Money Matters: This Week in Washington
This Week in Washington for November 13, 2017
By Dina Ellis and Casey Miller
THE BIG PICTURE
Democrats won the Governorships in both Virginia and New Jersey in last week's election, with many saying that the elections were a referendum on President Donald Trump. Speaker of the House Paul Ryan said in response to the elections that it emphasizes the need for Republicans to keep their promises with respect to tax reform. The Senate is planning to mark up their tax bill today.
In honor of Veteran's day, the House passed seven bills to support Veterans. Measures passed included:
- H.R. 918, Veteran Urgent Access to Mental Healthcare Act
- H.R. 1133, Veterans Transplant Coverage Act
- H.R. 1900, National Veterans Memorial and Museum Act
- H.R. 2123, Veterans E-Health and Telemedicine Support (VETS) Act
- H.R. 2601, Veterans Increased Choice for Transplanted Organs and Recovery (VICTOR) Act
- H.R. 3634, Securing Electronic Records for Veterans Ease (SERVE) Act
- H.R. 3949, Veterans Apprenticeship and Labor Opportunity Reform (VALOR) Act
Representative Bob Goodlatte (R-VA) announced last week that he will retire from Congress next year. The longtime Congressman currently serves as Chairman of the House Judiciary Committee. Additionally, GOP Representative Frank LoBiondo (R-NJ) announced that he also will not seek reelection next year.
LAST WEEK ON THE HILL
HOUSE FINANCIAL SERVICES COMMITTEE
Changes to Committee's Flood Insurance Overhaul Bill: House Financial Services Committee Chairman Jeb Hensarling (R-TX) is planning to remove two major provisions of the Committee's
The House Rules Committee is planning to resume consideration of the bill today. House Financial Services Ranking Member Maxine Waters (D-CA) and other coastal members have been speaking out in opposition to the bill, saying that the bill would make flood insurance "more expensive, less available and less fair for millions of Americans."
House Passes Micro Offering Safe Harbor Act: On November 9, the House passed the Micro Offering Safe Harbor Act. Under H.R. 2201, sponsored by Rep. Tom Emmer (R-MN), private businesses would be permitted to seek community-based financing of up to $500,000 per year to hire new workers or expand their operations. The bill includes a number of investor protections to help prevent fraud and abuse. “This important bill will help unlock seed capital for small businesses and startup companies,” said Financial Services Committee Chairman Jeb Hensarling (R-TX). Ranking Member Maxine Waters (D-CA) spoke against the bill, saying it would "create an unnecessary and potentially dangerous loophole in federal and state securities laws." Ranking Member Water's opposition will make it harder for the bill to pass the Senate.
- Dr. Mickey Levy, Managing Director and Chief Economist, Berenberg Capital Markets
- Dr. Andrew T. Levin, Professor of Economics, Dartmouth College
- Dr. Jered Bernstein, Senior Fellow, Center on Budget and Policy Priorities
- Dr. Charles I. Plosser, Visiting Fellow, Hoover Institution
- Mr. Peter Wallison, Senior Fellow and Arthur F. Burns Fellow in Financial Policy Studies, AEI
- Dr. Mark Zandi, Chief Economist, Moody's Analytics
- Dr. Michael Lea,Cardiff Consulting Services
- Ms. Alanna McCargo, Co-director, Housing Finance Policy Center, Urban Institute
- The Honorable Theodore "Ted" Tozer, Senior Fellow, Center for Financial Markets, Milken Institute
SENATE BANKING COMMITTEE
Senate Banking Committee Chairman Mike Crapo (R-ID) Meets with Federal Reserve Chair Nominee Jerome Powell: Chairman Crapo met with Jay Powell, President Trump’s nominee for Chairman of the Board of Governors of the Federal Reserve System, on November 8. Following the meeting, Senator Crapo issued the following statement: “Governor Powell and I had a positive meeting today. We discussed his views on monetary policy, tailoring federal financial regulation and other priorities for the Federal Reserve. He is well-equipped to lead our economy and the country in a positive direction, and I look forward to hearing more from him during his nomination hearing.”
The Committee will hold a hearing on Jerome Powell's nomination at 10:00AM on November 28.
LEGISLATION INTRODUCED AND PROPOSED
THIS WEEK ON THE HILL
Tuesday, November 14
House Financial Services Committee,
- HR 1153, the “Mortgage Choice Act of 2017”
- HR 1638, the “Iranian Leadership Asset Transparency Act”
- An Amendment in the Nature of a Substitute expected to be offered by Mr. Poliquinis being distributed with this notice. Members wishing to offer amendments are counseled to do so with reference to this text.
- HR 3093, the “Investor Clarity and Bank Parity Act”
- HR 3221, the “Securing Access to Affordable Mortgages Act”
- HR 3299, the “Protecting Consumers’ Access to Credit Act of 2017”
- HR 3978, the “TRID Improvement Act of 2017”
- HR 4015, the “Corporate Governance Reform and Transparency Act of 2017”
- HR 4247, the “Restoring Financial Market Freedom Act of 2017”
- HR 4248, To amend the Securities Exchange Act of 1934 to repeal certain disclosure requirements related to conflict minerals, and for other purposes.
- HR 4258, the “Family Self-Sufficiency Act”
- HR 4263, the “Regulation A+ Improvement Act of 2017”
- HR 4267, the “Small Business Credit Availability Act”
- HR 4270, the “Monetary Policy Transparency and Accountability Act of 2017”
- HR 4278, the “Independence from Credit Policy Act of 2017”
- HR 4279, the “Expanding Investment Opportunities Act”
- HR 4281, the “Expanding Access to Capital for Rural Job Creators Act”
- HR 4289, To amend the Dodd-Frank Wall Street Reform and Consumer Protection Act to repeal certain disclosure requirements related to coal and mine safety.
- HR 4292, the “Financial Institution Living Will Improvement Act of 2017”
- HR 4293, the “Stress Test Improvement Act of 2017”
- HR 4294, the Prevention of Private Information Dissemination Act of 2017”
- HR 4296, To place requirements on operational risk capital requirements for banking organizations established by an appropriate Federal banking agency.
- HR 4302, the “Congressional Accountability for Emergency Lending Programs Act of 2017”
- HR 4324, the “Strengthening Oversight of Iran’s Access to Finance Act”
FINANCIAL SERVICES ON THE HOUSE FLOOR
- H.R. 3973- Market Data Protection Act of 2017, as amended (Sponsored by Rep. Warren Davidson / Financial Services Committee)
Securities and Exchange Commission Plans to Continue to Pursue Punitive Penalties: According to an agency official, the SEC is still planning to pursue punitive penalties for companies that settle enforcement charges. According to Stephanie Avakian, co-director of the SEC's enforcement division, "there is no plan to reduce corporate penalties."
SEC Chairman Clayton Raises Concerns about Virtual Currency Offerings: Speaking at the Practicing Law Institute in New York, Chairman Clayton expressed concern for the potential for misconduct with cryptocurrency. According to Clayton, there is a "distinct lack of information about many online platforms that list and trade virtual coins or tokens offered and sold in Initial Coin Offerings…Trading of tokens on these platforms appears to be susceptible to price manipulation and other fraudulent trading practices."
SEC Announces the Formation and First Members of Fixed Income Market Structure Advisory Committee: On November 9, the SEC announced the formation and first members of its Fixed Income Market Structure Advisory Committee. The committee, whose initial focus will be on the corporate bond and municipal securities markets, will provide advice to the Commission on the efficiency and resiliency of these markets and identify opportunities for regulatory improvements. The committee is comprised of a group of outside experts, including individuals representing the views of retail and institutional investors, small and large issuers, trading venues, dealers, and self-regulatory organizations, among others.
Former SEC Head says Budget Cuts will Hurt Enforcement: Speaking in New York on November 10, former SEC Chair Mary Jo White said that the "greatest impact on enforcement of the securities laws will be brought about by budget cuts [at the SEC and the Justice Department]." House Republicans and the White House are proposing to maintain the SEC's budget at its current level, while the White House has proposed a four percent cut to the Justice Department budget. In July, the House Appropriations Committee passed a US$349M budget increase for the Department.
Acting Comptroller Noreika also said at the same event that agencies could put out a proposal to reform the Volcker Rule by next spring.
COMINGS AND GOINGS AT THE AGENCIES
Federal Reserve Bank of New York President to Retire Next Year: Federal Reserve Bank of New York Chairman William Dudley plans to retire in the middle of next year. In a statement released November 6, the New York Fed said that it will "ensure that a successor is in place well before the end of his term." Speaking at the Economic Club in New York, Dudley said that there is "still work left to do" on post-crisis regulation.
Office of Financial Research Director to Step Down Early: Department of Treasury Secretary Steven Mnuchin announced last week that Richard Berner, the Director of the Office of Financial Research, will step down effective December 31. This is one year before his six-year term is up.
OTHER NOTEWORTHY ITEMS
Puerto Rico Bondholders Offer US$1.5B Loan to Oversight Board and Commonwealth Government: Investors in the class of Puerto Rican bonds known as COFINA (Spanish acronym) have offered a zero-interest loan to Puerto Rico's oversight board and commonwealth government. A source familiar with the strategy said that the quicker Puerto Rico can get back on its feet, the quicker the bondholders can get repaid.
Bank CEOs Ask for More Risk-Based Approach to Regulation: As Congress works on legislation aimed to ease financial regulations, several bank CEOs urged lawmakers to impose stricter regulation based on business model, rather than simply raising the asset threshold. Speaking at the Clearing House's annual conference, U.S. Bancorp CEO Andy Cecere said that they are "very focused on this because the rules ought to be risk-based as opposed to a simple asset number."