Money Matters: This Week in Washington

This Week in Washington for July 27, 2020

July 27, 2020

Dina Ellis


For the latest advice for businesses dealing with the coronavirus, be sure to check out Paul Hastings’ targeted alert series: https://www.paulhastings.com/coronavirus

Coronavirus cases continued to surge around the country as infections surpassed the 4 million mark. The President resumed his televised press briefings, which had been shelved in April, adopting a more serious tone in warning the crisis will “unfortunately, get worse before it gets better.” He urged Americans to wear masks whenever they were unable to maintain social distance, a departure from his earlier reluctance to support masking policies. He also reiterated his support for reopening schools for in-person instruction, announcing the CDC would be releasing supplemental guidance and resources on the issue.

Negotiations over the parameters of an additional relief package remain ongoing after divisions between the administration and Republican leadership on key issues delayed the unveiling of Majority Leader Mitch McConnell’s US$1T proposal. The measure is expected to focus on “kids, jobs, and healthcare” and include US$105B in aid for schools to support reopening, US$25B for testing, a continuation of the Paycheck Protection Program, and additional direct stimulus payments to Americans. Disagreements over the extension of enhanced unemployment benefits persist and have proven a flashpoint as the July 31st expiration date looms. The President’s preferred payroll tax holiday failed to garner support and will not be included in the package. The delay has put Congress on a tight deadline, and the House is expected to delay its August recess by a week in the hope that a measure can be passed beforehand.

Other highlights of last week include:

  • An additional 1.4 million Americans filed unemployment claims last week, a slight uptick which ended weeks of decreasing claims.

  • It was announced that the late Rep. John Lewis will lie in state at the U.S. Capitol. Lewis will be honored during a private ceremony in the Rotunda on Monday, followed by a public viewing on the Capitol steps.

  • The President announced the cancellation of the Jacksonville, Florida component of the Republican National Convention, citing coronavirus safety concerns.

  • The President’s former personal attorney Michael Cohen was released from prison on Friday after a federal judge determined his re-imprisonment earlier this month was “retaliatory” in nature.


Brown, Cortez Masto, and Colleagues Press OCC for Information on the Agency’s Fair Lending Oversight: On Tuesday, Senators Sherrod Brown (D-OH) and Catherine Cortez Masto (D-NV) joined 16 of their Senate colleagues in sending a letter to the Office of the Comptroller of the Currency (OCC), pressing the agency for information on how it pursues violations of civil rights laws by financial institutions. The Senators cited press reports that show the OCC undermined OCC examiners’ efforts to investigate and pursue violations of fair housing and fair lending laws. The Senators called for the OCC to provide Congress with information about its enforcement activity and reaffirm the agency’s commitment to enforcing fair mortgage lending as required by law.


Hearing on “The Heroes Act: Providing for a Strong Economic Recovery from COVID-19”: On Thursday, the full Committee held a hearing to discuss provisions of the HEROES Act, passed by the House in May, as well as the need for further help among families and communities hit hardest by the COVID-19 pandemic.

  • Shaun Donovan, former Secretary, U.S. Department of Housing and Urban Development, and former Director, U.S. Office of Management and Budget

  • Robert Reich, Carmel P. Friesen’s Professor of Public Policy, Goldman School of Public Policy, University of California, Berkeley, and former Secretary, U.S. Department of Labor

  • John Rogers, Jr., Chairman, Co-CEO & Chief Investment Officer, Ariel Investments

  • Steven Davis, Labor Economist, William H. Abbot Professor of International Business and Economics, The University of Chicago Booth School of Business


Hearing on “Nominations”: On Tuesday, the full Committee held a hearing to consider two nominees to the Securities and Exchange Commission—Commissioner Hester Peirce for a second term, and Ms. Caroline Crenshaw, and Mr. Kyle Hauptman as a nominee to be a Board Member of the National Credit Union Administration. Sen. Elizabeth Warren (D-MA) said it “would be a mistake” to give Pierce a second term as she hasn’t shown a willingness to confront “powerful interests” in the industry.

  • Hester Peirce, to be a Member of the Securities and Exchange Commission

  • Caroline Crenshaw, to be a Member of the Securities and Exchange Commission

  • Kyle Hauptman, to be a Member of the National Credit Union Administration Board

Executive Session on “Nominations”: On Tuesday, the full Committee held a hearing to session to vote on the nominations of Judy Shelton and Christopher Waller, to serve as Members of the Board of Governors of the Federal Reserve. Shelton’s nomination has proven controversial, due to her prior advocacy for a return to the gold standard, and skepticism of the importance of an independent Fed. Despite this, the panel voted 13-12 on party lines to advance her nomination, and 18-7 to advance Waller.

Hearing on “US-China: Winning the Economic Competition”: On Wednesday, the Subcommittee on Economic Policy held a hearing to discuss various facets of the US-China economic relationship, as well as methods to ensure the economy is strong for all Americans and for future generations.

  • Walter Russell Mead, Chace Professor of Foreign Affairs and the Humanities at Bard College, Distinguished Fellow at Hudson Institute, and The Wall Street Journal's Global View columnist

  • Chris Giancarlo, Senior Counsel, Willkie Farr & Gallagher and former Chairman, U.S. Commodity Futures Trading Commission

  • Tim Morrison, Senior Fellow, Hudson Institute; Dr. Lisa D. Cook, Professor of Economics and International Relations, Michigan State University

  • Martijn Rasser, Senior Fellow in the Technology and National Security Program at the Center for a New American Security (CNAS)


Senate Committee on Small Business & Entrepreneurship Hearing on “Capital Access for Minority Small Businesses: COVID-19 Resources for an Equitable and Sustainable Recovery”: On Thursday, the Committee held a hearing to focus on capital access for minority small businesses during the COVID-19 pandemic.

  • Talibah Bayles, Founder and CEO, TMB Tax and Financial Services

  • Ronald Busby Sr., President and CEO, U.S. Black Chambers, Inc.

  • Fabiana Estrada, Director of Lending Southeast, Accion

  • Marla Bilonick, Executive Director and CEO, Latino Economic Development Center


Senate Confirms Vought to Lead OMB: On Monday, the Senate voted to confirm Russ Vought to lead the Office of Management and Budget. Vought has served as interim director of the agency for over a year.

Senate Passes Measure to Ban Garnishment of Stimulus Payments: On Thursday, the Senate passed by unanimous consent S. 3841, a bipartisan measure introduced by Senators Sherrod Brown (D-OH) and Chuck Grassley (R-IA), intended to protect CARES Act recovery payments provided from garnishment by private debt collectors.

Senate Passes National Defense Authorization Act: On Thursday, the Senate voted 86-14 to pass the National Defense Authorization Act, which included a provision to rename military bases named after Confederate figures. The President had threatened to veto the measure, although it passed both the Chambers with veto-proof majorities.

House Approves Spending Package: On Friday, the House voted 224-189 to pass a four-bill US$259.5B spending package in a bid to prevent a government shutdown. Despite passing the appropriation bills, the likeliest scenario remains a stopgap measure. The House has teed up an additional seven-bill US$1.4T minibus that will be voted on this week.


H.R. 7671: Rep. Filemon Vela (D-TX) introduced H.R. 7671, which would provide for the establishment of a COVID-19 Small Business Recovery Fund.

H.R. 7688: Rep. David Kustoff (R-TN) introduced H.R. 7688, which would amend the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 to establish a Portal for Appraiser Credentialing and AMC Registration Information.

H.R. 7709: Rep. Gregory Meeks (D-NY) introduced H.R. 7709, which would amend the CARES Act to establish community investment programs.

H.R. 7717: Rep. Rashida Tlaib (D-MI) introduced H.R. 7717, which would authorize Federal reserve banks to purchase COVID-19 related municipal issuances.

H.R. 7738: Rep. Matt Cartwright (D-PA) introduced H.R. 7738, which would require the integration of climate-resilience considerations into all development work of the United States.

H.R. 7743: Rep. Rosa DeLauro (D-CT) introduced H.R. 7743, which would require the Secretary of Housing and Urban Development to establish a national evictions database.

S. 4213: Sen. Joni Ernst (R-IA) introduced S. 4213, which would exclude from income and payroll taxes compensation received by front-line employees during the COVID-19 emergency.

S. 4214: Sen. Rob Portman (R-OH) introduced S. 4214, which would provide a payroll tax credit for certain expenses associated with protecting employees from COVID-19.

S. 4268: Sen. Maggie Hassan (D-NH) introduced S. 4268, which would improve coordination between the paycheck protection program and employee retention tax credit.

S. 4275: Sen. John Thune (R-TX) introduced S. 4275, which would require recipients of Pandemic Unemployment Assistance to provide employment documentation.

S. 4283: Sen. Ron Wyden (D-OR) introduced S. 4283, which would provide funding for States to improve their unemployment insurance technology systems.

S. 4297: Senators Ted Cruz (R-TX), Thom Tillis (R-NC), David Perdue (R-GA), and Kelly Loeffler (R-GA) introduced S. 4297, the Addressing Missed-savings Opportunities for Retirement due to an Epidemic Act (AMORE Act), legislation that would allow individuals facing financial challenges and who are unable to make contributions to their tax-advantaged retirement accounts in 2020 to make "catch-up" contributions to these accounts in the coming years.


Wednesday, July 29

Senate Banking Committee Hearing on “The Consumer Financial Protection Bureau’s Semi-Annual Report to Congress”: 10:00 AM via WebEx.

Thursday, July 30

House Financial Services Committee Hearing on “Protecting Consumers During the Pandemic? An Examination of the Consumer Financial Protection Bureau”: 12:30 PM.


Federal Reserve Board Announces Expansion of Counterparties in the TALF, SMCCF, and CPFF: On Thursday, the Federal Reserve Board broadened the set of firms eligible to transact with and provide services in three emergency lending facilities. Encouraging a broader range of agents for the Term Asset-Backed Securities Loan Facility (TALF) and counterparties for the Commercial Paper Funding Facility (CPFF) and Secondary Market Corporate Credit Facility (SMCCF) will increase the Federal Reserve's operational capacity and insight into the respective markets.

Agencies Adopt Final Rule on the Orderly Liquidation of Covered Broker-Dealers under Title II of the Dodd-Frank Act: On Friday, the SEC and FDIC adopted a final rule required by the Dodd-Frank Act clarifying and implementing provisions relating to the orderly liquidation of certain brokers or dealers (covered broker-dealers) in the event the FDIC is appointed receiver under Title II of the Dodd-Frank Act. The FDIC and SEC developed the final rule in consultation with the Securities Investor Protection Corporation (SIPC).

SEC Adopts Rule Amendments to Provide Investors Using Proxy Voting Advice More Transparent, Accurate, and Complete Information: On Wednesday, the SEC voted 3-1 to adopt amendments to its rules governing proxy solicitations designed to ensure that clients of proxy voting advice businesses have reasonable and timely access to more transparent, accurate, and complete information on which to make voting decisions. The amendments condition the availability of two exemptions from certain of the federal proxy rules often used by proxy voting advice businesses on compliance with tailored and comprehensive conflicts of interest disclosure requirements.

Federal Reserve Board Finalizes Rule Implementing Technical, Clarifying Updates to FOIA Procedures, and Changes to Rules for the Disclosure CSI: On Friday, the Federal Reserve Board finalized a rule that implements technical, clarifying updates to its Freedom of Information Act (FOIA) procedures, and changes to its rules for the disclosure of confidential supervisory information (CSI), which is supervisory information belonging to the Board that may include proprietary financial institution-specific information. Some of these changes include updating definitions for expedited processing and the different categories of requesters. The final rule updates the Board's FOIA regulation to be consistent with the Board's current practices and to incorporate recent changes in law and guidance.

Office of the Comptroller of the Currency Issues Proposed True Lender Rule: On Monday, the OCC proposed a rule that would determine when a national bank or federal savings association (bank) makes a loan and is the “true lender” in the context of a partnership between a bank and a third party. The proposed rule would resolve uncertainty by specifying that a bank makes a loan and is the “true lender” if, as of the date of origination, it (1) is named as the lender in the loan agreement or (2) funds the loan.

OCC Clarifies Federally Chartered Banks and Thrifts May Provide Custody Services for Crypto Assets: On Wednesday, the OCC published a letter clarifying national banks' and federal savings associations' authority to provide cryptocurrency custody services for customers. The OCC concluded that providing cryptocurrency custody services, including holding unique cryptographic keys associated with cryptocurrency, is a modern form of traditional bank activities related to custody services. Crypto custody services may extend beyond passively holding "keys." "From safe-deposit boxes to virtual vaults, we must ensure banks can meet the financial services needs of their customers," said Acting Comptroller of the Currency Brian Brooks. "This opinion clarifies that banks can continue satisfying their customers' needs for safeguarding their most valuable assets, which today, for tens of millions of Americans includes cryptocurrency."

HUD Terminates 2015 AFFH Rule: On Thursday, HUD Secretary Ben Carson announced the Department will ultimately terminate the Obama Administration’s Affirmatively Furthering Fair Housing (AFFH) regulation issued in 2015. Carson described the rule as “unworkable and ultimately a waste of time for localities to comply with.” Sen. Sherrod Brown (D-OH) slammed the move, saying it was “a dark day for the country” and urging Secretary Caron to reinstate the AFFH.

CFTC Approves Final Cross-Border Swaps Rule and an Exempt SEF Amendment Order at July 23 Open Meeting: On Thursday, the CFTC approved a final rule on the cross-border application of certain swap provisions under the Commodity Exchange Act (CEA). On a 3-2 vote, the Commission adopted a final rule that addresses the cross-border application of the swap dealer (SD) and major swap participant (MSP) registration thresholds and certain requirements applicable to SDs and MSPs; establishes a formal process for requesting comparability determinations for the requirements from the CFTC; and defines key terms for the purpose of applying the CEA’s swaps provisions to cross-border transactions. Additionally, the Commission unanimously approved an amended order that: (i) exempted sixteen additional multilateral trading facilities (MTFs) and organized trading facilities (OTFs) authorized within the European Union from the requirement to register as swap execution facilities; and (ii) clarified the application of the existing order to United Kingdom (UK) based MTFs and OTFs during the UK’s Brexit transition period. In conjunction with the Commission’s approval of the final cross-border rule, the Divisions of Swap Dealer and Intermediary Oversight (DSIO), Clearing and Risk (DCR), and Market Oversight (DMO) withdrew a staff advisory and no-action relief regarding certain cross-border situations and issued new no-action relief.

FDIC Seeks Input on Voluntary Certification Program to Promote New Technologies: On Monday, the FDIC announced that it is seeking the public's input on the potential for a public/private standard-setting partnership and voluntary certification program to promote the efficient and effective adoption of innovative technologies at FDIC-supervised financial institutions. “Fostering innovation in the financial sector is a top priority for the FDIC,” said Chairman Jelena McWilliams. “We have to remove unnecessary regulatory impediments that banks must overcome when developing or deploying new technologies.”

FDIC Minority Depository Institutions Subcommittee to Meet: On Friday, the FDIC announced the agency’s Minority Depository Institutions (MDIs) Subcommittee to the Advisory Committee on Community Banking will meet virtually on Monday, July 27. During the public portion of the meeting, the Subcommittee members will share insights into key challenges and opportunities facing their communities and financial institutions. Following the public meeting, Subcommittee members will provide feedback on the FDIC’s strategies to preserve and promote MDIs, and on recent private sector commitments and engagement to leverage the work of MDIs in their communities, in preparation for presenting its findings to the Advisory Committee on Community Banking.

FDIC Issues Final Rule Revising and Codifying Section 19 to Allow Greater Employment Opportunities for Individuals with Certain Minor Criminal Offenses on Their Records: On Friday, the FDIC approved a final rule to revise and incorporate into the FDIC’s regulations a longstanding Statement of Policy (SOP) related to individuals with certain criminal offenses on their records who seek employment in the banking industry. Based on filings over the past several years, the FDIC expects that the revisions in the final rule will reduce applications required under Section 19 by 30 percent.

CFPB to Host Symposium July 29: On Wednesday, the CFPB announced that it will hold a symposium on the use of cost-benefit analysis in consumer financial protection regulation on July 29 at 9:30 a.m. The first panel will consider questions related to how the Bureau should use cost-benefit analysis in developing consumer financial regulations and whether the Bureau’s practices provide the proper incentives for the best use and reporting of cost-benefit analysis. The second panel will focus on how the Bureau may help advance the methodology of cost-benefit analysis for consumer financial regulation.

CFPB Announces Plan to Issue ANPR on Consumer-Authorized Access to Financial Data: On Friday, the CFPB announced that it plans to issue an advance notice of proposed rulemaking (ANPR) later this year on consumer-authorized access to financial records. The announcement follows a symposium the Bureau held earlier this year on the topic, which included experts from consumer groups, fintechs, trade associations, financial institutions, and data aggregators.


Freddie Mac Multifamily Names Ling Xu Vice President of Multifamily Investments and Portfolio Management: On Monday, Freddie Mac announced that Ling Xu has been named vice president of Multifamily Investments & Portfolio Management. Xu first joined Freddie Mac in 2002 and served most recently as senior director of Multifamily Portfolio Strategy & Execution.

FDIC Names Five New Members to Its Systemic Resolution Advisory Committee: On Thursday, the FDIC named five new members to its Systemic Resolution Advisory Committee (SRAC), which was created by the Board of Directors in 2011 to provide the agency with advice and recommendations on a broad range of issues regarding the resolution of systemically important financial companies. The five new members of the SRAC are: Ben Bernanke, Gary Cohn, Robert Drain, Timothy Mayopoulos, and Sandie O’Connor.

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