This Week in Washington for April 29, 2019
By Dina Ellis
THE BIG PICTURE
Following months of speculation, former Vice President Joe Biden announced his campaign for the presidency on Thursday. In a video he vowed to bridge the divide in an increasingly polarized country, saying, “We have to remember who we are. This is America.” Earlier in the week, Congressmen and former marine Seth Moulton (D-CA) also announced his bid, focusing his platform on national security, veterans issues and voting rights.
Senator and presidential contender Elizabeth Warren (D-MA) introduced a sweeping legislative proposal on Monday, which called for canceling US$640B in student debt. Sen. Warren argued that the student debt crisis is a universal problem facing the country, which is crippling American potential by reducing home ownership rates and the ability of individuals to start businesses and complete degrees. The plan would cancel US$50K in debt for individuals in households with income under US$100K, while providing “substantial debt cancellation” to those with household incomes between US$100K–$250K. The proposal also includes a provision which would eliminate tuition and fees at two- and four-year public colleges.
Other highlights of last week include:
The President continued to defend himself following the release of Special Counsel Robert Mueller’s report, saying via Twitter that, “I did nothing wrong,” and pledging to challenge any impeachment efforts at the Supreme Court.
Congressional Democratic leaders Nancy Pelosi and Chuck Schumer are set to meet with the President on Tuesday to discuss infrastructure.
After missing the second deadline to turn over the President’s personal tax returns, Treasury Secretary Steven Mnuchin announced that a final decision on the request would be made by May 6th.
On Sunday former six-term Indiana Senator Richard Lugar passed away at the age of 87. He was remembered as a leader in the foreign policy realm and dedicated public servant.
LAST WEEK ON THE HILL
Congress in recess.
LEGISLATION INTRODUCED AND PROPOSED
H.R. 2362: On Thursday, Rep. Mark Meadows (R-NC) introduced H.R. 2362, the “American Agriculture First Act,” which would prioritize the purchase of agricultural commodities from domestically owned enterprises.
H.R. 2364: On Thursday, Rep. Gregory Meeks (D-NY) reintroduced H.R. 2364, the “Investor Choice Against Gun Proliferation Act,” which would require public companies to disclose their financial relationships with manufacturers, dealers and other entities in the gun industry, to increase transparency and help investors make informed decisions. In a statement, Rep. Meeks said that, “Tens of thousands of lives are lost every year to gun violence, and Americans have a right to know whether their financial investments are inadvertently having a negative human impact.”
H. Res. 327: On Thursday, Congressmen Bill Foster (D-IL) and French Hill (R-AR), introduced H.Res. 327, a resolution which would encourage greater public-private sector collaboration to promote financial literacy for students and young adults.
H. Res. 328: On Thursday, Rep. Sean Casten (D-IL) introduced H. Res. 328, a resolution which would support the protection of elders through financial literacy.
THIS WEEK ON THE HILL
Tuesday, April 30
House Financial Services Committee Hearing on
House Financial Services Committee (Subcommittee on Consumer Protection and Financial Institutions) Hearing on
Senate Banking Committee Hearing on “
Legislation Considered Under Suspension of the Rules:
H.Res. 327 - Encouraging greater public-private sector collaboration to promote financial literacy for students and young adults (Sponsored by Rep. Bill Foster)
H.R. 1876 - Senior Security Act of 2019 (Sponsored by Rep. Josh Gottheimer)
Wednesday, May 1
Senate Judiciary Committee Hearing on “
Senate Commerce Committee Hearing on “
House Financial Services Committee (Subcommittee on Oversight & Investigations) Hearing on “
House Financial Services Committee (Subcommittee on Diversity and Inclusion) Hearing on “
House Agriculture Committee Hearing on “The State of the CFTC”: 10:00 AM in 1300 Longworth House Office Building.
CFPB Announces Policy Change Regarding Bureau Civil Investigative Demands: On Tuesday, the CFPB announced changes to policies regarding Civil Investigative Demands (CIDs) in a bid to increase transparency and ensure they provide more information about the potentially wrongful conduct under investigation. Consistent with the updated policy, CIDs will provide more information about the potentially applicable provisions of law that may have been violated as well as specify the business activities subject to the Bureau’s authority. In investigations where determining the extent of the Bureau’s authority over the relevant activity is one of the significant purposes of the investigation, staff may specifically include that issue in the CID in the interests of further transparency.
CFPB Issues Request for Information on Remittance Rule: On Thursday, the CFPB issued a Request for Information (RFI) on its Remittance Rule. The Remittance Rule imposes requirements on companies which send international money transfers, or remittance transfers, on behalf of consumers. Among its requirements, the Rule mandates that providers generally must disclose the exact exchange rate, the amount of certain fees, and the amount expected to be delivered to the recipient. The Bureau is requesting information on two aspects of the Remittance Rule: First, the Bureau is asking for information to determine whether to propose changing the remittance transfer providers the Rule covers. Second, the Bureau is asking for information about the expiration of a temporary exception in the Rule that allows certain insured institutions to estimate the exchange rate and certain fees they are required to disclose when sending remittance transfers.
Federal Reserve Seeks Comments on Proposal to Simplify Rules for Determining Control of a Banking Organization: On Tuesday, the Federal Reserve Board invited public comment on a proposal that would simplify and increase the transparency of the Board’s rules for determining control of a banking organization. In particular, the proposal lays out several factors and thresholds that the Board will use to determine if a company has control over a bank. The key factors include the company’s total voting and non-voting equity investment in the bank; director, officer, and employee overlaps between the company and the bank; and the scope of business relationships between the company and the bank. The proposal clearly describes what combination of those factors would and would not trigger control. “Providing all stakeholders with clearer rules of the road for control determinations will responsibly reduce regulatory burden,” Chair Jerome Powell said. “As a result, it will be easier for banks, particularly community banks, to raise capital to support lending and investment.”
SEC Announces Members of Small Business Capital Formation Advisory Committee: On Thursday, the SEC announced the inaugural members of the Small Business Capital Formation Advisory Committee. The Committee will hold its first meeting on Monday, May 6, 2019, at the SEC’s headquarters in Washington, D.C. The Committee was established by the SEC Small Business Advocate Act of 2016 and is designed to provide a formal mechanism for the Commission to receive advice and recommendations on Commission rules, regulations and policy matters relating to small businesses, including smaller public companies. The Committee replaces the Advisory Committee on Small and Emerging Companies, whose term expired in 2017.
CFTC Approves Proposed Swaps Data Rule: On Thursday, the CFTC approved a proposed rule to improve the quality of swap data and to update and streamline regulations related to swap data repository (SDR) operations and governance. The proposal will (1) Update requirements for SDRs to verify swap data with reporting counterparties; (2) Update requirements to correct swap data errors and omissions for SDRs, reporting counterparties, and other market participants; and (3) Update and clarify SDR operational requirements to ensure that data is available to the CFTC and the public, as required by the Commodity Exchange Act.
Treasury Targets Sanctions Evasion Conduits for Major Hizballah Financiers: On Wednesday, Treasury’s Office of Foreign Assets Control (OFAC) further targeted the global business operations of Hizballah by designating two individuals and three entities acting as conduits for sanctions evasion schemes. “As Hizballah continues to attempt to obscure its activities by using seemingly legitimate businesses, we will continue to take action against the front persons who hide the movement of money, including the relatives of designated terrorists,” said Sigal Mandelker, Treasury Under Secretary for Terrorism and Financial Intelligence.
Treasury Sanctions Venezuelan Minister of Foreign Affairs: On Friday, Treasury’s Office of Foreign Assets Control (OFAC) designated Jorge Alberto Arreaza Montserrat, the Venezuelan Minister of Foreign Affairs, and Carol Bealexis Padilla de Arretureta. In a statement, Treasury Secretary Steven Mnuchin said that, “Treasury will continue to target corrupt Maduro insiders, including those tasked with conducting diplomacy and carrying out justice on behalf of this illegitimate regime. This Administration stands with the Venezuelan people and alongside an international coalition committed to holding accountable those who are responsible for Venezuela’s tragic decline.”
COMINGS AND GOINGS AT THE AGENCIES
Cain Withdraws from Consideration for Fed Seat While Moore Remains: On Monday, the President announced that he would not nominate Herman Cain for one of the open seats at the Fed, saying, “My friend Herman Cain, a truly wonderful man, has asked me not to nominate him for a seat on the Federal Reserve Board. I will respect his wishes.” The President’s other pick, Stephen Moore, noted that he remains “totally committed” to the process but would withdraw if he becomes a “liability” due to “something I said or something I’ve done.”
President Trump Sues to Block House Judiciary Subpoena: On Monday, the President filed suit to block House Judiciary Chairman Elijah Cumming’s subpoena for documents to Mazars USA, his personal accounting firm. His attorney Jay Sekulow said of the case that, “We will not allow congressional presidential harassment to go unanswered.”
Fourth Circuit Strikes Down Amendment Allowing Robocalls to Collect Government Debt: On Wednesday, the Fourth Circuit ruled that a 2015 amendment to the Telephone Consumer Protection Act, which permitted the use of robocalls as part of efforts to collect on government debt, was unconstitutional. Judge Robert King wrote that the exemption “cannot be said to advance the purpose of privacy protection, in that it actually authorizes a broad swath of intrusive calls,” adding that “the debt-collection exemption exposes millions of American consumers to some of the most disruptive phone calls they receive. The exemption therefore erodes the privacy protections that the automated call ban was intended to further.”
OTHER NOTEWORTHY ITEMS
FINRA Launches Office of Financial Innovation: On Wednesday, FINRA announced it was launching an Office of Financial Innovation that will be focused on new uses of financial technology (fintech). “Innovation continues to pose new opportunities and challenges for our member firms and the broader financial services industry, and it is essential that we as regulators keep pace,” said FINRA President and CEO Robert Cook. “The Office of Financial Innovation will further FINRA’s long-standing commitment to understanding and addressing these issues through coordinated responses that foster both innovation and investor protection.