From State Capitols to D.C.: Four Key Legislative Trends During the First Six Months of 2025

Highlights: 

• The first half of 2025 saw significant legislative focus on economic stability, consumer data, AI, and medical debt, requiring businesses to stay updated on new regulations.

• Governments are actively pursuing consumer data protection, with new state laws on mortgage trigger leads and anticipated federal legislation. AI governance is also a major legislative focus, with states enacting comprehensive AI laws and ongoing federal discussions.

• Businesses must monitor state budget changes and federal reconciliation efforts impacting economic conditions. Evolving regulations and proposed legislation around medical debt also continue to influence financial and credit reporting.

Policymakers across the nation had an active first half of the year. With a new Administration and new Congress in Washington, D.C. and all 50 states in legislative session this year, state legislatures and Congress worked to advance their priorities. In the first six months of 2025, there was significant focus on economic stability, use of consumer data, artificial intelligence, and medical debt. Let’s take a closer look at these trending issues. 

Economic Factors Influence State and Federal Legislation

State Budgets

The Fiscal Year 2026 state budget process was lively, with some states nearly missing statutory deadlines. While certain states faced strained budgets, others had sizable surpluses and proposed tax cuts or increased spending on new initiatives. Overall, states anticipate higher spending pressures and are closely monitoring possible federal changes. A recently passed federal reconciliation bill could impose major costs on states, leading to future structural deficits for them, compounded by slowing state growth as pandemic-related federal aid winds down. Changes to federal funding, a significant portion of state revenue, could result in substantial budget shortfalls and difficult decisions for state lawmakers in the future.

Reconciliation

Congress focused on passing President Trump's key domestic policy legislation, the One Big Beautiful Bill Act (“OBBBA”). The foundation of the OBBBA is to extend tax cuts enacted as part of the 2017 Tax Cuts and Jobs Act, many of which would expire at the end of 2025 if not extended. The OBBBA addresses the national debt level by increasing the debt limit by $5 trillion. The OBBBA also makes substantial changes to government assistance programs, notably Medicaid and food assistance programs. These programmatic changes restrict eligibility, require certain adult benefit recipients to work or meet job training and education requirements, and hold states accountable for efficient administration of the programs and reducing fraud, waste, and abuse. The OBBBA passed the House on May 22 and cleared the Senate on July 1, after a marathon voting session. President Trump and Congressional Republican leadership finalized the bill on July 4.  

Consumer Data Protection Remains Among Top Priorities

Data Privacy

In many ways, artificial intelligence (AI) and a focus on consumer protection and privacy are increasingly intertwined when it comes to legislation, with many states opting to pass legislation focused on both. States want to prioritize consumer protection, including mitigating potential AI-driven harms.

At the federal level, reaching agreement on a comprehensive data privacy regulatory structure has remained out of reach. Congressional staff have started reaching out to the public to gather information and suggestions on how to develop a national framework that protects consumers and ensures that the U.S. is competitive in the global economy. Though it is unlikely that federal data privacy legislation will pass in 2025, we anticipate the dialogue to continue over the next several months. 

Mortgage Trigger Leads

Several states have implemented statutes governing the utilization of mortgage trigger leads, including Connecticut, Kentucky, Maine, and Texas, with Kansas, Rhode Island and Wisconsin maintaining comparable requirements. In 2025, four states passed new laws related to the use of mortgage trigger leads, including Arkansas, Georgia, Iowa and Utah. These new state laws require users of mortgage trigger services to adhere to the requirements of the Fair Credit Reporting Act (FCRA) but do not prohibit the sale or use of mortgage trigger leads. Pending federal legislation, the Homebuyers Privacy Protection Act, would go further by restricting the use of mortgage trigger leads unless the consumer has provided express consent or there is a preexisting customer relationship. The Homebuyers Privacy Protection Act is likely to become law this year. 

Daniel’s Laws

In the first half of 2025, we saw a continued uptick in Daniel’s Law legislation, with 12 states introducing bills. The bills, as drafted, primarily focus on expanding and refining privacy protections for public officials. This trend is evident even in New Jersey, where the original Daniel's Law was enacted. Following the 2025 shooting of two Minnesota legislators, New Jersey lawmakers considered expanding Daniel's Law to include state legislators in the list of protected individuals, aiming to shield their personal information like home addresses.  While this effort stalled, we expect to see more legislation in 2026.  

AI Emerges as Legislative Focus 

State lawmakers are increasingly moving to take action on AI-related legislation to regulate the development and deployment of certain AI systems. In recent years, 31 states have passed laws to address AI in some capacity. However, those bills have mostly tackled discrete policy concerns or established entities to study the potential impacts of AI. 

In 2025, we saw a continued surge in state-level AI legislation, with over 550 AI-focused bills introduced. These bills primarily addressed concerns such as transparency and data privacy. A key theme, too, among states was the introduction of legislation related to requirements for businesses utilizing AI to disclose their AI system usage and ensure accountability for algorithmic decisions. As of July 2025, four states have passed comprehensive AI governance legislation: California, Colorado, Utah, and Texas. Notably, states like California and Colorado continue to be at the forefront of establishing regulatory and compliance frameworks for AI systems, with Colorado passing a first-of-its-kind AI bill in 2024. It has been expected that Colorado’s bill could spur other states to adopt similar legislation, potentially creating a patchwork of state AI laws with which companies must comply absent any overarching federal regulation.

On his first day in office, President Trump rescinded an Executive Order on AI and replaced it with a new Executive Order requiring the development of an AI Action Plan and establishing a goal of maintaining U.S. dominance in AI. In April 2025, President Trump issued an Executive Order intended to promote AI literacy and education.  

Meanwhile, Congress has held hearings and established working groups to examine AI regulation, though it has not passed widescale legislation to regulate the development, use, and oversight of AI. In the OBBBA, Congress came close to including language to place a moratorium on states’ enforcement of state AI laws and regulations. This provision became controversial and was ultimately removed from the legislation. It is likely that the debate will continue on whether states or the federal government should be the primary regulator of AI. Committees in the House and Senate continue to examine AI and debate the establishment of guardrails. 

Attention on Medical Debt Continues in 2025

In January 2025, the Consumer Financial Protection Bureau (CFPB) finalized regulations to prohibit the inclusion of medical debt information in consumer reports, or for use in credit underwriting decisions. The regulations have not taken effect due to ongoing litigation, though this month, the regulations were blocked by a federal judge.

In 2025, several bills focused on medical debt have been introduced in state legislatures. These bills cover a range of issues, including prohibiting medical debt on consumer reports, prohibiting hospitals from suing patients for medical debt, establishing medical debt relief programs, and requiring greater transparency in hospital pricing and medical debt reporting. In 2025, eight state legislatures passed medical debt legislation: Delaware, Maine, Maryland, New York, Oregon, Vermont, Virginia and Washington. 

Overall, the first half of 2025 has been a period of dynamic legislative activity at both state and federal levels. From navigating complex budget landscapes and the sweeping impact of the OBBBA, to the continued evolution of consumer data privacy, the emergence of AI as a critical regulatory frontier, and persistent efforts to address medical debt, policymakers have demonstrated a clear intent to address these pressing issues. The ongoing debates and newly enacted laws highlight a rapidly changing regulatory environment that businesses and consumers alike will need to continue to monitor closely.

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