Money Matters: This Week in Washington
This Week in Washington for November 20, 2017
By Dina Ellis and Casey Miller
THE BIG PICTURE
On November 16, the House passed a US$5.5T tax bill, which represents a major step toward achieving tax reform. Not a single Democrat voted for the bill, and 13 Republicans voted against it. The legislation slashes the corporate tax rate to 20 percent and sets the pass-through rate used by many small businesses to 25 percent. Department of the Treasury Secretary Steven Mnuchin said of the bill's passage: "We are committed to work with Congress to provide a simpler and fairer tax system that will lead to better jobs for American workers and higher economic growth. I congratulate the House on today's vote. I look forward to continuing to work with the Senate to pass a pro-growth bill as well." The Senate Finance Committee marked up its own tax reform bill last week.
The Senate is planning to release four FY2018 spending bills next week: Defense, Financial Services, Homeland Security, and Interior and Environment. The Senate will not be in session but staff will be working on the legislation. There is a looming budget deadline of December 8, when current government funding will expire. House Speaker Paul Ryan said that Congress may pass a short-term continuation measure to prevent the government from shutting down.
The White House sent a third disaster request to Congress, asking for US$44B for recovery from the three deadly hurricanes this summer. If approved, Congress will have appropriated almost US$100B in extra funds for hurricane relief. Democrats criticized the funding request, saying that it is not enough for relief in Puerto Rico.
A mistrial was declared in the corruption case of Senator Robert Menendez (D-NJ) after jurors claimed that they were hopelessly deadlocked.
Charges of sexual harassment and assault continue to surface, with a woman claiming that Senator Al Franken (D-MN) kissed and groped her without her consent in 2006. It is unclear at this time whether Senator Franken will resign. Former President George H.W. Bush is also facing allegations, with a woman saying that he touched her inappropriately when he was in office in 1992. Following allegations regarding Senate candidate Roy Moore (R-AL), National Republican Senatorial Committee Chairman Sen. Cory Gardner (R-CO) said last week that the Senate should vote to expel Moore if he wins.
LAST WEEK ON THE HILL
House Passes Flood Insurance Reauthorization: The House passed legislation on November 14 reauthorizing the National Flood Insurance Program (NFIP), despite bipartisan opposition to the legislation. The bill was championed by House Financial Services Chairman Jeb Hensarling (R-TX) and reauthorizes the program for five years. Lawmakers from coastal districts urged their colleagues to vote against the bill, saying that it would make flood insurance less affordable for their constituents.
HOUSE FINANCIAL SERVICES COMMITTEE
The bills passed through the Committee include:
- 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”
LEGISLATION INTRODUCED AND PROPOSED
Consumer Financial Protection Bureau (CFPB) Director Announces Resignation: Last week, CFPB Director Richard Cordray announced that he will step down this month. Financial Services Committee Ranking Member Maxine Waters thanked Cordray for his service, calling him a "true champion for American consumers." Senate Banking Committee Ranking Member Sherrod Brown (D-OH) said that Americans "owe him a debt of gratitude" for the money that was returned to consumers who were victims of predatory lending schemes. House Financial Services Chairman Jeb Hensarling said that they are "long overdue" for new leadership at the CFPB.
President Trump is expected to name current Office of Management and Budget head Mick Mulvaney as interim CFPB Director.
Department of the Treasury Secretary Speaks up on Cryptocurrency: Speaking in an interview last week, Treasury Secretary Steven Mnuchin said that the Department has established cryptocurrency working groups. He said that "It is something we are looking at very carefully and will continue to look at… The first issue and the most important issue is to make sure that people can't use bitcoin for illicit activities. So we want to make sure that you don't have the dark web funded in bitcoins. And that's something that is a concern of ours today."
Securities and Exchange Commission (SEC) Penalties Fall Under Chairman Jay Clayton: According to a study completed by Georgetown University law professor Urska Velikonja, the SEC tried to obtain US$3.4B in fines and disgorgement in the 12 months ending this September, the lowest total amount since 2013. Also, the number of enforcement cases fell to the lowest in four years, with 612 total.
SEC Gets Preliminary Injunction in Initial Coin Offering Suit: A federal judge in New York entered a preliminary injunction last week freezing the assets of Maksim Zaslafskiy, whom the SEC has accused of defrauding investors through initial coin offerings purportedly backed by real estate and diamonds.
Federal Deposit Insurance Corporation (FDIC) Chairman to Stay Until Replaced: Speaking at an event hosted by the Brookings Institution, FDIC Chairman Martin Gruenberg said that he will stay on until someone is confirmed to succeed him. Right now, his term is set to expire on November 29. Gruenberg also spoke at the event about risks to the economy and warned against complacency in the financial system.
Public Company Accounting Oversight Board Slashes Budget: The PCOAB unanimously voted for a budget of US$259.9M, a 3.2 percent budget cut from FY2017. The budget must now be approved by the SEC.
COMINGS AND GOINGS AT THE AGENCIES
Senate Votes to Confirm Joseph Otting as Comptroller of the Currency: The Senate voted last week to confirm President Trump's nominee for Comptroller of the Currency, Joseph Otting. The vote was 54-43, with two Democrats voting in favor. Following the confirmation, Acting Comptroller Keith Noreika submitted his resignation, which will be effective one day after Otting takes office.