Government and Policy Sector

Senate Majority Leader John Thune delayed a vote on the Digital Asset Market Clarity (CLARITY) Act until mid-September 2026, defeating efforts led by Senator Cynthia Lummis to force a vote before the August recess. The legislation requires 60 votes to clear a Senate filibuster, but leadership failed to assemble a majority following opposition from both parties. Democrats refused to advance the bill without tighter ethics restrictions targeting public officials, citing President Donald Trump's disclosure of earning more than $1 billion from digital asset ventures in 2025. Concurrently, banking lobbyists pushed back against stablecoin provisions, arguing that unconstrained stablecoin rewards would drain core bank deposits. That banking opposition split the Republican conference, with Senators Josh Hawley and Jerry Moran publicly withholding support. The bill lacks the votes to proceed. The postponement leaves digital asset firms without a federal market structure framework and forces lawmakers to revisit the bill during a narrow three-week session starting September 14, 2026, just weeks before the midterm elections.

The White House sent Federal Reserve Governor Lisa Cook a letter giving her until August 26 to respond to mortgage fraud allegations, restarting President Donald Trump's effort to remove her from the central bank's governing board. The move follows a 5-4 Supreme Court ruling in June that blocked an initial attempt to fire Cook, with the justices establishing that Fed governors enjoy "for-cause" removal protections and procedural due process. Chief Justice John Roberts noted in a footnote that the ruling did not prevent the administration from trying again if it provided formal notice. Signed by White House personnel chief Dan Scavino, the letter accuses Cook of "gross negligence" over 2021 mortgage filings in which she allegedly designated properties in both Michigan and Georgia as primary residences. Cook denies all wrongdoing. Her term on the Board of Governors runs through 2038, and her defense team has pledged to contest the removal effort in court. A successful dismissal would allow the White House to fill the vacancy with an ally more responsive to presidential demands for lower interest rates. That leaves lower federal courts to determine whether personal mortgage disclosures meet the legal threshold of cause required to unseat a sitting central banker.

A New Mexico judge ordered Meta to pay $567 million into a state child safety abatement fund, bringing the company's total penalties in the landmark lawsuit to $942 million. The decision follows a March ruling where a jury assessed $375 million in civil penalties after finding Meta liable for endangering young users and concealing risks of sexual exploitation. Judge Bryan Biedscheid ruled that Meta created a public nuisance akin to industrial pollution, establishing that its platforms substantially contributed to New Mexico's youth mental health crisis. Under the abatement mandate, Meta must deliver $420 million for behavioral treatment services over five years, $90 million for health screening, $33 million for awareness programs, and $24 million for administrative expenses. The court also mandated product revisions within the state, ordering Meta to pause push notifications for minors between 10 p.m. and 7 a.m., cap underage platform usage at 90 hours per month, and conceal 'Like' counts for users under 18 unless approved by a parent. Meta must also deploy artificial intelligence tools to detect underage accounts and build dedicated reporting channels for local school administrators. Meta announced it will appeal the judgment. The penalty falls well below the amount in total state damages sought by Attorney General Raul Torrez.