1. Federal Court Grants Temporary Restraining Order Blocking Arizona Criminal Enforcement Against Prediction Markets
On April 10, at the request of the Commodity Futures Trading Commission (CFTC) and the Department of Justice, the U.S. District Court for the District of Arizona granted a temporary restraining order (TRO) through April 24 barring Arizona from enforcing its gambling laws through any criminal or civil enforcement actions related to event contracts listed on CFTC-regulated designated contract markets. S. District Judge Michael Liburdi found that the CFTC had sufficiently shown that “event contracts” fall within the Commodity Exchange Act’s definition of “swaps” and that it had demonstrated a reasonable chance of success in showing that the act preempts Arizona law. Liburdi grounded his finding in the event contract prong of the statutory swap definition, reasoning that “[e]vent contracts, which are based on the occurrence or nonoccurrence of a specified future event, are associated with financial, economic, or commercial consequences.” However, he also noted that his finding “is not boundless. It is constrained by a limiting principle that recognizes only those downstream financial consequences that are direct and proximate to the underlying event, as reflected by the examples provided by the CFTC on the record.” This appears to be the first judicial decision to both hold that event contracts qualify as swaps under the event contract prong and limit the scope of that holding by requiring a “direct and proximate” link between the underlying event and its financial consequences. The TRO effectively paused a criminal arraignment of Kalshi that had been scheduled for April 13. The CFTC’s press release is available here. The TRO is available here.
2. Minnesota Legislators Consider Bill To Ban Prediction Markets
On April 9, both chambers of the Minnesota State Legislature heard a proposal to ban prediction markets entirely in the state, making it a felony to use or operate one within Minnesota’s borders. The bill, authored by Democratic-Farmer-Labor Sen. John Marty with bipartisan co-sponsorship, advanced out of the Minnesota Senate State and Local Government Committee on a voice vote. The legislation would remove prediction markets’ ability to rely on federal commodity futures trading exemptions for contracts beyond their traditional scope, prohibit sports event contracts, and ban trading on political or military actions. The draft bill is available here.
3. FDIC Rescinds Supervisory Guidance on Multiple Re-Presentment NSF Fees
On April 10, the FDIC announced the immediate rescission of its June 2023 Financial Institution Letter titled “FDIC Clarifying Supervisory Approach Regarding Supervisory Guidance on Multiple Re-Presentment NSF Fees.” That guidance, originally issued in August 2022, had described the FDIC’s supervisory approach to institutions that assess multiple non-sufficient funds (NSF) fees arising from the re-presentment of the same unpaid transaction (i.e., when a merchant re-submits a previously declined check or ACH transaction and the institution charges an additional NSF fee for what is effectively the same item). The guidance flagged potential unfair or deceptive acts or practices risk under Section 5 of the Federal Trade Commission Act, warning that consumer disclosures may not be sufficient to address potential unfairness, particularly where “multiple NSF fees are assessed for the same transaction in a short period of time without sufficient notice or opportunity for customers to bring their account to a positive balance in order to avoid the assessment of additional NSF fees.” The guidance had also directed institutions to provide full restitution to harmed customers and to review and revise their disclosures and account agreements, and it highlighted the role of third-party core processors, which play significant roles in processing payments, tracking re-presented items, and determining when NSF fees are assessed, as a source of risk requiring adequate institutional oversight. After reviewing and reassessing the guidance, the FDIC concluded that 2023 Financial Institution Letter was “overly broad in scope” and had “raised uncertainty” regarding when disclosures about re-presentments may result in unfairness concerns. The FDIC noted that supervised institutions should continue to ensure their disclosures accurately reflect their practices and are provided in accordance with applicable laws, regulations, and other current legal requirements. The rescission is effective immediately and applies to all FDIC-supervised financial institutions. The FDIC’s recision notice is available here.
4. Treasury and IRS Issue Proposed Regulations on Remittance Transfer Excise Tax Under the One, Big, Beautiful Bill Act
On April 10, the Department of the Treasury and the Internal Revenue Service issued proposed regulations providing rules and definitions related to the 1 percent excise tax on certain outbound remittance transfers enacted under the One, Big, Beautiful Bill Act. The tax became effective January 1, 2026, and applies to remittance transfers from the United States to foreign recipients when the sender provides cash, a money order, a cashier’s check, or another similar physical instrument to the remittance transfer provider. Transfers funded through bank accounts at institutions subject to Bank Secrecy Act or anti-money laundering (BSA/AML) requirements or by U.S.-issued debit or credit cards are excluded. The sender is liable for the tax, and remittance transfer providers are required to collect the tax, make semimonthly deposits, and file quarterly returns. The proposed regulations clarify the taxable amount, define the scope of physical instruments that trigger the tax, and include anti-avoidance provisions permitting disregard or recharacterization of transactions undertaken with a principal purpose of circumventing the tax. Comments on the proposed regulations are due by June 12, 2026. The IRS press release is available here. The Federal Register document is available here.
5. Federal Reserve Board Terminates Enforcement Actions Against Credit Agricole, Mega International Commercial Bank, and Goldman Sachs
On April 9, the Federal Reserve Board announced the termination of long-standing cease-and-desist orders against three major financial institutions. The terminated actions include (i) an October 2015 order against Crédit Agricole S.A. and Crédit Agricole Corporate and Investment Bank, which had required enhanced global compliance with U.S. sanctions following a $90.3 million penalty for violations of sanctions administered by the Treasury Department’s Office of Foreign Assets Control; (ii) a January 2018 order against Mega International Commercial Bank Co. Ltd., which addressed failures to maintain an effective BSA/AML compliance program and carried a $29 million penalty; and (iii) a May 2018 order against The Goldman Sachs Group Inc., which concerned unsafe and unsound practices related to deficient policies, controls, and compliance risk management in the firm’s foreign exchange trading activities, accompanied by a $54.75 million civil money penalty. All three orders were terminated effective March 25, 2026. The Federal Reserve Board’s press release is available here.
