DROPLETS
U.S. bank compliance teams and in-house counsel must revise underwriting protocols to align with new Trump administration guidance for lending to immigrants without work authorization, as noncompliance may trigger regulatory enforcement.
The Trump administration has released non-binding guidance directing U.S. banks to apply enhanced scrutiny to loan applications from immigrants who do not hold valid work authorization, framing the policy as a measure to reduce fraud and address national security concerns. The guidance marks a shift in federal regulatory expectations for financial institutions’ know-your-customer and underwriting controls, with officials signaling that failure to adhere to the recommended practices may be factored into future supervisory and enforcement actions. In-house counsel for banks, credit unions, and consumer lenders should audit existing lending eligibility criteria, update compliance training for underwriting teams, and maintain documented risk assessments for this borrower segment to mitigate regulatory risk.
Technology and travel sector sanctions compliance teams must act because OFSI’s first ruling under its new settlement framework explicitly classifies software, data and digital services as prohibited economic resources for sanctioned parties, with penalties on an upward trajectory.
On 26 May 2026, the UK Office of Financial Sanctions Implementation (OFSI) imposed a £1,000,920.59 civil monetary penalty on Sabre Global Technologies Limited for three breaches of UK Russia sanctions rules, tied to its continued provision of global distribution system services to designated Ural Airlines after the carrier was sanctioned in May 2022. The penalty, the largest UK sanctions fine since 2020 and first issued under OFSI’s new settlement framework, confirms software, data and digital tools count as “economic resources” barred from designated parties. The ruling also sets explicit expectations for sanctions screening, red flag response, self-reporting and senior accountability for affected firms.
Defense contractors and their subcontractors must monitor this suspension to align compliance plans with the DoD’s revised CMMC implementation timeline, which impacts contract eligibility.
The U.S. Department of Defense has paused the rollout of CMMC Phase II, the second tier of its Cybersecurity Maturity Model Certification program that would have required mandatory third-party cybersecurity validation for most defense contractors. The suspension delays previously scheduled implementation deadlines, and the DoD has stated it will revise the program’s requirements, scope, and enforcement timeline in the coming months. Contractors should pause planned Phase II compliance spending, monitor official DoD guidance for updates, and review existing contract clauses for temporary relief provisions tied to CMMC requirements.
In-house counsel for energy, retail, and consumer-facing gasoline sector businesses must prioritize compliance reviews because the coordinated federal-state antitrust investigation push elevates enforcement risk for existing pricing practices.
DOJ and FTC leadership sent a formal letter to all state attorneys general urging them to launch state-level antitrust investigations into rising retail gasoline prices, aligning with broader federal focus on energy sector pricing and consumer cost shifts. The move formalizes a push to align federal and state antitrust enforcement priorities in the heavily scrutinized energy sector. In-house counsel for businesses involved in gasoline production, distribution, or retail should review existing pricing, supply chain, and competitor communications practices for antitrust compliance, and prepare for potential parallel federal and state information requests or inquiries.
In-house counsel overseeing federal regulatory compliance must act because the ruling expands presidential removal power over independent agency heads, disrupting longstanding regulatory enforcement and rulemaking stability.
On June 29, 2026, the U.S. Supreme Court issued two rulings invalidating longstanding for-cause removal protections for leaders of most federal independent agencies, holding the restrictions unconstitutionally infringe on the president’s executive authority. The decision eliminates barriers to the president firing agency heads without stated cause, centralizing control over agencies including the FTC, CFPB, and SEC that oversee vast swaths of U.S. business activity. Regulated entities should review pending agency enforcement actions and rulemakings, anticipate potential shifts in regulatory priorities under new leadership, and adjust compliance strategies as needed.
U.S. defense contractors and their in-house counsel must monitor pending DOD reforms, as all existing mandatory cybersecurity and reporting obligations under DFARS and NIST remain fully enforceable.
The U.S. Department of Defense has paused CMMC Phase II implementation for a 60-day review, citing excessive compliance costs, insufficient third-party assessor capacity, and disproportionate harm to small and mid-sized defense industrial base firms. The suspension halts upcoming third-party certification requirements for CMMC Level 2 and higher tiers, but does not eliminate any existing mandatory compliance duties. Defense contractors must continue adhering to current DFARS safeguarding and incident reporting rules, NIST SP 800-171 security requirements, and CMMC Level 1 self-assessment mandates, while tracking forthcoming DOD guidance to adjust long-term compliance roadmaps.
Defense contractors and primes must maintain NIST SP 800-171 self-assessments and DFARS 252.204-7012 safeguards while the Pentagon reconsiders third-party certification requirements.
On July 13, 2026, the Department of War suspended CMMC Phase II, halting the November 10, 2026 rollout that would have required C3PAO third-party assessments for many contract awards. All pending and future CMMC milestones are held in abeyance; acquisition officials may now include only Level 1 or Level 2 self-assessment requirements in solicitations. A new CMMC Reform Task Force will conduct a 60-day review focused on reducing compliance costs, addressing C3PAO capacity shortages, and lowering barriers for small and nontraditional suppliers, with an RFI open to industry input. Phase I self-assessments and DFARS 252.204-7012 obligations remain fully enforceable, and DOJ's Civil Cyber-Fraud Initiative continues. Primes lose independent validation of subcontractor cybersecurity posture and must strengthen internal supplier risk programs. Contractors should document current NIST SP 800-171 controls, monitor the RFI, and prepare for a potentially restructured CMMC 3.0 framework.
Pharmaceutical brand and generic company counsel must revise patent litigation risk assessments after the Supreme Court imposed a higher bar for proving skinny label inducement of patented drug uses.
The U.S. Supreme Court issued a ruling tightening the standard for proving patent inducement claims tied to generic drug skinny labels, which only include FDA-approved indications that do not infringe a brand’s listed patents. The Court held that patentees must demonstrate a generic label would actively encourage infringement of the specific patented indication, rather than merely showing the generic product could be used for that purpose. Brand pharmaceutical companies face higher hurdles to block generic entry via inducement claims, while generic manufacturers gain additional protection against post-approval patent suits. In-house counsel should review pending and future patent litigation strategies, update risk models for drug lifecycle management, and assess existing skinny label approval applications for compliance with the new standard.
In-house counsel for high-net-worth individuals and entities holding high-value real estate across multiple U.S. jurisdictions must track these developments to avoid noncompliance with new and proposed wealth tax rules carrying steep penalties.
As of mid-2026, New York City’s pied-à-terre tax on non-primary high-value residences is effective, with proposed rules establishing primary residency presumptions, audit authority, and penalties up to 300% of underpaid tax. Rhode Island has enacted a phased 3% millionaire income surtax and a statewide tax on non-owner-occupied residential property assessed at $1 million or more, both taking effect in 2026. California voters will decide in November 2026 on a one-time 5% billionaire wealth tax, while Connecticut is considering a tiered statewide mansion tax on residential property assessed above $3 million. In-house counsel should review client real estate ownership structures, confirm primary residency documentation, and assess state tax exposure for high-value assets to mitigate compliance risk.
New Jersey employers face heightened representative wage-and-hour litigation risk after a state appellate ruling removed class certification prerequisites for claims under the state Wage and Hour Law and Prevailing Wage Act.
On June 29, the New Jersey Appellate Division issued its ruling in Martinez v. T. Slack Environmental Services, holding that employees may pursue representative claims under the New Jersey Wage and Hour Law (NJ WHL) and Prevailing Wage Act (NJ PWA) without satisfying New Jersey’s traditional class certification requirements under Court Rule 4:32-1, extending prior precedent applicable to the state Earned Sick Leave Law. The court also clarified applicable limitations periods: NJ WHL and related sick leave claims for conduct predating the August 6, 2019 statutory amendments are subject to a two-year look-back period, while NJ PWA claims carry a six-year limitations period. In-house counsel for New Jersey employers should review pending and potential wage-and-hour litigation to identify valid timing-based defenses, and update organizational risk assessments for representative wage claim exposure.
Mortgage lenders and home loan originators must update underwriting processes to meet new federal regulatory expectations for vetting undocumented borrowers, as noncompliance carries material enforcement risk.
Recent guidance from federal financial regulators, including the CFPB and FDIC, directs mortgage lenders to implement enhanced due diligence and vetting procedures for loan applications from undocumented borrowers, to mitigate fraud risk and ensure fair lending compliance. The guidance notes that standard underwriting protocols may not adequately account for the unique documentation and risk profiles of this borrower pool. In-house counsel for mortgage lending institutions should review current underwriting policies, update staff training to align with the new expectations, and conduct a gap analysis to identify process shortfalls relative to the regulatory standard, to reduce exposure to enforcement actions and fair lending complaints.
In-house counsel for educational institutions, sports governing bodies, and state education agencies must act because the ruling confirms state authority to enact restrictions on transgender athletes’ participation in women’s sports while leaving the legality of inclusive policies unresolved for future litigation.
The U.S. Supreme Court issued a divided ruling upholding state laws that restrict participation in girls’ and women’s sports to biological females, rejecting equal protection and Title IX challenges filed by two transgender athletes. The 6-3 majority held that Idaho and West Virginia’s restrictions do not violate the 14th Amendment’s Equal Protection Clause, while all nine justices agreed the Title IX challenge to West Virginia’s law failed. The holding is permissive, not mandatory: it does not require schools or sports organizations to adopt such restrictions, nor does it resolve whether inclusive policies allowing transgender athletes to compete on women’s teams are legal. In-house counsel for educational institutions, sports leagues, and state agencies should review existing participation policies, align them with applicable state law, and monitor ongoing lower court litigation addressing the unresolved inclusive policy question.
Multinational corporations face reduced exposure to U.S. human-rights suits after the Court closes the door on judicially created ATS claims.
In Cisco Systems, Inc. v. Doe, the Supreme Court held that federal courts lack authority to recognize new causes of action under the Alien Tort Statute. The ruling narrows a doctrine that for decades allowed foreign nationals to pursue U.S. defendants in American courts for alleged international-law violations, including aiding-and-abetting claims common against multinationals. While the decision curtails future ATS litigation, it leaves open questions about the scope of conduct still actionable and the viability of related state-law theories. Companies with overseas operations or supply chains should reassess pending and potential exposure, coordinate with counsel on remaining claims, and monitor lower-court applications that will shape the decision's practical reach.
In-house counsel for entities with UK Russia and Belarus sanctions exposure must act because the extended general licence updates permissible activities with designated brokerage firms, and new individual designations require immediate updates to restricted party screening protocols.
On 13 July 2026, the UK Office of Financial Sanctions Implementation (OFSI) extended General Licence INT/2025/6641960, which authorizes specific activities related to non-designated third-party brokerage accounts held with designated brokerage firms under UK Russia and Belarus sanctions regulations. That same day, the UK Foreign, Commonwealth and Development Office designated 10 new individuals under the Russia (Sanctions) (EU Exit) Regulations 2019. In-house counsel should review the extended licence terms to confirm whether their organization’s brokerage-related activities fall under the authorized scope, and immediately add the 10 newly designated individuals to internal restricted party screening lists to mitigate compliance risk.
In-house counsel for high-net-worth individuals and entities holding high-value real estate across multiple U.S. jurisdictions must track these developments to avoid noncompliance with new and proposed wealth tax rules carrying steep penalties.
As of mid-2026, New York City’s pied-à-terre tax on non-primary high-value residences is effective, with proposed rules establishing primary residency presumptions, audit authority, and penalties up to 300% of underpaid tax. Rhode Island has enacted a phased 3% millionaire income surtax and a statewide tax on non-owner-occupied residential property assessed at $1 million or more, both taking effect in 2026. California voters will decide in November 2026 on a one-time 5% billionaire wealth tax, while Connecticut is considering a tiered statewide mansion tax on residential property assessed above $3 million. In-house counsel should review client real estate ownership structures, confirm primary residency documentation, and assess state tax exposure for high-value assets to mitigate compliance risk.
In-house counsel for energy, retail, and consumer-facing gasoline sector businesses must prioritize compliance reviews because the coordinated federal-state antitrust investigation push elevates enforcement risk for existing pricing practices.
DOJ and FTC leadership sent a formal letter to all state attorneys general urging them to launch state-level antitrust investigations into rising retail gasoline prices, aligning with broader federal focus on energy sector pricing and consumer cost shifts. The move formalizes a push to align federal and state antitrust enforcement priorities in the heavily scrutinized energy sector. In-house counsel for businesses involved in gasoline production, distribution, or retail should review existing pricing, supply chain, and competitor communications practices for antitrust compliance, and prepare for potential parallel federal and state information requests or inquiries.
U.S. bank compliance teams and in-house counsel must revise underwriting protocols to align with new Trump administration guidance for lending to immigrants without work authorization, as noncompliance may trigger regulatory enforcement.
The Trump administration has released non-binding guidance directing U.S. banks to apply enhanced scrutiny to loan applications from immigrants who do not hold valid work authorization, framing the policy as a measure to reduce fraud and address national security concerns. The guidance marks a shift in federal regulatory expectations for financial institutions’ know-your-customer and underwriting controls, with officials signaling that failure to adhere to the recommended practices may be factored into future supervisory and enforcement actions. In-house counsel for banks, credit unions, and consumer lenders should audit existing lending eligibility criteria, update compliance training for underwriting teams, and maintain documented risk assessments for this borrower segment to mitigate regulatory risk.
Defense contractors and primes must maintain NIST SP 800-171 self-assessments and DFARS 252.204-7012 safeguards while the Pentagon reconsiders third-party certification requirements.
On July 13, 2026, the Department of War suspended CMMC Phase II, halting the November 10, 2026 rollout that would have required C3PAO third-party assessments for many contract awards. All pending and future CMMC milestones are held in abeyance; acquisition officials may now include only Level 1 or Level 2 self-assessment requirements in solicitations. A new CMMC Reform Task Force will conduct a 60-day review focused on reducing compliance costs, addressing C3PAO capacity shortages, and lowering barriers for small and nontraditional suppliers, with an RFI open to industry input. Phase I self-assessments and DFARS 252.204-7012 obligations remain fully enforceable, and DOJ's Civil Cyber-Fraud Initiative continues. Primes lose independent validation of subcontractor cybersecurity posture and must strengthen internal supplier risk programs. Contractors should document current NIST SP 800-171 controls, monitor the RFI, and prepare for a potentially restructured CMMC 3.0 framework.
New Jersey employers face heightened representative wage-and-hour litigation risk after a state appellate ruling removed class certification prerequisites for claims under the state Wage and Hour Law and Prevailing Wage Act.
On June 29, the New Jersey Appellate Division issued its ruling in Martinez v. T. Slack Environmental Services, holding that employees may pursue representative claims under the New Jersey Wage and Hour Law (NJ WHL) and Prevailing Wage Act (NJ PWA) without satisfying New Jersey’s traditional class certification requirements under Court Rule 4:32-1, extending prior precedent applicable to the state Earned Sick Leave Law. The court also clarified applicable limitations periods: NJ WHL and related sick leave claims for conduct predating the August 6, 2019 statutory amendments are subject to a two-year look-back period, while NJ PWA claims carry a six-year limitations period. In-house counsel for New Jersey employers should review pending and potential wage-and-hour litigation to identify valid timing-based defenses, and update organizational risk assessments for representative wage claim exposure.
Mortgage lenders and home loan originators must update underwriting processes to meet new federal regulatory expectations for vetting undocumented borrowers, as noncompliance carries material enforcement risk.
Recent guidance from federal financial regulators, including the CFPB and FDIC, directs mortgage lenders to implement enhanced due diligence and vetting procedures for loan applications from undocumented borrowers, to mitigate fraud risk and ensure fair lending compliance. The guidance notes that standard underwriting protocols may not adequately account for the unique documentation and risk profiles of this borrower pool. In-house counsel for mortgage lending institutions should review current underwriting policies, update staff training to align with the new expectations, and conduct a gap analysis to identify process shortfalls relative to the regulatory standard, to reduce exposure to enforcement actions and fair lending complaints.
Defense contractors and their subcontractors must monitor this suspension to align compliance plans with the DoD’s revised CMMC implementation timeline, which impacts contract eligibility.
The U.S. Department of Defense has paused the rollout of CMMC Phase II, the second tier of its Cybersecurity Maturity Model Certification program that would have required mandatory third-party cybersecurity validation for most defense contractors. The suspension delays previously scheduled implementation deadlines, and the DoD has stated it will revise the program’s requirements, scope, and enforcement timeline in the coming months. Contractors should pause planned Phase II compliance spending, monitor official DoD guidance for updates, and review existing contract clauses for temporary relief provisions tied to CMMC requirements.
U.S. defense contractors and their in-house counsel must monitor pending DOD reforms, as all existing mandatory cybersecurity and reporting obligations under DFARS and NIST remain fully enforceable.
The U.S. Department of Defense has paused CMMC Phase II implementation for a 60-day review, citing excessive compliance costs, insufficient third-party assessor capacity, and disproportionate harm to small and mid-sized defense industrial base firms. The suspension halts upcoming third-party certification requirements for CMMC Level 2 and higher tiers, but does not eliminate any existing mandatory compliance duties. Defense contractors must continue adhering to current DFARS safeguarding and incident reporting rules, NIST SP 800-171 security requirements, and CMMC Level 1 self-assessment mandates, while tracking forthcoming DOD guidance to adjust long-term compliance roadmaps.
Pharmaceutical brand and generic company counsel must revise patent litigation risk assessments after the Supreme Court imposed a higher bar for proving skinny label inducement of patented drug uses.
The U.S. Supreme Court issued a ruling tightening the standard for proving patent inducement claims tied to generic drug skinny labels, which only include FDA-approved indications that do not infringe a brand’s listed patents. The Court held that patentees must demonstrate a generic label would actively encourage infringement of the specific patented indication, rather than merely showing the generic product could be used for that purpose. Brand pharmaceutical companies face higher hurdles to block generic entry via inducement claims, while generic manufacturers gain additional protection against post-approval patent suits. In-house counsel should review pending and future patent litigation strategies, update risk models for drug lifecycle management, and assess existing skinny label approval applications for compliance with the new standard.
Multinational corporations face reduced exposure to U.S. human-rights suits after the Court closes the door on judicially created ATS claims.
In Cisco Systems, Inc. v. Doe, the Supreme Court held that federal courts lack authority to recognize new causes of action under the Alien Tort Statute. The ruling narrows a doctrine that for decades allowed foreign nationals to pursue U.S. defendants in American courts for alleged international-law violations, including aiding-and-abetting claims common against multinationals. While the decision curtails future ATS litigation, it leaves open questions about the scope of conduct still actionable and the viability of related state-law theories. Companies with overseas operations or supply chains should reassess pending and potential exposure, coordinate with counsel on remaining claims, and monitor lower-court applications that will shape the decision's practical reach.
In-house counsel overseeing federal regulatory compliance must act because the ruling expands presidential removal power over independent agency heads, disrupting longstanding regulatory enforcement and rulemaking stability.
On June 29, 2026, the U.S. Supreme Court issued two rulings invalidating longstanding for-cause removal protections for leaders of most federal independent agencies, holding the restrictions unconstitutionally infringe on the president’s executive authority. The decision eliminates barriers to the president firing agency heads without stated cause, centralizing control over agencies including the FTC, CFPB, and SEC that oversee vast swaths of U.S. business activity. Regulated entities should review pending agency enforcement actions and rulemakings, anticipate potential shifts in regulatory priorities under new leadership, and adjust compliance strategies as needed.
In-house counsel for educational institutions, sports governing bodies, and state education agencies must act because the ruling confirms state authority to enact restrictions on transgender athletes’ participation in women’s sports while leaving the legality of inclusive policies unresolved for future litigation.
The U.S. Supreme Court issued a divided ruling upholding state laws that restrict participation in girls’ and women’s sports to biological females, rejecting equal protection and Title IX challenges filed by two transgender athletes. The 6-3 majority held that Idaho and West Virginia’s restrictions do not violate the 14th Amendment’s Equal Protection Clause, while all nine justices agreed the Title IX challenge to West Virginia’s law failed. The holding is permissive, not mandatory: it does not require schools or sports organizations to adopt such restrictions, nor does it resolve whether inclusive policies allowing transgender athletes to compete on women’s teams are legal. In-house counsel for educational institutions, sports leagues, and state agencies should review existing participation policies, align them with applicable state law, and monitor ongoing lower court litigation addressing the unresolved inclusive policy question.
Technology and travel sector sanctions compliance teams must act because OFSI’s first ruling under its new settlement framework explicitly classifies software, data and digital services as prohibited economic resources for sanctioned parties, with penalties on an upward trajectory.
On 26 May 2026, the UK Office of Financial Sanctions Implementation (OFSI) imposed a £1,000,920.59 civil monetary penalty on Sabre Global Technologies Limited for three breaches of UK Russia sanctions rules, tied to its continued provision of global distribution system services to designated Ural Airlines after the carrier was sanctioned in May 2022. The penalty, the largest UK sanctions fine since 2020 and first issued under OFSI’s new settlement framework, confirms software, data and digital tools count as “economic resources” barred from designated parties. The ruling also sets explicit expectations for sanctions screening, red flag response, self-reporting and senior accountability for affected firms.
In-house counsel for entities with UK Russia and Belarus sanctions exposure must act because the extended general licence updates permissible activities with designated brokerage firms, and new individual designations require immediate updates to restricted party screening protocols.
On 13 July 2026, the UK Office of Financial Sanctions Implementation (OFSI) extended General Licence INT/2025/6641960, which authorizes specific activities related to non-designated third-party brokerage accounts held with designated brokerage firms under UK Russia and Belarus sanctions regulations. That same day, the UK Foreign, Commonwealth and Development Office designated 10 new individuals under the Russia (Sanctions) (EU Exit) Regulations 2019. In-house counsel should review the extended licence terms to confirm whether their organization’s brokerage-related activities fall under the authorized scope, and immediately add the 10 newly designated individuals to internal restricted party screening lists to mitigate compliance risk.
In-house counsel for high-net-worth individuals and entities holding high-value real estate across multiple U.S. jurisdictions must track these developments to avoid noncompliance with new and proposed wealth tax rules carrying steep penalties.
As of mid-2026, New York City’s pied-à-terre tax on non-primary high-value residences is effective, with proposed rules establishing primary residency presumptions, audit authority, and penalties up to 300% of underpaid tax. Rhode Island has enacted a phased 3% millionaire income surtax and a statewide tax on non-owner-occupied residential property assessed at $1 million or more, both taking effect in 2026. California voters will decide in November 2026 on a one-time 5% billionaire wealth tax, while Connecticut is considering a tiered statewide mansion tax on residential property assessed above $3 million. In-house counsel should review client real estate ownership structures, confirm primary residency documentation, and assess state tax exposure for high-value assets to mitigate compliance risk.
Grade 3 — worth a glance, not the full analysis.
- California Court Rules on Cost Approach Valuation for Alta Wind Energy Facility
In-house counsel for renewable energy companies with wind energy asset portfolios must evaluate how this California court ruling on cost approach valuation impacts their property tax exposure and valuation dispute protocols.