💥 Congress Said “No” to AI Regulations & $5 Caps, Pepsi & Coke Get Called Out for Greenwashing | Marketing’s Most Wanted

Hi Marketing Wranglers,

Buckle up — this week’s news is packed with policy shake-ups, brand risks, and regulatory curveballs that could hit your messaging, partnerships, and long-term strategy hard. From Congress ditching the CFPB’s overdraft rule, to major lawsuits with ESG implications, to a quiet rollback of a trusted consumer label, there’s a lot to dig into — and even more to prep for.

New Slack Community:
Marketing, Compliance, and Legal are all feeling the heat—so we’re launching a community space on Slack to swap updates, share insights, and stay ahead together. Join the community here.

🚨 In This Week’s Issue

💼 Will There Be AI Regulation? Congress Quietly Slips in a Ban: Congress just slipped a ban on AI regulation groups into a spending bill—because apparently, even talking about guardrails is too controversial for Big Tech.

💸 No Cap, Literally: Trump & Congress strike down the CFPB’s $5 overdraft rule. Why fintechs and banks are celebrating — and what this signals for consumer trust.

🌴 Paradise vs Plastics: The Virgin Islands is suing Coca-Cola & PepsiCo for plastic pollution. What this means for ESG marketing and sustainability claims.

✉️ You’re Invited – Connect with others who care about marketing compliance as much as you do.

Let’s be honest— an email newsletter isn’t cutting it. With regulations changing by the minute, we built the Warrant Slack community so marketing, legal, and compliance experts can stay sharp together. (It’s free!)

Bonus: As a member, you’ll get priority invites to community events—including our upcoming New York Tech Week programming—and access to exclusive webinar and training recordings.

→ Join the community here.

💼 Will There Be AI Regulation? Congress Quietly Slips in a Ban on Advocacy Groups

In a late-night plot twist that would make even the best screenwriters jealous, House Republicans tucked a sneaky little provision into the latest federal spending bill: a ban on funding any organization that supports government regulation of AI.

Yes, you read that right.

Section 736 of the bill prohibits federal money from going to any group that “engages in activities that promote the regulation of AI.”

Translation? If you’re a nonprofit, research lab, or university even thinking about guardrails for AI... you might be out of luck.

Wait, What?

AI watchdogs, consumer advocacy groups, and tech policy orgs are sounding the alarm. Their argument: this isn’t just anti-regulation—it’s anti-democracy.

The bill’s vague language could chill academic research, public-interest lobbying, and even basic AI safety conversations. One policy expert called it “a gag order on common sense.”

Big Tech’s influence in Washington is no secret, and the AI hype train isn’t slowing down. This move comes on the heels of Trump revoking Biden’s sweeping AI executive order, which had aimed to introduce guardrails on high-risk AI systems (think employment, finance, and healthcare). He also announced plans to scrap export controls on critical U.S. AI chips, part of his push to “beat China” in the AI arms race.

“We believe that excessive regulation of the AI sector could kill a transformative industry just as it’s taking off,” Vice President JD Vance declared at February’s Artificial Intelligence Action Summit.

But banning discussion of regulation? That’s a new level of “move fast and break things.”

States Strike Back

With Washington backing away, states are stepping in hard:

• Colorado passed a law requiring AI systems to prevent discrimination in employment, lending, and housing (we see you mortgage lenders!)—and to notify users when they’re interacting with a bot.

• New Jersey created penalties for distributing AI-generated deepfakes.

• Ohio is considering mandatory watermarks on AI content and bans on deepfake identity fraud.

• At least 16 states are considering laws governing AI-generated political content and election interference, according to the Center for American Progress.

Meanwhile, the House is inching closer to passing a federal moratorium on state AI regulations, which would block these kinds of consumer protections at the local level. Because apparently the goal is less oversight, not more.

Yet, in a rare moment of bipartisanship, Trump is expected to sign the Take It Down Act, which bans sharing non-consensual, AI-generated explicit images. So, yes—deepfakes of the President gets a hard no. But discriminatory algorithms in hiring or finance? May still be fair game.

Zoom-ing Out

This isn’t just about AI. It’s a power play in the broader fight over who gets to shape the future—tech giants or the public. If you care about responsible innovation, now’s the time to pay attention.

What This Means For You:

• For marketers: Transparency around AI-generated content and communications like Customer Support and Sales will be a hot-button issue—especially in regulated industries.

• For compliance teams: You can’t rely on federal guidance. States will be your new playbook.

This is a developing story. We’ll be covering this for the next few weeks.

More on this from CNN and American Progress. 

💸 Trump, Congress Strike Down CFPB’s Rule: No $5 Overdraft Cap

Just recently, President Trump officially signed off on a Congressional resolution to overturn the CFPB’s rule capping overdraft fees at $5 for large banks and credit unions.

The rule, which would have taken effect in October, aimed to rein in fees that critics say disproportionately affect low-income and unbanked consumers.

Instead of a hard cap, the CFPB had proposed three paths: a $5 flat fee, a cost-based fee, or keeping current rates—with clearer disclosures. The CFPB estimated the rule would have slashed $5 billion/year in bank fee revenue, as some institutions still charge $35 per overdraft.

Despite industry shifts to reduce or eliminate the fee, overdraft income remains a critical revenue stream for many traditional community banks.

What Happened?

Republicans, led by Senate Banking Committee Chair Sen. Tim Scott (R-SC), argued the rule would “reduce access to credit” and called it government interference.

Within 24 hours of the rule’s release, the ABA and others filed a lawsuit, alleging the rule exceeded CFPB authority. That legal challenge became irrelevant after the Congressional Review Act repeal went through and Trump signed it.

Trump also rolled back a second CFPB rule that would have let the agency scrutinize large digital payment providers for compliance with the Electronic Fund Transfer Act. Critics said both rules were rushed in the final days of the Biden administration.

What This Means

• Transparency Still Matters (Maybe More Than Ever). How you disclose fees—and the clarity of your messaging—is under the microscope. In a post-rule world, brand trust depends on how you communicate costs.

• Overdraft-Friendly Fintechs? Still Winning. Fintechs offering low-fee or fee-free overdraft alternatives may have lost a regulatory tailwind, but they’re still winning the marketing war—as long as they keep it compliant.

• Heads Up: It’s Not a Free Pass. Just because the federal rule is gone doesn’t mean you’re off the hook. States, class actions, and consumer watchdogs are still watching. Keep your compliance playbook close and do right by your customers.

More on this at Banking Dive.

🌴 Virgin Islands Tell Coca-Cola and Pepsi to Clean Up Their Mess

The U.S. Virgin Islands just hit Coca-Cola and PepsiCo with a scorching 42-page lawsuit, accusing them of flooding the islands with plastic—and sugar-coating it with bogus eco-marketing.

But this isn’t just bad PR. It’s a full-blown environmental emergency:

• Landfills are bursting—single-use drink containers make up 34% of the waste at St. Thomas’s nearly maxed-out Bovoni Landfill.

• Tourism is at risk—plastic pollution could tank an industry that makes up 60% of the GDP.

• Marine life is choking—86% of reefs are contaminated with microplastics, and it’s only getting worse.

• Taxpayers are paying for the cleanup—to the tune of $17.3 million a year.

The lawsuit goes after the whole supply chain—bottlers, distributors, and retailers included—making it one of the most aggressive environmental accountability cases in Caribbean history.

Welcome to the courtroom, Coke and Pepsi. This could become one of the most aggressive environmental accountability cases the Caribbean has ever seen—and a major test of whether “sustainable” branding can hold up in court.

Greenwashing Reality

The lawsuit meticulously documents what it calls "systematic greenwashing" by both companies. Among the most damning evidence:

• Recycling Claims: Both companies marketed packaging as "100% recyclable" despite internal documents acknowledging the territory lacks adequate recycling infrastructure.

• Environmental Commitments: Public sustainability reports from both companies pledged aggressive plastic reduction goals, but internal performance metrics tell a different story:

  • Coca-Cola used just 13.6% recycled plastic in 2022 (against a public commitment of 25%)

  • PepsiCo managed only 6.3% (against a public goal of 20%)

• Lobbying Activities: The lawsuit cites evidence that PepsiCo contributed over $3.8 million to industry groups specifically working to block plastic regulation in Caribbean territories, while simultaneously running "Clean Beaches" marketing campaigns.

• Consumer Research: Internal marketing documents allegedly show both companies deliberately targeted environmentally-conscious consumers with sustainability messaging despite knowing their supply chain practices contradicted their marketing claims.

What’s Next?

The Virgin Islands is seeking damages exceeding $1 billion, but legal experts suggest the case's importance extends far beyond monetary penalties.

• Precedent Setting: The case could establish new legal standards for corporate environmental accountability in territories and island nations.

• Extended Producer Responsibility: The lawsuit demands both companies implement comprehensive "cradle-to-grave" responsibility for their packaging, potentially creating new industry standards.

• Marketing Practice Revolution: If successful, the case could fundamentally alter how companies communicate environmental claims, especially in regions with limited waste infrastructure.

Why This Matters

• The End of Generic Green Claims: Marketing teams must now consider region-specific infrastructure realities before making broad environmental claims.

• Supply Chain Transparency: Environmental messaging must align with actual production practices, not aspirational goals or limited pilot programs.

• Cross-Departmental Alignment: Marketing, legal, sustainability, and supply chain teams must coordinate messaging to avoid dangerous disconnects.

• Regulatory Revolution: The case signals a shift from consumer-initiated greenwashing complaints to government-led enforcement.

Read more on The U.S Sun news.

Tune In: Marketing Under Fire: Surviving the CFPB’s New Era [Webinar]

May 29 @ 3 pm ET | LinkedIn

We’ll cover:
- What the BNPL rollback means for marketing claims and disclosures
- How state regulators and advocacy groups are stepping into the vacuum
- Common compliance risks that are still getting flagged
- How leading fintech teams are adjusting review processes with AI

If you’re responsible for customer-facing content in financial services, this is a session you won’t want to miss.

RSVP on LinkedIn.

💬 We’re launching a community for Marketing, Compliance, and Legal teams to stay up to date on regulatory changes—and help each other navigate them.

→ Join the community here.