This Week in Washington for September 14, 2020
By Dina Ellis
THE BIG PICTURE
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Coronavirus infections in the United States surpassed 6.5 million, even as the daily average ticked down slightly; with 35,000 new cases a day reported over last week. The President drew criticism after a tape of his conversation with journalist Bob Woodward was released, showing that he understood the seriousness of the virus as early as February, but chose to downplay the threat publicly. The President continued to express optimism about the trajectory of the country’s progress in the fight against COVID-19, but Dr. Anthony Fauci cautioned that even after a vaccine is available, a full return to normalcy may not be possible until late 2021.
The prospects for an additional coronavirus relief package prior to the election continue to dim. Amid stalled negotiations over a comprehensive measure, Senate Majority Leader Mitch McConnell unveiled a scaled back “targeted” US$300B proposal on Tuesday. The bill, dubbed the Delivering Immediate Relief to America's Families, Schools and Small Businesses Act, focused on healthcare, education, and economic issues and included a simplified framework for PPP loan forgiveness. On Thursday the Senate blocked the advancement of the measure in a procedural vote. Senate Minority Leader Chuck Schumer criticized the bill as merely intended to give vulnerable Republican incumbents cover “by giving them a 'check the box' vote.”
Congressional attention is beginning to shift to the looming government shutdown fight, as both chambers return to DC and the September 30th deadline to pass a continuing resolution rapidly approaches. The Democratic caucus is reportedly divided over which strategy to pursue, with some favoring passage of a stopgap funding bill that would last through December, while others push for a longer term measure that would give them additional leverage if Joe Biden were to emerge victorious in November.
Other highlights of last week include:
On Friday, the President announced that Israel and Bahrain had agreed to normalize diplomatic relations. The breakthrough is the second such announcement in recent weeks, following the peace deal brokered between Israel and the United Arab Emirates.
The President released a list of 20 potential candidates for future Supreme Court vacancies, including three current Senators – Ted Cruz (R-TX), Tom Cotton (R-AR), and Josh Hawley (R-MO).
Rep. Tom Graves (R-GA) announced he would retire from Congress, effective next month.
LAST WEEK ON THE HILL
House Intelligence Committee Releases Whistleblower Reprisal Complaint: On Wednesday, Rep. Adam Schiff (D-CA), the Chairman of the House Permanent Select Committee on Intelligence, announced that the Committee had received a whistleblower complaint alleging serious wrongdoing by officials at the DHS and reprisal against former Office of Intelligence and Analysis Acting Under Secretary Brian Murphy for making protected disclosures. “The whistleblower retaliation complaint . . . outlines grave and disturbing allegations that senior White House and Department of Homeland Security officials improperly sought to politicize, manipulate, and censor intelligence in order to benefit President Trump politically.” Schiff said the Committee would “get to the bottom of this,” as it “puts our nation and its security at grave risk.”
Senate Democrats Call on Administration to Take Stronger Action Against Election Interference: On Friday, top Senate Democrats called on the Trump administration to put together a comprehensive plan to stop foreign interference in the 2020 election, following the announcement it would sanction Ukrainian national, and longtime Russian agent, Andriy Derkach for his role in spreading misinformation about Vice President Joe Biden.
HOUSE FINANCIAL SERVICES COMMITTEE
Hearing on “
Joyce Cofield, Executive Director, OMWI, Office of the Comptroller of Currency
Sheila Clark, Director, OMWI, Board of Governors of the Federal Reserve System
Lacey Dingman, Director, OMWI, Federal Reserve Bank of New York
Nikita Pearson, Acting Director, OMWI, Federal Deposit Insurance Corporation
Monica Davy, Director, OMWI, National Credit Union Administration
Lorraine Cole, Director, OMWI, U.S. Department of the Treasury
Pamela Gibbs, Director, OMWI, U.S. Securities and Exchange Commission
Sharron Levine, Director, OMWI, Federal Housing Finance Agency
Lora McCray, Director, OMWI, Consumer Financial Protection Bureau
Hearing on “
Michelle Lujan Grisham, Governor, State of New Mexico
Tim Walz, Governor, State of Minnesota
Laura Kelly, Governor, State of Kansas
Lourdes “Lou” Leon Guerrero, Governor, Territory of Guam
Douglas Holtz-Eakin, President, American Action Forum
SENATE BANKING COMMITTEE
Hearing on “
Hal Scott, President, Committee on Capital Markets Regulation
Jeffrey DeBoer, President And Chief Executive Officer, The Real Estate Roundtable
William Spriggs, Professor Of Economics, Chief Economist, Howard University, AFL-CIO
Select Subcommittee on the Coronavirus Crisis Hearing on “
Jay Ashcroft, Missouri Secretary of State
Kristen Clarke, President and Executive Director, Lawyers’ Committee for Civil Rights Under Law
Krutika Kuppalli M.D., Vice Chair of Global Health Committee, Infectious Diseases Society of America and Assistant Professor of Medicine, Division of Infectious Diseases, Medical University of South Carolina
Mimi Marziani, President, Texas Civil Rights Project
Kerry Washington, Actor and Activist
LEGISLATION INTRODUCED AND PROPOSED
H.R. 8169: Rep. Sylvia Garcia (D-TX) introduced H.R. 8169, the Elder Abuse Protection Act of 2020, which would amend the Elder Abuse Prevention and Prosecution Act to authorize the Elder Justice Initiative, to require that online resources of such initiative are made available in Spanish.
H.R. 8176: Rep. Gregory Meeks (D-NY) introduced H.R. 8176, the American Dream Down Payment Act of 2020, which would amend the Internal Revenue Code of 1986 to establish qualified down payment savings programs.
H.R. 8188: Rep. Tom Emmer (R-MN) introduced H.R. 8188, the Mutual Fund Litigation Reform Act, which would amend the Investment Company Act of 1940 to provide complaint and burden of proof requirements for certain actions for breach of fiduciary duty.
Online Arsenal to Combat Foreign Terrorist Organizations: Rep. Josh Gottheimer (D-NJ) announced the creation of the Online Arsenal to Combat Foreign Terrorist Organizations, which will include new legislation to require regular disclosure of the presence of FTOs fundraising on social media, as well as financial and criminal penalties for any social media company that knowingly permits accounts tied to designated terrorist groups to solicit support and resources on its platform.
THIS WEEK ON THE HILL
Wednesday, September 16
House Financial Services Committee Hearing on “
Thursday, September 17
House Financial Services Committee (Subcommittee on Investor Protection, Entrepreneurship and Capital Markets) Hearing on “
CFTC’s Climate-Related Market Risk Subcommittee Releases Report: On Wednesday, the CFTC’s Climate-Related Market Risk Subcommittee released a report entitled Managing Climate Risk in the U.S. Financial System. The report presents 53 recommendations to mitigate the risks to financial markets posed by climate change, concludes that: (1) Climate change poses a major risk to the stability of the U.S. financial system and to its ability to sustain the American economy; (2) Climate risks may also exacerbate financial system vulnerability that have little to do with climate change; including vulnerabilities caused by a pandemic that has stressed balance sheets, strained government budgets, and depleted household wealth; (3) U.S. financial regulators must recognize that climate change poses serious emerging risks to the U.S. financial system, and they should move urgently and decisively to measure, understand, and address these risks; (4) Existing statutes already provide U.S. financial regulators with wide-ranging and flexible authorities that could be used to start addressing financial climate-related risk now; (5) Regulators can help promote the role of financial markets as providers of solutions to climate-related risks; and (6) Financial innovation is required not only to efficiently manage climate risk but also to facilitate the flow of capital to help accelerate the net-zero transition and increase economic opportunity.
CFTC Issues Guidance on Factors Used in Evaluating Corporate Compliance Programs in Connection with Enforcement Matters: On Thursday, the CFTC announced the issuance of new, public, staff-level guidance by the Division of Enforcement, which outlines factors that will be considered when evaluating compliance programs in connection with enforcement matters. “This new guidance highlights, once again, the CFTC’s commitment to transparency and clarity,” said Chairman Heath Tarbert.
CFTC to Hold an Open Commission Meeting: On Thursday, the CFTC announced it will hold an open meeting on Thursday, September 17. The Commission will consider the following: (1) Final Rule: Registration with Alternative Compliance for Non-U.S. Derivatives Clearing Organizations; (2) Final Rule: Amendments to Real-Time Public Reporting Requirements (Part 43); (3) Final Rule: Amendments to Swap Data Recordkeeping and Reporting Requirements (Part 45); (4) Final Rule: Amendments to the CFTC’s Regulations Relating to Certain Swap Data Repository and Data Reporting Requirements (43, 45, and 49 Verification); (5) Supplemental Notice of Proposed Rulemaking: Part 190 Bankruptcy Regulations.
SEC Modernizes Disclosures for Banking Registrants: On Friday, the SEC announced that it has adopted rules to update and expand the statistical disclosures that bank and savings and loan registrants provide to investors, in light of changes in this sector over the past 30 years. The rules also eliminate certain disclosure items that are duplicative of other Commission rules and requirements of U.S. GAAP or IFRS. The rules replace Industry Guide 3, Statistical Disclosure by Bank Holding Companies, with updated disclosure requirements in a new subpart of Regulation S-K. The rules are intended to help ensure that investors have access to more meaningful, relevant information about these registrants to facilitate their investment and voting decisions.
SEC Issues Agenda for September 16 Meeting of the Asset Management Advisory Committee: On Friday, the SEC released the agenda for the September 16 meeting of the Asset Management Advisory Committee (AMAC). The meeting will include a discussion of matters in the asset management industry relating to (1) the ESG and Private Investments Subcommittees; and (2) improving diversity and inclusion. It will also include a follow-up discussion on COVID-19 matters relating to AMAC’s meeting of May 27.
New York Fed Announces the First Wave of Firms Selected To Broaden its Counterparty Base for CPFF and SMCCF: On Wednesday, the Federal Reserve Bank of New York announced the first wave of additional counterparties that it has selected to support the Commercial Paper Funding Facility (CPFF) and the Secondary Market Corporate Credit Facility (SMCCF). By widening the eligibility criteria for counterparties to these 13(3) facilities, the New York Fed is furthering its commitment to support diversity, inclusion, and opportunity as they increase these facilities’ operational capacity and reach. The selected firms represent a diverse range of market participants in terms of firm-size, business models, and ownership, including Minority, Women, and Veteran Business Enterprises. The New York Fed has an open and continuing application process for these roles and intends to name additional firms as counterparties and agents, as applicable, for the CPFF, SMCCF, and Term Asset-Backed Securities Loan Facility (TALF) in the weeks ahead.
Treasury Sanctions Russia-Linked Election Interference Actors: On Thursday, the Treasury Department’s Office of Foreign Assets Control (OFAC) designated four Russia-linked individuals for attempting to influence the U.S. electoral process. “Russian agents employ manipulation and deceit to attempt to influence elections in the United States and elsewhere around the world,” said Secretary Steven Mnuchin. “The United States will continue to use all the tools at its disposal to counter these Russian disinformation campaigns and uphold the integrity of our election system.”
Treasury Secretary Mnuchin Participates in Call with the Finance Ministers of the Five Eyes Nations: On Thursday, Treasury Secretary Steven Mnuchin participated in a call with his counterparts from Australia, Canada, New Zealand, and the United Kingdom. The group shared their experiences of using monetary and fiscal policy in their respective countries, as part of each Governments’ economic responses to COVID-19. The call, hosted by the Finance Minister of New Zealand, was the fourth in a series of regular calls among the Finance Ministers of the Five Eyes nations.
EXIM Chair Highlights Partnership Between Insurance Brokers and EXIM and Praises Role of REPP Partners: On Wednesday, Export-Import Bank of the United States President and Chair Kimberly Reed addressed the 2020 EXIM Broker Annual Meeting, underscoring the critical role played by the more than 100 EXIM registered insurance brokers, particularly this year as they have helped small business exporters navigate the economic challenges presented by the COVID-19 pandemic. Reed also addressed the 2020 Annual Meeting of the Regional Export Promotion Program (REPP), highlighting the critical role REPP members play in utilizing their local market knowledge to link small business exporters to the global marketplace.
Operators of Student Debt Relief Scheme Agree to Pay at Least $835,000 to Settle FTC Allegations: On Wednesday, a federal judge in California approved a settlement resolving FTC litigation against five individuals alleged to have charged illegal upfront fees and made false promises to consumers struggling with student loan debt. The order bans the settling defendants from providing student loan debt relief services, prohibits them from violating the Telemarketing Sales Rule, and includes a monetary judgment of US$43.3M, which is partially suspended due to an inability to pay.
OTHER NOTEWORTHY NEWS
Swiss Data Commissioner Reassesses Data Privacy Flow with US: On Tuesday, in the aftermath of the recent rulings on data protection by the Court of Justice of the European Union, the Swiss Federal Data Protection and Information Commissioner announced he had reassessed the data protection conformity of the Privacy Shield regime between Switzerland and the United States. The FDPIC concluded that, although the agreement guarantees special protection rights for persons in Switzerland, it does not provide an adequate level of protection for data transfer from Switzerland to the U.S.
Paul Hastings’ Government Relations team is monitoring these issues. We help our clients craft strategies to address federal legislative and regulatory matters. Please reach out to us if your organization needs assistance with congressional or regulatory relations.