This Week in Washington for October 1, 2018
By Dina Ellis
THE BIG PICTURE
In a dramatic and at times emotional hearing, the Senate Judiciary Committee heard the testimony of both Dr. Christine Blasey Ford and Brett Kavanaugh on Thursday. Following the hearing, Republicans seemed set to move forward with bringing Kavanaugh’s nomination to the floor for a vote. On Friday, the Committee voted 11-10 along partisan lines to advance Mr. Kavanaugh for a full Senate vote. Despite his vote in committee, retiring Senator Jeff Flake (R-AZ), threw a wrench in the process by adding the caveat that he would only feel comfortable moving forward following a limited one-week FBI investigation into the accusation. Without the assurance of his and other key swing votes, such as Senators Susan Collins (R-ME) and Lisa Murkowski (R-AK), the President had no choice but to order the FBI to conduct a supplemental investigation on the “current credible allegations” by October 5th.
On Friday, in a quiet ceremony that was closed to the press, the President averted a government shutdown by signing a US$855B spending package into law which funds the Departments of Defense, Labor, Health and Human Services, and Education, and includes a stopgap continuing resolution that extends funding for several other departments into early December. In a blow to the President’s priorities, the package did not contain funding for a border wall.
The President delayed his planned Thursday meeting with Deputy Attorney General Rod Rosenstein, citing the need to focus on the Senate Judiciary Committee hearing. Rumors have continued to swirl that Mr. Rosenstein will either resign or be fired following the publication of claims that he had floated the possibility of wearing a wire around the President, and had discussed getting members of the Cabinet to invoke the 25th amendment.
Other highlights of last week include:
The Federal Reserve raised interest rates on Wednesday for the third time this year. Following the announcement, Fed Chair Jerome Powell said that “these rates remain low, and my colleagues and I believe that this gradual returning to normal is helping to sustain this strong economy.”
The House voted 220-191 to pass H.R. 6760, a bill that would make permanent the tax cuts for individuals and pass-through businesses included in last year’s sweeping tax overhaul. The cuts are currently set to expire at the end of 2025.
The House of Representatives adjourned Friday, adding two weeks to the already planned month-long recess through the November midterms. The additional time will give vulnerable House Republicans more time to campaign amid what some fear is shaping up to be a wave election.
LAST WEEK ON THE HILL
Roundtable on “Legislating Certainty for Cryptocurrencies”: On Tuesday, Rep. Warren Davidson (R-OH) hosted a bipartisan roundtable to receive input from industry experts and stakeholders on Congress’ effort to clarify regulatory framework in the cryptocurrency space. Rep. Davidson announced that he plans to “introduce[e] a bill that will pre-empt a heavy-handed regulatory approach that could stall innovation and kill the U.S. ICO market.”
HOUSE FINANCIAL SERVICES COMMITTEE
Hearing entitled “
The Honorable Mike Bost, U.S. House of Representatives
The Honorable Tammy Duckworth, U.S. Senate
Mr. Jeremy Kirkland, Acting Deputy Inspector General, Office of Inspector General, U.S. Department of Housing and Urban Development
Hearing entitled “
Ms. Dalia Blass, Director, Division of Investment Management, U.S. Securities and Exchange Commission
Hearing entitled “
The Honorable Marshall Billingslea, Assistant Secretary for Terrorist Financing, U.S. Department of the Treasury
Hearing entitled “
Ms. Simone Grimes
The Honorable Laura Wertheimer, Inspector General, Federal Housing Finance Agency
The Honorable Melvin Watt, Director, Federal Housing Finance Agency
Mr. Timothy Mayopoulos, Chief Executive Officer, Federal National Mortgage Corporation
Mr. Donald Layton, Chief Executive Officer, Federal Home Loan Mortgage Corporation
Hearing entitled “
Mr. Aaron Cutler, Partner, Hogan Lovells LLP
Mr. Dion Harrison, Director, Elevate
Mr. T. Michael Price, President and Chief Financial Officer, First Commonwealth Financial Corporation, on behalf of the Pennsylvania Bankers Association
Mr. Scott B. Astrada, Director of Federal Advocacy, Center for Responsible Lending
Mr. Stuart Rubinstein, President, Fidelity Wealth Technologies
SENATE BANKING COMMITTEE
No hearings held.
ON THE FLOOR
House Passes 8 Financial Services Bills: The House passed the following financial services bills, nearly all by voice vote:
H.R. 754, the “Anwar Sadat Centennial Celebration Act,” sponsored by Representative Chris Stewart (R-UT) passed by voice vote.
H.R. 3834, the “9/11 Heroes Medal of Valor Act of 2017,” sponsored by Representative Joseph Crowley (D-NY) passed by voice vote.
H.R. 4753, the “Federal Reserve Supervision Testimony Clarification Act,” sponsored by Representative Frank Lucas (R-OK) passed by voice vote.
H.R. 5036, the “Financial Technology Protection Act,” sponsored by Representative Ted Budd (R-NC) passed by voice vote.
H.R. 6332, the “Improving Strategies to Counter Weapons Proliferation Act,” sponsored by Representative Scott Tipton (R-CO) passed by voice vote.
H.R. 6729, the “Empowering Financial Institutions to Fight Human Trafficking Act of 2018,” sponsored by Representative Ann Wagner (R-MO) passed 297-124.
H.R. 6737, the “Protect Affordable Mortgages for Veterans Act of 2018,” sponsored by Representative Lee Zeldin (R-NY) passed by voice vote.
H.R. 6751, the “Banking Transparency for Sanctioned Persons Act of 2018,” sponsored by Representative Mia Love (R-UT) passed by voice vote.
THIS WEEK ON THE HILL
Tuesday, October 2
Senate Banking Committee Hearing on “
Thursday, October 4
Senate Banking Committee Hearing on “
SEC Proposes Amendments to Codify Exemption to Credit Rating Agency Rule: The SEC announced that it has voted to propose rule amendments to codify an existing temporary exemption for credit rating agencies registered with the Commission as nationally recognized statistical rating organizations (NRSROs). The amendments proposed by the Commission would codify the existing temporary exemption to Rule 17g-5(a)(3) and clarify the exemption’s conditions. The proposed amendments would also clarify the conditions applicable to similar exemptions in Exchange Act Rules 17g-7(a) and 15Ga-2 so that the approach among these exemptions remains consistent.
SEC Staff to Host Roundtable on Market Data and Market Access: The SEC announced that its Division of Trading and Markets will host a two-day roundtable on October 25 and 26 on market data and market access. The first day will focus on assessing current market data products, market access services, and their associated fees, while the second will focus on assessing potential steps to improve market data products and market access services.
Federal Reserve Chair Discusses Community Reinvestment Act: Speaking at his quarterly press conference, Federal Reserve Chairman Jerome Powell noted that the bank is “very much interested” in an effort to update Community Reinvestment Act regulations. Despite that he emphasized that the fundamentals of the law must remain intact, saying “we are deeply committed to the mission of CRA” adding, “we definitely want to see that fundamental purpose of the law sustained.”
Federal Reserve’s FOMC Holds Meeting: Following a two-day meeting of the FOMC, the Committee released a statement announcing that they expect that further gradual increases in the target range for the federal funds rate will be consistent with sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee’s symmetric 2 percent objective over the medium term. They noted that risks to the economic outlook appear roughly balanced. They also announced that in view of realized and expected labor market conditions and inflation, they had decided to raise the target range for the federal funds rate to 2 to 2-1/4 percent.
CFTC Announces Agenda for FinTech Forward 2018 Conference: The CFTC announced the agenda for FinTech Forward 2018: Innovation, Regulation and Education, the two-day conference to be held on October 3 and 4 in Washington, D.C. The conference is a collaboration of CFTC’s LabCFTC and the Office of Customer Education and Outreach (OCEO) that will bring together innovators, market participants, thought-leaders from industry, academia and regulatory authorities, as well as the general public to examine the wide range of fintech developments impacting markets, including crypto assets, machine learning, cloud technologies, regtech and other emerging financial technologies.
CFPB Holds Meeting with New Advisory Committee Members: On Thursday, the CFPB began meetings in Washington, D.C. with members of its revamped Consumer Advisory Board, Community Bank Advisory Council, and Credit Union Advisory Council. The Committees will advise Bureau leadership on a broad range of consumer financial issues and emerging market trends.
CFPB Releases Report on Data Collection: On Tuesday, the CFPB issued a 199 page report detailing their data collection practices, including the ways the Bureau collects, manages and protects data. The Bureau also published a request for information seeking comments and information from interested parties to assist the Bureau in assessing the overall efficiency and effectiveness of its Data Collections in support of the Bureau’s work and, consistent with law, the Bureau is considering whether any changes to its Data Collection processes would be appropriate.
Senator Brown Calls for the Firing of CFPB Political Appointee: On Friday, Sen. Sherrod Brown (D-OH) called for the firing of Eric Blankenstein, who serves as an associate director overseeing supervision, enforcement and fair lending, over controversial old blog posts. The posts in question, among other things, seemed to suggest that many hate crimes are hoaxes. Sen. Brown said that the “posts are hateful, reprehensible and disgusting. Placing Blankenstein in charge of fair lending was a serious moral and managerial failure, and he must go. . . . There can be no place at the agency for people who don’t believe discrimination is real or a serious problem.”
COMINGS AND GOINGS AT THE AGENCIES
Christine Wilson Sworn-in at FTC: On Wednesday, Christine Wilson was sworn-in at the FTC, filling a Republican seat that was vacated by Maureen Ohlhausen. Her term extends through September 25, 2025. Ms. Wilson was nominated in January, and approved in April, but was unable to be sworn in until Ms. Ohlhausen’s term expired.
Lacey Dingman, Chief Human Capital Officer and Director of Human Resources, to Leave SEC: On Thursday, the SEC announced that Lacey Dingman, the Chief Human Capital Officer (CHCO) and Director of the Office of Human Resources (OHR), will leave the agency at the end of September. With Ms. Dingman’s departure, James “Jamey” McNamara will serve as the Acting Chief Human Capital Officer.
Federal Judge Rules Virtual Money a Commodity under Jurisdiction of CFTC: U.S. District Judge Rya W. Zobel of Massachusetts sided with the CFTC on Wednesday, allowing them to pursue allegations of fraud against the founder of My Big Coin Inc., ruling that “My Big Coin and Bitcoin are sufficiently related so as to justify this categorical treatment,” adding that the “scant caselaw on this issue” supported the CFTC’s position that it can regulate virtual currencies.
OTHER NOTEWORTHY ITEMS
Congresswoman Waters Calls on World Bank to Discontinue Support for the Government of Myanmar: Congresswoman Maxine Waters (D-CA), Ranking Member of the House Committee on Financial Services, sent a letter to Dr. Jim Yong Kim, President of the World Bank Group, expressing concerns about the World Bank’s ongoing support for the government of Myanmar. Her concerns were prompted by the recently released UN Independent International Fact-Finding Mission on Myanmar report which detailed horrific acts of ethnic cleansing and genocide against the Rohingya population.