Good morning. The fight between banks and merchants over the credit-card fees that power your rewards cards is going local, opening the door to a future where your card only works in some states.

• What's the new law? An Illinois law set to go into effect this summer would ban credit-card fees on taxes and tips, the latest flashpoint in a battle that could shape the regulation and acceptance of credit cards.
   
• Why? Merchants, who pay a portion of every transaction to the bank issuing the card used, hate the fees and have been fighting for years to break the system apart.
   
• What do the banks think? Banks say the so-called interchange fees fund rewards like travel points and cash back that consumers love, as well as services like fraud prevention. The fees are set by card networks, like Visa and Mastercard, but are paid directly to banks that issue the card. The banks have opposed the Illinois law, warning that some small card issuers could withdraw from the state entirely if it goes into effect as planned on July 1.
   
• What could happen? Already a settlement between merchants and card companies is threatening to upend the rewards-card world, by allowing merchants more freedom to reject credit cards that charge them higher fees.

Top AI companies agree to Pentagon deals for classified work.

The Defense Department has completed agreements with eight technology companies, including many of the industry’s biggest, to use their artificial-intelligence capabilities in classified settings, boosting the Pentagon’s efforts to gain access to cutting-edge AI tools.

The department said Friday it was now capable of using in classified settings the technology and models from the ChatGPT maker, OpenAI; Alphabet’s Google; Elon Musk’s SpaceX; Microsoft; Amazon; Oracle; Nvidia; and a startup, Reflection AI. SpaceX owns Musk’s AI company, xAI.

• Anthropic’s Mythos Poses ‘National Security Moment’ for U.S., Pentagon Official Says (free link)

Ultra Electronics enters in $20 million settlement with U.K. Fraud Agency.

Risk Journal reports that defense company Ultra Electronics Holdings agreed to pay 14.8 million pounds, equivalent to $20 million, to settle an investigation by the U.K.’s Serious Fraud Office into the company’s failure to prevent bribery as it sought to win work in Oman and Algeria (free link).

Ultra Electronics acknowledged it failed to prevent bribery and entered into a deferred prosecution agreement, the SFO said. The DPA, approved by a judge Friday, requires Ultra Electronics to commit to compliance reforms and provide annual reports to the SFO for three years, the agency said.

• The U.S. Senate unanimously passed a bill aimed at shielding American companies from judgments in Russian courts resulting from compliance with U.S. sanctions and export controls, Risk Journal reports. (free link). 
   
• President Donald Trump is imposing additional sanctions on Cuba as the administration ramps up its efforts to topple the Cuban regime.
   
• Saddled by billions in crushing debt owed to Beijing, the Zambian government helped a Chinese-owned mining giant cover up one of the worst mining pollution incidents in the country’s history, according to an investigation by a U.S. House Select Committee on China.
   
• Lawmakers in three states are considering bills to make it harder for buyout firms and other corporate investors to buy law practices, a burgeoning investment strategy that was long off limits for private equity.
   
• A pair of senators have released a long-awaited compromise on a bill to regulate the cryptocurrency industry. It’s a big step forward, but there’s still significant uncertainty that the bill has time to become law this year.
   
• Corporate mentions of “renewable” and “clean energy” in investor filings rose to 1,760 in Q1 2026 from 1,368 in Q1 2025. The increase in clean energy mentions reflects companies seeking energy diversity amid an oil shock from the war in Iran.
   
• The long-delayed Farm Bill has finally begun moving again in Washington. On Thursday, the House passed its version, but the legislation still faces a difficult path in the Senate, where narrow margins and different priorities could reshape it.
   
• A U.S. appeals court has blocked doctors from mailing a popular abortion drug to pregnant women, in a temporary ruling that nonetheless deals a blow to access to the most common method for ending a pregnancy.

Trump says U.S. will guide stranded ships through Strait of Hormuz.

President Trump said Sunday the U.S. would start guiding commercial ships out of the Strait of Hormuz where they have been trapped by the war between the U.S. and Iran, in an arm’s-length effort to unblock the vital supply route.

Latest effort. The new mechanism, which Trump dubbed “Project Freedom,” is effectively a coordination cell to move traffic through the Strait, involving countries, insurance companies and shipping organizations, according to two senior U.S. officials. It doesn’t currently involve U.S. Navy warships escorting vessels through the strait, the officials said.

• Trump Tells Congress Iran Conflict Is Over, Sidestepping War Authorization
• Iran Softens Conditions for Resuming Peace Talks With the U.S.
• China’s ‘Teapot’ Refiners, Targeted by U.S., Offer Financial Lifeline to Iran
• Iran War Gives U.S.’s Rivals a Real-Time Look at Its Firepower

An aluminum crisis is roiling the auto industry.

The auto industry faces an aluminum shortage and sharply higher costs due to the Iran war, a 50% U.S. tariff, and a major supplier outage.

Ford stresses over aluminum. Ford, the auto industry’s largest aluminum buyer, saw adjusted profit reduced by $2 billion last year due to fires at its main supplier. Ford asked the Trump administration to waive the 50% aluminum tariff, but officials haven't agreed; its main supplier’s plant will gradually restart.

• President Trump has ordered the withdrawal of 5,000 U.S. troops from Germany, escalating his clash with Berlin and NATO allies over their reluctance to support the war in Iran, officials said Friday.
   
• U.S. oil companies are returning to Venezuela to explore reviving oil fields, driven by high oil prices and new investor-friendly laws.
   
• The jet-fuel crisis is turning into a disaster for airlines.
   
• China dominates global drone production, making countries like Russia, Ukraine and Iran dependent on its supply chain for military drones.
   
• Hezbollah’s military wing isn’t going anywhere and has no immediate plans to disarm, the Lebanese militant group’s spokesman said in a rare briefing with reporters.
   
• The U.S. will raise tariffs on automobiles from the European Union to 25% from 15%, President Trump said Friday, as he accused the 27-nation bloc of not complying with a trade agreement it signed last year.
   
• The Federal Reserve’s internal debate has shifted from when to cut interest rates to considering conditions that would warrant a rate increase.
   
• Mass shooting suspects used AI chatbots to ask questions about attacks, sparking lawsuits and investigations into AI companies’ reporting failures.
   
• Ukrainian drone strikes on Russian oil infrastructure have had a modest impact on Moscow’s oil money, as crude prices surged.
   
• Lululemon’s appointment of former Nike executive Heidi O’Neill as CEO backfired, causing shares to fall 13% on the day of the news and drawing criticism.

The Dow Jones Risk Journal Summit London on May 7 will convene senior business professionals for discussions on a range of corporate risks including supply chains, artificial intelligence, geopolitics and financial crime. Speakers include: Kathy Wengel, EVP, Chief Technical Operations and Risk Officer, Johnson & Johnson; Nish Imthiyaz, Global Privacy and Responsible AI Counsel, Vodafone; and Will Mayes, Chief Executive, Cyber Monitoring Centre.

Request a complimentary invitation here using the code COMPLIMENTARY. Attendance is limited, and all requests are subject to approval.