Current Month (August 2025)
Consumer Finance Law
N.D. of Illinois Denies CFPB’s Latest Attempt to Abandon Enforcement Action
By Olivia (Liv) Lawless, Pilgrim Christakis LLP
On June 12, 2025, the Northern District of Illinois issued an Order denying the joint motion of the Consumer Financial Protection Bureau (“CFPB”) to vacate a stipulated final order enjoining a nonbank mortgage broker from acting in violation of the Equal Credit Opportunity Act (“ECOA”) and requiring the broker to pay a $105,000 civil penalty. The motion was brought under the CFPB’s new goal to “correct past misconduct by the Federal Government related to censorship of [constitutionally] protected speech” (Exec. Order No. 14149 § 2(d)) and sought to unwind the results of a 2020 lawsuit alleging the broker violated the ECOA by making statements on its radio show discouraging prospective African American applicants from applying for credit.
In denying the CFPB’s motion to vacate, the Court refused to relax the Seventh Circuit’s precedent that to obtain relief under Rule 60(b)(6), the movant “must show extraordinary circumstance justifying the reopening of a final judgment,” and it remained unpersuaded that the standard had been met. In a seething opinion authored by the Hon. Franklin U. Valderrama, the Court found that the voluntary resolution could not be nullified simply because a new administration found the prior administration’s litigation “unwise,” and the CFPB’s attempt to argue that the suit was brought “without a substantial predicate of actionable facts” was nothing more than “an act of legal hara-kiri that would make a samurai blush.”
Cannabis Law
Trump Looks Into Cannabis Rescheduling
By Daniel Shortt, Salzhauer & Shortt, P.C.
The Wall Street Journal reports that at a fundraiser dinner in August, Donald Trump stated that he was “looking at” whether to move forward with rescheduling marijuana from Schedule I to Schedule III. As the head of the Executive Branch, his directive will certainly be impactful.
Trump signaled support for rescheduling and banking reform on the campaign trail but has mostly been silent on the issue since taking office. Trump supporters are divided on the issue of rescheduling. The Daily Beast reports that commentators Matt Walsh and Jack Posobiec vocally oppose rescheduling. Matt Gaetz, a high-profile supporter of Trump and his initial pick for the attorney general, has long supported cannabis reform.
Rescheduling has been on the minds of cannabis industry participants for years. This process began in October 2022, when President Joe Biden asked the Department of Health and Human Services (“HHS”) and the Department of Justice (“DOJ”) to review marijuana’s status under the Controlled Substances Act (“CSA”). In August 2022, HHS recommended that marijuana move from Schedule I, the most restrictive classification, to Schedule III. In May 2024, the DOJ issued a proposed rule to make that move, and in August 2024, the Drug Enforcement Administration (“DEA”) announced it would hold a hearing in January 2025. That hearing was postponed due to an appeal. In July 2025, the administrative judge overseeing the hearing retired.
While Trump’s views on rescheduling are relevant here, the rescheduling process is still incomplete and has been significantly delayed. If Trump does come out in favor of rescheduling, it will likely light a fire to move the bureaucratic wheels of the DEA.
If marijuana does move from Schedule I to Schedule III, it would not legalize state-legal marijuana programs but would significantly reduce the tax burden of cannabis businesses caused by IRC 280E, which prohibits deductions related to the trafficking of a Schedule I or II controlled substance. The CSA tightly regulates controlled substances, including drugs like ketamine, which is listed in Schedule III. Rescheduling would allow for research and the development of marijuana-based drugs, which healthcare professionals could prescribe and patients could receive via pharmacies.
Rescheduling could also have positive impacts indirectly for the cannabis industry. For example, even though marijuana operators would still be violating the CSA, more traditional institutions like banks and insurance carriers might be willing to work with the industry. There could also be more interest from traditional food and beverage companies. Put simply, much of the marijuana industry has developed based on the perception of risk rather than actual risk, and rescheduling signals a positive move by the federal government.
As we enter the last quarter of 2025 and look ahead to 2026, we could see massive changes in federal cannabis policy across the board. This will create legal and business issues in the cannabis space. As of right now, so much is in flux that perhaps the only thing to do is sit back and watch to ensure that you advise clients to get the full picture.
Gaming Law
Big Beautiful Bill Reduces Tax Breaks for Gambling Losses
By Megan Carrasco, Snell & Wilmer LLP, and Ashley Fortner, South Texas College of Law Houston
Section 70114 of H.R. 1, the “One Big Beautiful Bill Act,” amended Section 165(d) of the Internal Revenue Code of 1968 to only allow 90 percent of wagering losses to be deducted during a taxable year and only to the extent the gambler had gains from wagers in the same year. This means that a gambling loss of $10,000 and a gambling gain of $10,000 in the same year will result in a tax deduction of $9,000. Professional poker players and the wider gambling community were surprised by the potential of paying income tax on money they lost. This change takes effect after December 31, 2025.
The American Gaming Association (“AGA”) celebrated the Bill but later expressed support for potential revisions. AGA President Bill Miller has supported the second Trump Administration because he believes the industry will face fewer federal regulations under Trump.
Professional gamblers and other gaming associations quickly released critical comments on the Bill and distanced themselves from the AGA.
Since the tax consequences have come to light, Congress has moved to undo the changes. Representatives Dina Titus and Ro Khanna introduced the Fair Accounting for Income Realized from Betting Earnings Taxation Act, the “FAIR BET Act,” to the House Ways and Means Committee just three days after the Bill passed. This Act would restore the full deduction for gambling losses by striking “90 percent” and replacing it with “100 percent” from the revised Section 165(d).
Senator Catherine Cortez Masto of Nevada also introduced S.2230—the FULL HOUSE Act to the Senate Finance Committee. The FULL HOUSE Act seeks to amend Section 165(d) of the Internal Revenue Code by reinstating the deduction provision after December 31, 2025. The result of both proposed acts would eliminate the 90 percent deduction for losses.
Section 70114 was widely unknown when H.R 1 was passed. Senator Cortez Masto told the Associated Press that individuals in both parties were unaware that the gambling provision was in the final bill. Senator Ron Wyden, a top-ranking Democrat on the Senate Finance Committee, also commented to the Associated Press that the lack of knowledge was a detriment to their constituents.
This highlights a problem with passing massive bills through Congress. H.R.1 changed the tax consequences across the gambling industry with one small, relatively unknown provision with limited support from major gambling associations. This has caused Congress to quickly try to reverse course since the provision did not have congressional support in the first place. However, the effort to revert back to one hundred percent deductions for gambling losses is reportedly being held hostage to force other H.R.1 provisions to also be undone.
