Legislative Highlights May 2025

Senators Introduce Bipartisan Bill to Protect Employees When Businesses File for Bankruptcy

U.S. Senate Democratic Whip Dick Durbin (D-Ill.), Ranking Member of the Senate Judiciary Committee, and U.S. Sen. Josh Hawley (R-Mo.) on April 91 re-introduced the “Protecting Employees and Retirees in Business Bankruptcies Act.” The act would modify chapter 11 procedures by expanding available claims for employees and retirees and granting them improved priority, while placing restrictions on excessive compensation for executives. Specifically, the Protecting Employees and Retirees in Business Bankruptcies Act would:

• Double the maximum value of employee wage claims entitled to priority payment and allow additional priority claims for each employee benefit plan. It also eliminates the restriction that priority wage and benefit claims must be earned within 180 days of the bankruptcy filing to be entitled to priority, and would allow additional priority claims for workers’ severance pay.
• Tighten the conditions under which collective bargaining agreements can be rejected in bankruptcy. It also toughens the procedures through which retiree benefits can be reduced or eliminated.
• Raise the threshold for obtaining court approval for executive bonuses and other excessive payouts to senior executives, the company’s 20 highest-paid employees, and highly paid consultants. It also ensures that company insiders cannot retain their retirement or health benefit plans if rank-and-file workers have lost their benefits through the bankruptcy process.
• Re-center the chapter 11 process by clarifying that the principal purpose of chapter 11 is to preserve jobs and economically productive activity to the greatest extent possible.

Cosponsoring the legislation are U.S. Sens. Brian Schatz (D-Hawaii), Tammy Duckworth (D-Ill.), Amy Klobuchar (D-Minn.) and Sheldon Whitehouse (D-R.I.).

FTC Raises Privacy Concerns over 23andMe Bankruptcy

Federal Trade Commission (FTC) Chairman Andrew N. Ferguson issued a letter on March 312 to the U.S. Trustee regarding the 23andMe bankruptcy proceeding, expressing the concerns American consumers have with the potential sale or transfer of the company’s data. “Many Americans are concerned about the impact of a potential sale of their personal data, and I understand those concerns,” Ferguson said. “Consumers should be able to trust that companies will keep their promises, including when it comes to handling of sensitive information.”

23andMe filed for bankruptcy protection on March 23 amid weak demand for its ancestry testing kits. It has said that the bankruptcy process will not affect how it stores, manages or protects customer data.

“The FTC believes that, consistent with § 363(b)(1) of the Bankruptcy Code, these types of promises to consumers must be kept,” Ferguson wrote. “This means that any bankruptcy-related sale or transfer involving 23andMe users’ personal information and biological samples will be subject to the representations the company has made to users about both privacy and data security, and which users relied upon in providing their sensitive data to the company.”

Attorneys general, including New York Attorney General Letitia James,3 have questioned what would happen to the genetic data collected by 23andMe. The company’s privacy policies say that the data could be sold to other firms. James and other AGs have urged 23andMe’s customers to delete their genetic data.

Senate Banking Committee Passes GENIUS Act to Establish Regulatory Framework for Stablecoins

The Senate Banking Committee on March 13 passed4 (18-6) S. 919, the “Guiding and Establishing National Innovation for U.S. Stablecoins Act of 2025” or “GENIUS Act.” The legislation aims to establish a comprehensive regulatory framework for the issuance and regulation of payment stablecoins in the U.S. As the bill heads to the Senate for full approval, prospects for passage are favorable. House Financial Services Committee Chair French Hill (R-Ark.) has already signaled his intention to move forward with a similar proposal, the “Stablecoin Transparency and Accountability for a Better Ledger Economy Act” or “STABLE Act,” and President Donald Trump has indicated that he wants to sign payment stablecoin legislation.
 

Sen. Elizabeth Warren (D-Mass.) voiced5 her opposition to the legislation during the Senate Banking Committee’s vote on March 13, saying that the GENIUS Act would put Americans’ money, the economy and national security at risk. “The bill even invites scammers into the market by refusing to prohibit people convicted of fraud and money laundering from owning stablecoin companies. [Former chief executive officer of the cryptocurrency exchange FTX] Sam Bankman-Fried could buy a stablecoin company from prison and regulators would have no legal grounds to stop him under this bill,” Sen. Warren said in her opening remarks.

Missouri Senator Urges DOJ to Investigate FICO for Its ‘Monopoly’ over U.S. Credit Scores

Sen. Josh Hawley (R-Mo.) sent a letter on April 36 to Assistant Attorney General Gail Slater urging the U.S. Department of Justice (DOJ) to investigate Fair Isaac Corp. (FICO), the nation’s top credit-scoring company, for abusing its “monopoly” over the industry. “FICO dominates the business-to-business credit scoring market with a roughly 90 percent [share],” Sen. Hawley wrote in his letter. “FICO has exploited working Americans with its monopoly power for too long,” he added to Slater, who runs the DOJ’s antitrust division. “Antitrust scrutiny from your office is warranted.”

FICO rebutted Sen. Hawley’s claims on April 4. “The vast majority, approximately 99 percent, of FICO scores used for decisioning across the consumer credit industry are used outside mortgage originations. And even within the mortgage market, lenders originate nearly 30 percent of all mortgages outside the Fannie Mae and Freddie Mac programs but still choose to use FICO scores for those mortgages. The royalty collected by FICO remains a small percentage of the cost of the tri-merge credit report and score bundle (on average approximately 15 percent of the $80 to well over $100 tri-merge bundle cost), which is itself an exceedingly small share of overall mortgage closing costs,” the company said in a statement to Fox Business.7

House Votes to Repeal CFPB’s $5 Overdraft Cap

The Consumer Financial Protection Bureau’s (CFPB) $5 cap on overdraft fees, adopted in the final days of the Biden administration, is poised for repeal after a House vote.8 The House voted 217-211 on April 9 to clear a measure (S. J. Res. 18) that rescinds the CFPB’s rule under the Congressional Review Act. The House vote comes after the Senate voted (52-48) on March 27 to repeal the rule, and the resolution will head to President Donald Trump’s desk for signature.