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The Trump administration continues to roll back policies on DEI and banking regulation while facing various lawsuits over its personnel, spending, and immigration actions.

This past week, the Trump administration continued to take action on DEI, barring certain DEI-related language from government contracts and closing an office within the EPA. It also rolled back Biden-era proposals to regulate banking and finance. Meanwhile, the administration continues to face litigation challenges in federal court, with judges blocking personnel actions, USAID spending freezes, and the executive order on birthright citizenship. Meanwhile, on Capitol Hill, the Senate appears likely to pass the Republican spending bill, averting a government shutdown.

Latham lawyers are carefully monitoring the rollout of President Trump’s policy priorities through executive orders, agency actions, and installment of new personnel. Below is a high-level overview of these actions, broken down by topic, along with updates on related court challenges, personnel changes, and other breaking developments in their implementation.

Diversity, Equity, and Inclusion (DEI)

The Trump administration continues to implement the DEI-related executive orders issued shortly after the inauguration.

  • Last Friday, the US Department of Health and Human Services Office for Civil Rights (HHS-OCR) announced investigations under Title VI and Section 1557 of the Affordable Care Act of four unnamed “medical schools and hospitals” pursuant to Executive Order 14173, titled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity.” The investigations respond to “allegations and information OCR received that certain medical schools and hospitals that receive HHS funding may operate medical education, training, or scholarship programs for current or prospective workforce members that discriminate on the basis of race, color, national origin, or sex.” These appear to be the first HHS investigations launched under Executive Order 14173, which requires federal agencies to identify up to “nine potential civil compliance investigations” involving institutions with significant endowments.

    In a related development, on Monday, a Maryland federal judge issued an opinion clarifying that the preliminary injunction against President Trump’s executive orders targeting DEI initiatives applies to all executive agencies. US District Judge Adam B. Abelson emphasized that the injunction, initially granted in February to the city of Baltimore and several associations (in a lawsuit referenced in our earlier blog post), extends beyond the agencies named in the lawsuit to encompass all federal executive branch entities, including their leadership and subdivisions. This clarification ensures that the injunction uniformly applies across the executive branch, enjoining agencies from terminating equity-related grants and contracts and the requirement for federal contractors to certify they do not operate programs promoting DEI. Judge Abelson rejected the Trump administration’s argument that the court lacked jurisdiction to clarify the order while it was under appeal, stating that the clarification did not substantively alter the injunction.
  • This week, the General Services Administration and Department of Defense directed government contractors and subcontractors to remove certain previously required clauses from all government contracts, with limited exceptions for contracts set to expire in the next six months without options to extend. The removed clauses include language prohibiting segregated facilities (based on race, religion, sexual orientation, etc.); establishing goals for minority and female hiring for construction contracts; and prohibiting pay disparity based on race, color, religion, sex, sexual orientation, gender identity, or national origin. These changes do not include banning clauses specifically related to ensuring equal employment opportunities for veterans or workers with disabilities. For more detailed information on the contract clauses affected, see this blog post.
  • Additionally, the Environmental Protection Agency (EPA) closed its Office of Environmental Justice and External Civil Rights division this week, with the EPA administrator publicly describing the closure as part of “the elimination of forced discrimination programs.” Part of this office’s mission was enforcing civil rights laws prohibiting discrimination in the allotment and receipt of federal funds from the EPA. The office also provided alternative dispute resolution channels for environmental conflicts between EPA and its stakeholders.

Banking and Finance

Trump administration actions this week continue to indicate it will take a lighter approach to banking regulation, starting by reversing Biden-era oversight policies.

  • On March 10, the Securities and Exchange Commission announced that it is eliminating its delegation of authority to its enforcement director to formally begin new investigations and approve of subpoenas for witnesses. Now, the Commission must hold a vote to take such actions. For more details, see this blog post.
  • A flurry of activity at the Federal Deposit Insurance Corporation (FDIC) this week includes continuing rollbacks of Biden-era policies and proposed changes to agency guidelines. (For more details on these developments, see this blog post.)
    • The FDIC continues to reverse course on Biden-era guidelines that increased scrutiny for bank mergers. As it stands, the FDIC’s merger policy that existed before the more stringent Biden-era revisions is reinstated. The FDIC has also withdrawn its Biden-era proposal to amend the agency’s brokered deposit regulations. That proposal would have increased regulations on less-than-well-capitalized insured depository institutions accepting funds from deposit brokers. Another withdrawn proposal prescribed requirements for corporate governance, including supervision of senior management and development of a strategic plan and risk management policies and procedures. Further, the FDIC withdrew a proposal that would have increased the circumstances under which an individual is required to notify the FDIC upon acquiring voting securities of a bank.
    • Finally, the FDIC withdrew a proposal which sought to curb risk-taking by executives at financial institutions with at least $1 billion in assets by prohibiting certain incentive-based compensation.

Federal Workforce

The Trump administration continues to dramatically reshape the federal workforce with layoffs and buyouts. As we have previously noted, many of these actions are being challenged in federal court.

  • On March 13, 2025, attorneys general from 20 states and the District of Columbia sued the administration for its firing of over 1,300 employees of the Department of Education. The lawsuit, currently pending in Massachusetts federal court, alleges that the firings are an “effective dismantling” of the department and that such action eliminating a federal agency requires approval by Congress.
  • A federal court in California ordered various federal agencies to offer employment to the tens of thousands of probationary employees recently fired. These probationary employees had been told they were fired due to performance issues, but the judge ruled that this reasoning was “a gimmick,” and that proper procedures for a Reduction in Force (procedures dictated by the Office of Personnel Management) were not followed.
  • A district judge in the District of Columbia this week issued a permanent injunction ordering that Susan Grundmann, a member of the Federal Labor Relations Authority, be reinstated to her board position. This body handles disputes about unfair labor practices between the federal government and federal employees.

Federal Funding

The Senate appears poised to approve the Republican spending bill to avoid an imminent government shutdown, while litigation over federal spending continues.

  • Senator Chuck Schumer announced on March 13, 2025, that he would vote for the Republican-proposed spending bill to avoid a government shutdown. The bill will provide funding for seven months. If the bill does not pass, the shutdown will begin at midnight on March 14, 2025. 
  • Earlier this month, a district court judge in the District of Columbia issued an order temporarily blocking the Trump administration’s freeze of tens of billions of dollars in funding already allocated by Congress to the Agency for International Development (USAID). The administration asked the Supreme Court to intervene to remove the block and allow the funding freeze, but the Supreme Court declined to interfere and sent the case back to the district court. This week, the district court judge ruled that the freeze was unconstitutional given Congress’s authority to dictate spending on foreign aid. The judge did not require that all prior contracts be reinstated, instead leaving the choice of how to spend the allocated money to the administration. However, the judge did order backpay of some money owed to aid organizations for already-completed work.

Immigration

President Trump’s birthright citizenship executive order continues to face legal challenges.

  • On March 11, 2025, the US Court of Appeals for the First Circuit rejected the government’s argument that the executive order ending birthright citizenship should go into effect while appeals are pending. This decision aligns with prior decisions by the Fourth and Ninth circuits preventing the executive order from operating while it is challenged in court. On March 13, 2025, the Trump administration filed an emergency application asking the Supreme Court to allow the executive order to operate while the lawsuits are pending.
  • A new lawsuit filed in the US District Court for the District of Columbia seeks a declaratory judgment preventing the Internal Revenue Service (IRS) from disclosing information to the Department of Homeland Security to assist in enforcing immigration laws. The IRS-held information at issue includes names and addresses of noncitizens with taxpayer identification numbers.

Federal Court

An executive order issued on March 11, 2025, states that whenever a lawsuit is filed seeking an injunction to block a federal action, the agency defending the action must utilize Federal Rule of Civil Procedure 65(c) to request that the party seeking the injunction be required to post security that would cover potential costs and damages of the federal government if it prevails.

Commodity Futures Trading Commission (CFTC)

Acting CFTC Chairman Caroline D. Pham announced in a speech at the International Futures Industry Conference that the CFTC is planning an “enforcement sprint” to review and resolve open investigations and enforcement matters that do not relate to consumer harm or market abuse in order to refocus resources on fraud investigations.

Tax

Join us on March 20, 2025, for our We’ve Got Washington Covered webcast series to hear about the latest developments in the tax landscape, including enforcement trends and effects of the 2025 budget reconciliation process on tax reform. Register now.

Personnel Changes

On March 13, 2025, the nomination of David Weldon to lead the Centers for Disease Control and Prevention was withdrawn shortly before the planned Senate confirmation hearing. The administration also made the following personnel moves:

Nominations:

  • John Squires (Director, US Patent and Trademark Office)
  • Timothy John Walsh (Assistant Secretary, Department of Energy)

Committee Approvals:

  • Mark Meador (Commissioner, Federal Trade Commission)
  • Jayanta Bhattacharya (Director, National Institutes of Health)
  • Martin Makary (Commissioner, Food and Drug Administration)

Senate Confirmations:

  • Lori Chavez-DeRemer (Secretary, Department of Labor)
  • Steven Bradbury (Deputy Secretary, Department of Transportation)
  • Abigail Slater (Assistant Attorney General, Antitrust Division, US Department of Justice)