NCSL Expresses Concern with RFIA

NCSL Expresses Concern with RFIA

Dear Chairman Scott and Ranking Member Warren,

On behalf of the National Conference of State Legislatures, the bipartisan organization representing the legislatures of our nation's states, territories and commonwealths, we write to express our concern with the Responsible Financial Innovation Act of 2025 (RFIA). As currently drafted, the legislation would establish a new market structure for digital assets but risks undermining the ability of states to protect their residents by preempting critical state consumer protection laws and enforcement tools.

Federal agencies alone cannot bear the full burden of regulating and policing a rapidly evolving digital asset industry. In an environment of constrained federal resources, it is more important than ever to preserve the authority of states to act swiftly and effectively against fraud and misconduct. We urge Congress to ensure that any federal digital asset legislation explicitly preserves states' authority to combat fraud and protect investors.

Our nation's system of federalism was designed to delegate specific powers to the federal government while reserving others to the states including the power to protect the welfare of their citizens. States have long played a vital role in enforcing civil and criminal laws tailored to the needs and priorities of their citizens. This enforcement is grounded in laws enacted by state legislatures, reflecting the will of the people they represent.

A core responsibility of states is to safeguard consumers from deceptive practices and financial harm displayed by bad actors who seek to exploit them. States have already taken meaningful action, bringing dozens of enforcement cases against fraudulent schemes and misconduct in the digital asset space. These efforts have been essential in protecting consumers and maintaining market integrity.

Unfortunately, proposals such as the RFIA introduce federal frameworks that do not adequately preserve existing state consumer protection laws. Without a clear and robust savings clause, courts may interpret these laws as preempting state authority, leaving consumers vulnerable and states mired in litigation and unable to act.

We strongly urge Congress to include explicit language, such as NASAA's Support Anti-Fraud Enforcement Act 2.0, in any digital asset legislation that preserves state consumer protection laws and enforcement authority. States must continue to play a central role in protecting consumers, deterring fraud and holding bad actors accountable. Preserving this role is essential to ensuring that the residents of our states remain protected in the face of emerging technologies and evolving markets.

Thank you for your consideration of this critical matter. For further discussion or information, please contact either of us or NCSL government affairs senior legislative director Barrie Tabin.

Sincerely,

Marcus C. Evans Jr.
NCSL President
Illinois House of Representatives

Barry Usher
NCSL President-Elect
Montana State Senate

Cc: Chairman John Boozman
Ranking Member Amy Klobucher

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