
Last week in New York, hospitality and lodging industry leaders convened at the 2025 NYU International Hospitality Investment Forum (IHIF) to assess the current state of the industry. Panels of economists and industry stakeholders emphasized how current macroeconomic complexities are reshaping hospitality capital markets and investment strategies for the remainder of 2025 and beyond.
The first quarter of 2025 saw increased transaction volume across the industry, but various challenges have tempered expectations for the remainder of the year. Economists generally expect the imposition of broad-scale tariffs announced in early April (described by one speaker as the largest trade shock in a century) to exacerbate persistent inflationary pressures, which already outpaced ADR growth over the last two years. The tariff announcements and resulting uncertainty have also led to lower consumer sentiment overall, and a significant decrease in international travel to the United States has been well publicized.
There are, however, several reasons to remain optimistic. First, despite a sharp decline in consumer sentiment over the last six months, consumer spending remains robust—a continuation of a notable divergence between those two metrics over the past few years. Second, inbound international tourism largely rebounded in April after the March lows, leading some presenters to theorize that the timing of the Easter holiday (a popular time for European tourists to travel) was the primary driver instead of international backlash to tariff policy. Third, the ongoing housing crisis and sustained remote work flexibility continue to boost demand for extended stay hotels, which are performing exceptionally well. Finally, in keeping with a consistent post-COVID trend, surveys continue to reflect all-time high interest in travel, both domestically and abroad, with households reporting a desire to take more trips and spend more on them.
In the current economic environment, speakers noted that the financial engineering used to generate returns over the last decade is giving way to fundamentals-based value creation. Success requires more selective deal-making and often a healthy dose of creativity. Bridging the gap between buyer and seller expectations may require earn-outs or similar structures, and filling capital stacks may require tapping into an increasingly deep pool of private credit. Where available, adaptive reuse and other tax incentives may make certain deals possible that otherwise would not be. It also remains to be seen which industry operators can best leverage the emerging use of AI in booking travel, a practice that remains a small fraction of overall activity, but which saw a 400% increase in the last 9 months alone.
Ultimately, despite the near-term headwinds, IHIF participants expressed cautious optimism about the medium- and long-term industry fundamentals. “Uncertainty” may have been the word of the week, but there are few industries over the last decade that have proved more resilient in the face of uncertainty.
Executive Summary – New York Regulation and Disclosure – What Mortgage Applicants Need to Know
A new law in New York took effect on June 11, 2025 ,requiring banking organizations, licensed lenders, and mortgage bankers provide a disclosure pamphlet titled “What Mortgage Applicants Need to Know” (the “Pamphlet”).
Effective immediately, the applicable version of the Pamphlet (linked below) must be provided to an applicant applying for a residential mortgage loan no later than the third business day after the date the applicant’s loan application is received. On the New York Department of Financial Services (“NYDFS” or “the Department”) website there are links to various versions of the Pamphlet in English, Spanish, Bengali, Chinese, Haitian, Italian, Korean, Polish, Russian, Urdu, and Yiddish.
Below is a summary of the new law.
INTRODUCTION
NY AB 9686 was signed into law by New York State Governor Kathy Hochul on December 30, 2024, took effect on June 11, 2025, and is now part of New York Banking Law Chapter 566 (“NY 566”). To underscore the point above, under NY 566, the Pamphlet must be provided to an applicant applying for a residential mortgage loan no later than the third business day after the date the applicant’s loan application is received, and in the form prescribed by the Department, including being accessible in multiple languages. The Pamphlet can be provided to applicants via electronic communications, including via email, or by a hyperlink to the Pamphlet posted on the Department’s website.
You can view NY AB 9686 here.
SUMMARY
The term “Banking Organization” in the New York Banking Law is defined as all banks, trust companies, private bankers, savings banks, safe deposit companies, savings and loan associations, credit unions, and investment companies. This regulation only applies to entities that are licensed or chartered under New York law, so the new law would not apply to federally chartered institutions. Although mortgage brokers are not included in the definition of banking organization, it is recommended they comply with this new law and provide the Pamphlet or a link to the version that is most appropriate for the applicant.
The Pamphlet must make it clear that applicants have the right to:
Compare and negotiate the charges of different mortgage brokers and lenders to obtain the best loan possible.
Ask their mortgage broker to explain such person’s responsibilities within the mortgage lending process.
Know how much the mortgage broker is compensated by the applicant and the lender for their loan.
Receive a clear and truthful explanation of the terms and conditions of the loan.
Know if the loan being offered is a fixed-rate or adjustable-rate mortgage loan, whether the loan can be transferred or refinanced, the exact amount of their monthly loan payments (including any projected escrow payments), the final annual percentage rate, and the amount of regular payments at the loan’s closing.
Ask for a loan estimate detailing all loan and settlement charges before they agree to the loan and pay any fees, including, without limitation, loan application fees, title search and insurance fees, lender’s attorney fees, property appraisal charges, inspections, recording fees, late payment fees, transfer taxes, point and origination fees, escrow account balances, and for which services a loan applicant can and cannot shop. They are entitled to receive such estimate within three business days of applying for a loan.
Obtain credit counseling before closing a loan.
Decide whether or not to finance any portion of the points or fees.
Refuse to purchase credit insurance for any mortgage loan.
Have their property appraised by an independent licensed professional and to receive a copy of the appraisal.
Not be subject to deceptive marketing practices.
Ask for the Consumer Financial Protection Bureau’s (“CFPB”) booklet, “Your home loan toolkit.”
Receive the following documents, and every document otherwise required to be given to them at closing under federal and New York state law:
Loan estimate,
Closing disclosure.
Know what deposits and fees are not refundable if they decide to cancel the loan agreement.
Receive in writing the reason for the denial or conditional approval of their loan application.
Know, if refinancing, that they may cancel a loan within three days of the closing by providing written notification of cancellation to the licensed lender or banking institution.
Receive the Closing Disclosure three days before the closing takes place.
Have any lending disputes resolved in a fair and equitable manner.
Receive a credit decision that is not based upon their race, color, national origin, religion, sex, family status, sexual orientation, disability, or whether any income is from public assistance.
File a complaint with the Department or the CFPB if they believe that a mortgage broker or any other entity licensed by the Department or the CFPB has violated any rules, regulations or laws governing such person’s conduct in working with them to get or process a mortgage loan.
File a complaint with the New York State Department of State or the CFPB if they believe that a real estate broker has violated any rules, regulations or laws governing such person’s conduct in working with them to purchase a home.
CONCLUSION
This new legislation mandates disclosure of a series of best practices for the residential mortgage industry. NYDFS is working on additional versions of the Pamphlet in French and Arabic that are expected to be released in the coming weeks.
Louisiana and Connecticut Advance Earned Wage Access Laws
Louisiana and Connecticut recently passed legislation establishing regulatory frameworks for earned wage access (EWA) providers.
Connecticut’s SB 5140 passed the legislature on June 4 and awaits Governor Ned Lamont’s signature. The bill would introduce EWA services to the state following nearly two years of regulatory uncertainty. It classifies EWA as a loan but establishes a tailored carveout with specific fee caps and exemptions for employer-based models.
In its revised framework, Connecticut:
Caps fees below all other states. Providers may not charge more than $4 per advance or $30 per month in total fees. These caps apply in lieu of the state’s general 36% APR limit under small loan law.
Restricts EWA availability. Advances are capped at $750 and limited to once per pay period unless the consumer can access at least 75% of earned wages.
Requires wage verification. Providers must verify earned wages through payroll data or other Commissioner-approved methods.
Prohibits default tipping practices. Default tip amounts must be set at $0, and providers cannot allow multiple advances on the same earned wage from different services.
Restricts enforcement mechanisms. Class action waivers are prohibited, and traditional collection practices—including litigation and debt sales—are banned.
Louisiana’s HB 368 has already been enacted, creating the “Louisiana Earned Wage Access Services Act,” which codifies that EWA providers are not considered lenders, money transmitters, or debt collectors so long as they comply with the statute’s consumer protection requirements.
Under the new law, Louisiana EWA providers must:
Offer at least one no-cost option. Consumers must have a clear way to access funds without paying fees or tips.
Allow cancellation at any time. Providers cannot charge fees for cancellation and must clearly disclose all terms upfront.
Reimburse overdraft fees. Providers must cover any bank fees caused by early or excessive debits, unless fraud is involved.
Disclose the voluntary nature of tips. Consumers must be informed that tips are not required and will not impact access to services.
Prohibitions on EWA providers. The act prohibits EWA providers from suing consumers, making collection calls, using third-party debt collectors, or conditioning service levels on tipping behavior. Providers that charge fees must also submit annual transaction, revenue, and complaint data to the Office of Financial Institutions.
Putting It Into Practice: With the passing of both laws, over a dozen states have now adopted EWA-specific frameworks (previously discussed here, here, here, and here). Connecticut’s aggressive fee caps and verification mandates may push some direct-to-consumer models out of the state, while Louisiana’s balanced approach reflects the emerging industry standard.
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CFPB Moves Forward with Debt Relief Suit Over $3.4M in Alleged Advance Fees
On June 10, the CFPB moved to reopen its 2021 enforcement action against the final remaining defendant in a student debt relief case involving over $3.4 million in alleged illegal advance fees. The Bureau, under Acting Director Russel Vought, told the U.S. District Court for the Central District of California it will proceed against the individual defendant following a four-month stay.
The CFPB previously settled with the other defendants in the case, including the company and its nominal owner, who agreed to dissolve the business and pay a $2,000 civil penalty based on an inability to pay. The current motion seeks to lift the administrative stay and proceed with summary judgement briefing against the final defendant.
In its complaint, the CFPB alleges that the defendant:
Controlled operations of an unlawful debt-relief business. The Bureau claims the defendant ran all aspects of a student loan assistance company that charged illegal upfront fees to over 3,3000 consumers between 2015 and 2019.
Violated the Telemarketing Sales Rule by requesting fees before delivering results. According to the CFPB, consumers were required to pay between $695–$795 upfront, plus $39 monthly fees, before any loan modification or consolidation had been completed.
Transferred unlawful fees to a shell company for personal use. The CFPB alleges that more than $400,000 was funneled to a separate company and used for luxury goods, casino purchases, and nightclub visits.
Putting It Into Practice: While the CFPB has pulled back from enforcing certain actions and scaled back its overall enforcement activity, regulating debt relief practices remains a clear priority under the new administration (previously discussed here and here). Financial institutions should expect continued enforcement of debt relief practices during the new administrations tenure.
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DOJ Moves to End $13 Million Redlining Consent Order
On May 28, the U.S. Department of Justice filed a motion to terminate its redlining consent order against a New Jersey-based bank. The five-year order, entered in September 2022, resolved allegations that the banks violated the Fair Housing Act and Equal Credit Opportunity Act by engaging in a pattern of unlawful redlining in majority-Black and Hispanic neighborhoods across the Newark metropolitan area.
According to the DOJ’s original complaint and consent order, the bank allegedly avoided offering home loans in majority-minority census tracts while focusing mortgage services in predominantly white areas. The consent order required the bank to take several corrective actions, including:
Establishing a $12 million loan subsidy fund. The fund was to be targeted to increase mortgage credit availability in majority-Black and Hispanic neighborhoods.
Investing $750,000 in advertising and outreach. These funds were used to promote mortgage credit opportunities in undeserved areas and generate applications from qualified borrowers.
Spending $400,000 on community partnerships. The bank was required to collaborate with nonprofit and government entities to deliver financial education, counseling, and related services.
Opening new branches and assigning loan officers. The bank committed to opening at least two full-service branches and assigning at least four loan officers to focus on majority-Black and Hispanic tracts.
Undergoing compliance oversight and fair lending program review. The consent order also mandated third-party training, internal policy assessments, and regular reporting to the DOJ.
The DOJ’s motion to terminate the order is currently pending with the U.S. District Court for the District of New Jersey.
Putting It Into Practice: Federal agencies are steadily stepping back from redlining enforcement, accelerating a trend away from the expansive fair lending cases brought in prior years (previously discussed here, and here). While lenders must continue to monitor for discriminatory effects in their credit operations, the likelihood of federal redlining actions based on marketing patterns or statistical disparities appears to be diminishing.
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