Finance Brief: Week in Review & What’s Ahead

Week in Review

Congress

  • Senate Majority Leader Mitch McConnell (R-Ky.) said it is unlikely that Congress will pass a tax reform bill before the August recess. Senate GOP taxwriters are considering a tax proposal of their own that does not include the controversial border-adjustable tax on imports found in the House GOP’s blueprint.
  • Senate Finance Committee members from both parties praised the record of U.S. trade representative nominee Robert Lighthizer, but they’re still at odds over whether he needs a waiver before confirmation because of past work representing foreign governments.

Trump administration

  • President Donald Trump is considering the potential consequences of firing Consumer Financial Protection Bureau Director Richard Cordray. At the same time, the Justice Department is changing its tack and opposing the CFPB in a crucial federal court case dealing with the bureau’s structure.
  • Trump announced plans to nominate Goldman Sachs Group partner James Donovan as Treasury Secretary Steven Mnuchin’s deputy.
  • Trump’s fiscal year 2018 budget blueprint calls for major cuts to the Department of Housing and Urban Development. The administration also proposed a $239 million funding reduction for the Internal Revenue Service.

Financial regulators

  • The White House said Trump intends to nominate Christopher Giancarlo to serve as chairman of the Commodity Futures Trading Commission. Giancarlo, the current acting chairman, has been a Republican member of the derivatives regulator since 2014. Giancarlo later said he wants to revise CFTC rules on swaps trading.
  • Federal Reserve Chair Janet Yellen said that fiscal policy changes Trump has advocated do not factor into the Federal Open Market Committee’s decisions.
  • Federal Deposit Insurance Corp. Vice Chairman Tom Hoenig unveiled a proposal to make large financial firms spin off high-risk units with the goal of reducing systemic risk.

What’s Ahead

  • The Senate Health, Education, Labor and Pensions Committee is slated to hold a confirmation hearing Wednesday for labor secretary nominee Alexander Acosta.
  • The Senate Banking Committee is scheduled to hold a confirmation hearing on Thursday for Jay Clayton, Trump’s nominee to lead the Securities and Exchange Commission.
  • House Financial Services subcommittees will examine several pet issues for House Republicans, such as the structure of the Consumer Financial Protection Bureau and the slow pace of approvals for de novo banks. The hearings come at a time where the panel’s chairman, Rep. Jeb Hensarling (R-Texas), continues to work with members on forthcoming legislation aimed at rolling back the 2010 Dodd-Frank Act.

Events Calendar (All Times Local)

Monday
ABA government relations summit 8:30 a.m.
George Washington University event on tax reform 6:30 p.m.
Tuesday
ABA government relations summit 7:45 a.m.
FDIC board meeting 10 a.m.
House Financial Services subcommittee hearing on CFPB structure 10 a.m.
Urban Institute event on credit scoring methods 12:30 p.m.
House Financial Services subcommittee hearing on de novo bank applications 2 p.m.
Wednesday
Senate HELP Committee hearing on labor secretary nominee Alex Acosta 9 a.m.
SEC open meeting 10 a.m.
House Financial Services subcommittee hearing on World Bank 10 a.m.
House Financial Services subcommittee hearing on JOBS Act 2 p.m.
Thursday
Fed’s Yellen gives opening remarks at Community Development Research Conference 8:45 a.m.
WITA event on trade law 9 a.m.
Senate Banking Committee confirmation hearing for SEC nominee Jay Clayton 9:30 a.m.
Friday
No events scheduled

 

Morning Consult Finance Top Reads

1) Senate Republicans eyeing alternative tax reform plan
Alexander Bolton, The Hill

2) Big banks should split off riskiest activities: FDIC’s Hoenig
Patrick Rucker, Reuters

3) Trump Picks a Regulator Who Could Help Reshape Dodd-Frank Act
Ben Protess, The New York Times

4) Trump’s budget plan slices $239 million from IRS, but Treasury overall is spared severe cuts
Max Ehrenfreund, The Washington Post

5) Finra’s lobbying expenses down, but regulator still spends heavily to make sure its voice is heard on Capitol Hill
Mark Schoeff Jr., InvestmentNews

6) Trump Said to Weigh Political Risks of Firing CFPB’s Cordray
Elizabeth Dexheimer, Bloomberg News

7) CFPB, Justice Department Poised to Square Off in Court
Yuka Hayashi, The Wall Street Journal

8) Dems vow to reject any debt limit hike with poison riders
Mike Lillis, The Hill

9) Trump is about to pull off one of the biggest transfers of wealth in history and Texas will lose
Richard Parker, The Dallas Morning News

10) Trump Paid $38 Million in 2005 Federal Income Tax, White House Says Before Report
Alex Johnson, MSNBC

Briefings

Finance Brief: Week in Review & What’s Ahead

President Donald Trump signed three executive actions affecting the financial services industry. The actions included two presidential memorandums — one directing the Treasury Department to examine the Dodd-Frank process for winding down failing banks, and another directing the agency to review the Financial Stability Oversight Council’s authority to designate firms systemically important. The third item was an executive order directing the Treasury Department to analyze tax rules adopted in the last 18 months and identify any regulations deemed convoluted or onerous.

Finance Brief: Week in Review & What’s Ahead

President Donald Trump expressed support for the Export-Import Bank, a longtime target of fiscal conservatives who see it as a government interloper in private markets. The export credit agency has faced limited financing powers for more than a year due to board vacancies. To resolve that, the White House said Trump intends to nominate two Ex-Im candidates, both requiring Senate confirmation: former Rep. Scott Garrett (R-N.J.), who voted against renewing the bank’s charter while he was in Congress, would be head of the credit agency; and former Rep. Spencer Bachus (R-Ala.), who previously led the House Financial Services Committee, would serve on the agency’s board.

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