Money Matters: This Week in Washington
This Week in Washington for December 4, 2017
By Dina Ellis and Casey Miller
THE BIG PICTURE
The Senate spent most of last week working on the US$1.5T Republican plan for a tax overhaul, which passed the chamber early in the morning on December 2. The week was spent editing the plan and counting votes until the GOP had a majority. The plan includes massive spending cuts to various programs. The bill would slash the corporate tax rate from 35 percent to 20 percent, though President Trump said on Saturday morning that he would be willing to set a 22 percent corporate tax rate. When the plan failed to receive Democratic support, the President tweeted that the Democrats were blocking the legislation because "they think it is too good and will not be given the credit."
Battles were waged last week over who would lead the Consumer Financial Protection Bureau after the resignation of former Director Richard Cordray. Cordray named Leandra English, Deputy Director, to serve as his replacement through the end of the term. President Trump named Mick Mulvaney, currently head of the Office of Management and Budget, to serve as Director. After English sued in order to take the place at the helm, the court sided with the Administration and Mulvaney stepped in as Director. At the end of the week, former lawmakers Chris Dodd and Barney Frank teamed up again to protest the President's appointment. President Trump is working to pick a permanent Director, with reports stating the House Financial Services Chairman Jeb Hensarling (R-TX) is high in the running.
Former National Security Adviser Michael Flynn was indicted on Thursday on one count of making a false statement to the Federal Bureau of Investigation. This is the latest step in the investigation into Russian meddling in the election, which is being led by Special Counsel Robert Mueller. On Friday, Flynn pled guilty and said that he is cooperating with Mueller.
According to sources, Republicans are preparing a stopgap spending bill that would fund the government through December 22, though the party is still reaching an agreement on the date and content of the measure. Government funding will expire on Friday if an extension is not passed. Also set to expire on Friday is the National Flood Insurance Program.
There continues to be fallout with various members facing allegations of sexual harassment. Representative Joe Barton (R-TX) announced that he will not be seeking reelection. Both chambers of Congress are now requiring sexual harassment training for employees.
LAST WEEK ON THE HILL
HOUSE FINANCIAL SERVICES COMMITTEE
- H.R 2219, the "End Banking for Human Traffickers Act of 2017"
- H.R.____, the "Counter Terrorism and Illicit Finance Act"
- Mr. Daniel H. Bley, Executive Vice President and Chief Risk Officer, Webster Bank, on behalf of the Mid-Size Bank Coalition of America
- Mr. John J. Byrne, President, Condor Consulting, LLC
- Mr. William J. Fox, Managing Director, Global Head of Financial Crimes Compliance, Bank of America, on behalf of The Clearing House
- Ms. Stefanie Ostfeld, Deputy Head of US Office, Global Witness
- Mr. Chip Poncy, President and Co-Founder, Financial Integrity Network
- H.R. ____,"American Customer and Market Information Protection Act"
Following the hearing, Rep. Bill Huizenga told reporters that he is not discouraged from moving forward with the legislation, which would indefinitely delay the CAT.
Witnesses at the hearing included:
- Mr. Mike Beller, Chief Executive Officer, Thesys Technologies, LLC
- Mr. Chris Concannon, President and Chief Operation Officer, Chicago Board of Options Exchange
- Mr. Tyler Gellasch, Executive Director, Healthy Markets Association
- Ms. Lisa Dolly, Chief Executive Officer, Pershing, on behalf of the Securities Industry and Financial Markets Association
- The Honorable Marshall Billingslea, Assistant Secretary for Terrorist Financing, U.S. Department of the Treasury
- Mr. John E. Smith, Office of Foreign Assets Control, U.S. Department of the Treasury
SENATE BANKING COMMITTEE
Committee Holds Executive Session and Nomination Hearing: On November 28, the Committee met to vote on the following nominations at the Department of Housing and Urban Development:
The Honorable Brian D. Montgomery, to be Assistant Secretary for Housing – Federal Housing Commissioner
Mr. Robert Hunter Kurtz, of Virginia, to be Assistant Secretary for Public and Indian Housing
Ms. Suzanne Israel Tufts, of New York, to be Assistant Secretary for Administration
Following the Executive Session, the Committee met in open session to conduct a hearing on the nomination of The Honorable Jerome H. Powell to be Chairman of the Board of Governors of the Federal Reserve System. The Committee will vote on the nomination on December 5.
ON THE FLOOR
LEGISLATION INTRODUCED AND PROPOSED
House Members Introduce Legislation to Repeal Payday Lending Rule: A bipartisan group of House Members are introducing legislation that would repeal a rule the CFPB drafted to crack down on payday lenders. Rep. Dennis Ross (R-FL) is introducing the legislation that would use the Congressional Review Act to block the legislation. The resolution lists five co-sponsors: Rep. Alcee Hastings (D-FL), Tom Graves (R-GA), Henry Cuellar (D-TX), Steve Stivers (R-OH), and Collin Peterson (D-MN).
NEXT WEEK ON THE HILL
Tuesday, December 5
Senate Banking Committee,
Wednesday, December 6
House Financial Services Subcommittee on Housing and Insurance, Hearing entitled “
Thursday, December 7
House Financial Services Subcommittee on Oversight and Investigations, Hearing entitled “
House Financial Services Subcommittee on Financial Institutions and Consumer Credit, Hearing entitled “
Securities and Exchange Commission (SEC) Official Says Additional ICO Enforcement Actions Likely: Speaking at a small business capital formation forum, Division of Corporation Finance Director William Hinman said that the agency is expecting to take additional enforcement actions regarding initial coin offerings. Hinman said "I think you will see more of our guidance through the enforcement actions we expect to bring."
Department of Labor Delays Part of Fiduciary Duty Rule: The Department of Labor announced last week that it is delaying until July 1, 2019 a part of the fiduciary duty rule known as the "best interest contract exemption." The provision was set to go into effect on January 1, 2018.
Federal Reserve Governor Randal Quarles Expresses Concern over Cryptocurrency: Speaking at a Fintech conference sponsored by the Federal Reserve Bank of Cleveland, Federal Reserve Governor Randal Quarles said that digital currencies such as bitcoin may not be secure enough for widespread public use. According to Quarles, "while these digital currencies may not pose major concerns at their current levels of use, more serious financial-stability issues may result if they achieve wide-scale usage."
Speaking at a different event at the Treasury Department, Quarles downplayed the prospect that central banks should issue their own digital currencies. He said that he is "particularly concerned that a central-bank-issued digital currency that's held widely around the globe could be the subject of serious cyberattacks and could be widely used in money laundering and terrorist financing."
Federal Reserve Chair Janet Yellen Testifies Before Joint Economic Committee: Janet Yellen testified before Congress' Joint Economic Committee on November 29. Among her comments was the statement that the U.S.'s rising debt "should keep people awake at night." She also said that the Fed remains committed to easing regulatory burdens on community banks. Speaking on Senate Banking Committee bill
COMINGS AND GOINGS AT THE AGENCIES
Joseph Otting Sworn in as Comptroller of Currency: Joseph Otting was sworn in last week as Comptroller of the Currency, replacing acting Comptroller Keith Noreika.
President Trump Names Marvin Goodfriend to Serve as Fed Governor: President Trump has named Marvin Goodfriend to serve as a Federal Reserve Governor. Goodfriend is currently a professor at Carnegie Mellon University.
President Trump Nominates Federal Deposit Insurance Corporation Chair: President Trump has nominated Jelena McWilliams to serve as the next Chair of the FDIC. McWilliams is currently Chief Legal Officer at Fifth Third Bank.
President Trump to Nominate Thomas Workman to Financial Stability Oversight Council: President Trump will nominate former insurance trade group executive Thomas Workman to serve on FSOC as the independent insurance expert. The position is currently held by Roy Woodall, whose term expired in September.
President Donald Trump Names Brian Johnson to CFPB: President Trump appointed Brian Johnson, a Senior Counsel for the House Financial Services Committee, to a high-level position at the CFPB. Johnson will report to Acting CFPB Director Mick Mulvaney.
Chief Accountant to Leave SEC: The Securities and Exchange Commission announced on November 30 that Mark Kronforst, Chief Accountant of the SEC’s Division of Corporation Finance, plans to leave the SEC in early January after 13 years of public service with the investor protection agency.