Apart from the growing influence of money in the electoral process, and increased criticism of the legislation, there was another, more political reason for a legislative initiative on the issue of campaign finance in the 1920s: the Teapot Dome scandal. The controversial lease of Navy petroleum reserves by government officials to businessmen became a subject of investigation, which revealed serious corrupt practices among high ranking political officers. Although the scandal did not directly refer to the issue of campaign finance, the investigation proved that large contributions were made by big business to politicians during non-election years. Therefore, after the Newberry precedent and Teapot Dome Scandal, Congress decided to act by passing another Federal Corrupt Practices Act.

The legislation was aimed at enhancing the enforcement of the campaign finance laws by granting more powers to Congress and imposing stricter regulation. It placed more restrictions on the size and character of campaign contributions, as well as on the disclosure of financial reports, which now had to be filed quarterly. Every donation of $100 or more, made in both election and non-election years, was now reportable. While the limits on how much candidates were able to spend in U.S. Senate elections were now raised, these regulations were confined to general elections, in accordance with the Newberry decision. As time showed, the 1925 law became the major legislation in the area of campaign finance for the next four decades, until early the 1970s and the enactment of the Federal Election Campaign Act.