This Week in Washington for October 30, 2017
By Dina Ellis and Casey Miller
THE BIG PICTURE
The Senate remains busy with much left on the to-do list, including confirmations, tax reform, and a final FY2018 budget. Senate Majority Leader Mitch McConnell (R-KY) told Senators to prepare to work right into the Thanksgiving break.
The House voted on October 26 to clear the Senate's budget resolution. Though not as conservative as the plan the House advanced earlier this month, the House had no problem clearing the chamber, but with some opposition. Twenty House Republicans voted against the budget, including 11 Members from New Jersey and New York primarily due to the fear that the budget is predicated on elimination of the State and Local Tax deduction. With passage of the resolution, Congress has procedurally unlocked a mechanism that will allow the GOP to advance a tax overhaul with only a simple majority in the Senate.
Senator Jeff Flake (R-AZ) announced that he will not be seeking reelection in 2018. Accompanying his announcement was a scathing rebuke of President Trump, saying among other things, "We must never regard as 'normal' the regular and casual undermining of our democratic norms and ideals. We must never meekly accept the daily sundering of our country — the personal attacks, the threats against principles, freedoms, and institutions; the flagrant disregard for truth or decency, the reckless provocations, most often for the pettiest and most personal reasons, reasons having nothing whatsoever to do with the fortunes of the people that we have all been elected to serve."
President Trump declared a national health emergency last week related to the nation's opioid addiction epidemic, calling it the "worst drug crisis" in U.S. history. In his speech, he spoke of his own brother's issues with alcohol and explained that he has never had a drink. He said that his administration will launch an advertising campaign "to get people, especially children, not to want to take drugs in the first place." Such approach echoes Nancy Reagan's "Just Say No" campaign, an attempt to combat drug addiction in the 1980s and early 1990s as part of the War on Drugs. Studies performed on "Just Say No" advertising have found that it is not an effective method for discouraging illegal drug use.
The Senate passed a second infusion of disaster aid, legislation which passed the House earlier this month.
LAST WEEK ON THE HILL
House Approves Bipartisan Financial Services Bills: On October 24, the House on Tuesday passed two financial services bills with bipartisan support.
Ways and Means Committee Chairman Says Changes to 401(k) Still in Play: House Ways and Means Committee Chairman Kevin Brady (R-TX), the head Republican in the House responsible for drafting a tax overhaul, said on October 25 that changes to how retirement plans are taxed are still in play, including raising limits. His comments follow a tweet from President Trump that there would be no changes to 401(k)s.
The House Ways and Means Committee and Republican leadership have been working behind the scenes to ensure that their tax reform effort does not face the same fate as the Obamacare repeal. House Republican Conference Chairwoman Cathy McMorris Rodgers (R-WA) called the bill the "ultimate must-pass legislation for House Republicans." The bill is expected to be introduced on November 1, 2017.
Senate Votes to Repeal Consumer Financial Protection Bureau's Mandatory Arbitration Rule: On October 24, the Senate voted to repeal the CFPB's rule that prohibits mandatory arbitration in financial product contracts. In a floor statement the day of the vote, Senate Banking Ranking Member Sherrod Brown (D-OH) spoke against the repeal legislation and said that "forced arbitration takes power away from ordinary people, and gives it to big banks and Wall Street companies that already have an unfair advantage."
On October 23, the Treasury Department released a
Senator Elizabeth Warren (D-MA) Takes Aim at Federal Housing Administration Nominee: Senator Warren said last week that she would vote against Brian Montgomery, President Trump's pick to lead the Federal Housing Administration. Warren cited his past work for mortgage lenders as the reason for her opposition.
HOUSE FINANCIAL SERVICES COMMITTEE
- Mr. Paul Ehlert, President of Germania Insurance and Chairman of the National Association of Mutual Insurance Companies
- Professor Daniel Schwarcz, Professor of Law, University of Minnesota Law School
- Mr. Rick Means, President and Chief Executive Officer, Shelter Insurance Companies
- Ms. Katharine Wade, Commissioner, Connecticut Insurance Department, on behalf of the National Association of Insurance Commissioners
- Ms. Brenda K. Hughes, Senior Vice President, First Federal Savings, on behalf of the American Bankers Association (ABA)
- Mr. Samuel A. Vallandingham, President and CEO, First State Bank, on behalf of the Independent Community Bankers of America (ICBA)
- Ms. Nikitra Bailey, Executive Vice President, Center for Responsible Lending
- Mr. Kevin Chavers, Managing Director, BlackRock, on behalf of the Securities Industry and Financial Markets Association (SIFMA)
- Mr. Richard Stafford, President and CEO, Tower Federal Credit Union, on behalf of the National Association of Federally-Insured Credit Unions (NAFCU)
- Ms. Sara Cable, Director, Data Privacy and Security, Assistant Attorney General, Consumer Protection Division, Office of Attorney General, Commonwealth of Massachusetts
- Mr. Mike Litt, Consumer Advocate, U.S. Public Interest Research Group
- Ms. Kathleen McGee, Chief, Bureau of Internet and Technology, Division of Economic Justice, Office of the New York State Attorney General
- Ms. Laura M. Moy, Deputy Director, Center on Privacy and Technology, Georgetown University Law Center
- Ms. Chi Chi Wu, Staff Attorney, National Consumer Law Center
SENATE BANKING COMMITTEE
LEGISLATION INTRODUCED AND PROPOSED
THIS WEEK ON THE HILL
Wednesday, November 1
Senate Banking Committee,
The Honorable Scott Garrett, to be President of the Export-Import Bank;
Ms. Kimberly A. Reed, to be First Vice President of the Export-Import Bank;
The Honorable Spencer Bachus III, to be a Member of the Board of Directors of the Export-Import Bank;
Ms. Judith Delzoppo Pryor, to be a Member of the Board of Directors of the Export-Import Bank;
Ms. Claudia Slacik, to be a Member of the Board of Directors of the Export-Import Bank;
Mr. Mark L. Greenblatt, to be Inspector General of the Export-Import Bank.
House Financial Services Oversight and Investigations Subcommittee, Hearing, “
Ms. Helen Albert, Acting Inspector General, Office of the Inspector General, U.S. Department of Housing and Urban Development
House Energy and Commerce Committee, Hearing, "
House Financial Services Subcommittee on Financial Institutions and Consumer Credit, Hearing, “
Mr. Kenneth Bentsen, Jr., President and Chief Executive Officer, Securities Industry and Financial Markets Association
Mr. Daniel Mennenoh ITP NTP, President, H.B. Wilkinson Title Company, on behalf of the American Land Title Association
Ms. Debra Schwartz, President and Chief Executive Officer, Mission Federal Credit Union, on behalf of the National Association of Federally-Insured Credit Unions
Thursday, November 2
House Financial Services Subcommittee on Housing and Insurance, Hearing, “
Friday, November 3
House Financial Services Subcommittee on Capital Markets, Securities, and Investment, Hearing, “
Decision on Federal Reserve Chair "Very, Very Close": President Trump said on October 23 that he is "very, very close" to picking the next Chair of the Federal Reserve. Conservatives have been pushing the President toward John Taylor or Kevin Warsh, saying that current Fed Governor Jerome Powell didn't do enough to slow down bank regulations pushed by former Fed Governor Daniel Tarullo. A coalition of 22 progressive groups sent a letter to Senate Banking Committee Chairman Mike Crapo (R-ID) and Ranking Member Sherrod Brown (D-OH) opposing the potential nominations of John Taylor, Kevin Warsh, and Marvin Goodfried.
President Trump asked Fox Business host Lou Dobbs for his advice on who the President should pick for Fed Chair, saying that he only wants to hear from “people [he] respect[s].” Dobbs told the President that current Fed Chair Janet Yellen may be worth keeping.
SEC Reaches Unanimous Decision on Landmark Accounting Disclosure Rule: On October 23, the SEC unanimously approved a decision by the Public Company Accounting Oversight Board (PCAOB) to provide more information to investors regarding a company's financial health. The U.S. Chamber of Commerce urged the SEC to reject the decision, and other businesses opposed the rule change. Asset managers generally supported the new rule.
SEC and Commodity Futures Trading Commission (CFTC) Form Task Force to Address Overlap: The CFTC and the SEC have formed a "chairman-to-chairman" task force to address jurisdictional overlap between the two agencies. According to CFTC Chairman Giancarlo, there are a "whole bunch of areas where [the agencies] have overlapping jurisdiction, a whole bunch of areas where [they] have outstanding rules that haven't been resolved."
Department of Housing and Urban Development (HUD) to Review How it Interprets Errors and Mistakes in Loan Files: Speaking at a Mortgage Bankers Association conference in Denver, HUD Secretary Ben Carson said that the agency will revisit how it interprets mortgage defects—a decision intended to encourage more lenders to make Federal Housing Authority (FHA) loans. Since 2009, the Department of Justice (DOJ) has collected billions of dollars in false claims settlements over loans that were fraudulently certified as FHA compliant, leading many lenders to pull back from the program.
SEC Says it Doesn't Have Enough Money to Hire for Enforcement: Speaking at a conference in Washington, Steven Peikin, co-head of the SEC's enforcement division, said that the lack of a budget increase for the agency means that it will have fewer people available to investigate and pursue potential misconduct. He said that, as a result of attrition, the number of attorneys is decreasing and that they "don't have the hiring authority to backfill the people who leave."
OTHER NOTEWORTHY ITEMS
David Stevens to Step Down as Head of Mortgage Bankers Association (MBA): On October 25, the MBA announced that David Stevens will step down as the head of the group. Stevens was diagnosed with cancer last year, and though it is now in remission, he wants to focus on "family, friends, and staying healthy."
Singapore Won't Regulate Cryptocurrency: Monetary Authority of Singapore Managing Director Ravi Menon said that the country has no plan to regulate cyrptocurrencies such as bitcoin, saying at this point he doesn't see a basis for wanting regulations. He said that the bank will "look at the activities surrounding the cryptocurrency" and evaluate the risks posed.
Warren Buffett Calls Cryptocurrency a "Bubble": Speaking at an event, Warren Buffett followed up on his 2014 statement that cryptocurrency is a "mirage." He called it a "real bubble" and said that the excitement around the technology is the result of "big price movements" yielding improper praise.