Legislative Highlights April 2025

Trump Administration Removes Tara Twomey as EOUST Director

The Justice Department removed multiple senior career officials on March 7,1 including Tara Twomey, the head of the Executive Office for U.S. Trustees (EOUST). Jeffrey Ragsdale, the head of the Office of Professional Responsibility, and Liz Oyer, the U.S. pardon attorney, were also among those removed.

Twomey was appointed as director of the EOUST on Feb. 27, 2023, and prior to her appointment, she was the executive director of the National Consumer Bankruptcy Rights Center and Of Counsel to the National Consumer Law Center. She is a former clinical instructor and Fellow at the Legal Services Center of Harvard Law School and has been a Lecturer in Law at Stanford Law School and Boston College Law School.

During Twomey’s tenure, the U.S. Trustee Program (USTP) opposed the initial Purdue Pharma bankruptcy settlement, which sought to shield the Sackler family from lawsuits, arguing that it would inappropriately protect the family and that the Bankruptcy Code did not allow for such “third-party” releases. The objection went all the way to the U.S. Supreme Court, which later overturned the settlement.2

Twomey also worked to expand the use of video § 341 meetings of creditors nationwide for consumer cases in the wake of the COVID-19 pandemic. “The policy is the product of careful and deliberate preparations to ensure that the option for virtual meetings delivers on its promise of added efficiency while preserving the integrity of the bankruptcy system,” Twomey said in an ABI Journal article last year.3

As pointed out in a blog post by Prof. Robert M. Lawless,4 the executive directorship of the USTP is typically seen as a nonpolitical position, and Twomey’s predecessor, Clifford J. White III, served under both Republican and Democratic administrations.

Sen. Elizabeth Warren (D-Mass.) was critical of the Trump administration’s removal of Twomey as EOUST director. “President Trump’s decision to fire our nation’s bankruptcy watchdog will leave families in financial crisis unprotected from abuse and allow giant companies to cheat the system and skirt accountability,” Sen. Warren said.5 “The American people lost a true public servant with Tara Twomey’s firing, one who cared deeply about safeguarding families and served with great integrity.”

The removals, like many across the executive branch, could be challenged in court. At press time, a successor to Twomey at the EOUST had not been appointed.

Judiciary Seeks 71 Judgeships to Handle Growing Caseloads

The Judicial Conference of the United States on March 116 agreed to recommend to Congress the creation of new district and court of appeals judgeships as the judiciary faces a worsening shortage of Article III judges and caseloads continue to mount. Approved by the federal judiciary’s national policy-making body at its biannual meeting in Washington, D.C., the judiciary asked Congress to create two judgeships in the courts of appeals and 69 judgeships in district courts, where the need is greatest. District court filings have grown by 30 percent since 1990, when the last comprehensive judgeship bill was enacted. Since 1991, the overall number of authorized district court judgeships has increased by only 4 percent.

In developing judgeship recommendations, the Conference and its Committee on Judicial Resources use a formal survey process to study and evaluate Article III judgeship needs. Before a judgeship recommendation is transmitted to Congress, it undergoes several levels of careful consideration and review. The surveys are conducted every two years, and the resulting recommendations are based on established criteria, including current workload factors and empirical standards.

Bipartisan Legislation Moves Forward to Clarify Regulatory Oversight of Stablecoins

Sen. Bill Hagerty (R-Tenn.) on Feb. 4 introduced S. 394, the “Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act of 2025,” which would establish a regime to regulate stablecoins. Currently, existing state and federal laws and regulations are applied to aspects of the stablecoin industry based on the nature of activities and individual stablecoin features.

According to Coinbase,7 stablecoins are a type of cryptocurrency whose value is pegged to another asset, such as a fiat currency or gold, to maintain a stable price. They aim to provide an alternative to the high volatility of popular cryptocurrencies, making them potentially more suitable for common transactions.

In addition to sponsorship by Sen. Haggerty, the GENIUS Act was also cosponsored by Senate Banking Chair Tim Scott (R-Fla.), Kirsten Gillibrand (D-N.Y.), Cynthia Lummis (R-Wyo.) and Angela Alsobrooks (D-Md.). S. 394 would define payment stablecoins as digital assets, issued for payment or settlement and redeemable at a predetermined fixed amount (e.g., $1), that hold assets in reserve and that can be liquidated only to redeem the stablecoins. Issuers would be required to hold at least $1 of permitted reserves for every $1 of stablecoins. Additional provisions of the GENIUS Act8 include:

• Implementing reserve requirements and tailored regulatory standards for stablecoin issuers;
• For issuers of more than $10 billion of stablecoins, applying the Federal Reserve’s regulatory framework to depository institutions and the Office of the Comptroller of the currency’s framework for nonbank issuers;
• Allowing for state regulation of issuers under $10 billion in market capitalization, and providing a waiver process for issuers exceeding the threshold to remain state-regulated;
• Establishing supervisory, examination and enforcement regimes with clear limitations; and
• Granting stablecoin-holders priority over all other claims against the issuer in bankruptcy.

“Stablecoins enable faster, cheaper, and competitive transactions and facilitate seamless cross-border payments,” Scott said. “This legislation will ensure the industry can innovate and grow here in the United States while promoting the U.S. dollar’s global position.”

At press time, the GENIUS ACT was slated for a mark-up hearing on March 13 to be considered by the Senate Banking Committee.