Finance Brief: Week in Review & What’s Ahead

Week in Review

Financial regulation

  • The Treasury Department recommended a significant curbing of authority at the Consumer Financial Protection Bureau, along with allowing the agency’s director to be fired at will, in a report required by an executive order President Donald Trump signed in February. While the report does not call for a full repeal of Volcker Rule limits on proprietary trading, it recommended exempting small institutions from the Dodd-Frank regulation.
  • The Trump administration could implement some of the regulatory changes recommended by the Treasury Department without congressional approval. Some of the recommendations include changing stress-testing procedures and making it easier for banks to comply with federal capital rules.
  • Trading moves following the release of the Treasury Department’s report suggested that investors could be accounting for expected bank deregulation, according to one market indicator.

Congress

  • Sen. Elizabeth Warren (D-Mass.) said Senate Democrats are open to working with Republicans on “targeted” measures that would ease regulations affecting community banks and credit unions. Warren, who has shown little willingness to work with the GOP on loosening financial regulations, said she remains opposed to proposals that would limit consumer protections or weaken regulations for big banks.
  • The Senate Banking, Housing and Urban Affairs Committee advanced the nominations of Kevin Hassett to lead the Council of Economic Advisers and Pamela Patenaude to be deputy secretary of Housing and Urban Development. Warren was the only panel member to vote against each nominee.
  • House Freedom Caucus Chairman Mark Meadows (R-N.C.) said conservative lawmakers aren’t interested in the House GOP’s proposal to impose a border adjustable tax on business income from imports, even if the plan is to phase in the proposal. House Ways and Means Committee Chairman Kevin Brady (R-Texas) had suggested that a five-year phase-in could assuage some of the concerns of industry groups and conservative lawmakers.
  • The United States has “backup plans” in place if Congress doesn’t vote to raise the debt ceiling before the August congressional recess, according to Treasury Secretary Steven Mnuchin. The administration has been calling for lawmakers on Capitol Hill to increase the federal debt limit before the multi-week break that’s scheduled to start in early August.

Legal affairs

  • New lawsuits against Wells Fargo & Co. allege that the bank made inappropriate changes to customers’ mortgages by extending borrowers’ terms, leading to an increase in the number of monthly payments. A company spokesman said the mortgage modifications at issue “help customers stay in their homes when they encounter financial challenges” and were made with borrowers’ consent.
  • The U.S. Justice Department is investigating hiring practices at Barclays Plc for possible violations of federal antitrust laws related to executive-level promises that the British bank would not hire employees away from JPMorgan Chase & Co.
  • Companies that settle with the federal government for alleged wrongdoing will no longer have those settlement funds managed by outside groups that use them for projects to address corporate misdeeds, according to a memo from Attorney General Jeff Sessions. Instead, those funds will go directly to the U.S. Treasury or to victims of the company’s actions.
  • Bank of America Corp. is no longer obligated to comply with a 2010 Federal Reserve enforcement order that arose after bank traders were found to have manipulated bids for competitive municipal debt offerings. The decision means Bank of America doesn’t have to send the Fed reports each quarter on its internal oversight of competitive bids.
  • Cyber crime, such as stealing assets and making illegal trades, is the biggest threat to U.S. markets, according to the two new heads of enforcement at the Securities and Exchange Commission. The agency has seen an increase in investigations involving hackers, accompanied by a rise in the number of brokerage account intrusions.

What’s Ahead

  • House Speaker Paul Ryan (R-Wis.) is scheduled to deliver a major speech Tuesday on the topic of tax reform. He’ll be speaking at the National Association of Manufacturers Investment Summit.
  • On Wednesday, the House Financial Services Committee will continue marking up legislation that would reauthorize and overhaul the National Flood Insurance Program.

Events Calendar (All Times Local)

Monday
Bipartisan Policy Center event in Dallas on NAFTA 9 a.m.
Tuesday
National Association of Manufacturers Investment Summit with House Speaker Ryan 10 a.m.
InvestmentNews discussion on advising baby boomers 4 p.m.
Wednesday
National Association of Manufacturers Investment Summit 7:45 a.m.
NBPCA ‘Power of Prepaid’ conference 8 a.m.
IRS-Tax Policy Center Joint Research Conference 9 a.m.
Senate Finance Committee hearing with USTR’s Lighthizer 10 a.m.
House Financial Services Committee marks up flood insurance bills 10 a.m.
House Small Business Committee hearing on trade promotion coordinating committee 11 a.m.
Financial Services Roundtable event on financial regulation in Trump administration 1 p.m.
House Financial Services subcommittee hearing on monetary policy 2 p.m.
Thursday
NBPCA ‘Power of Prepaid’ conference 8 a.m.
WITA event on trade relations with Brazil 9 a.m.
ABA Payments Forum 9 a.m.
SEC Investor Advisory Committee meeting 9 a.m.
Senate Agriculture Committee confirmation hearing for CFTC’s Giancarlo 9:30 a.m.
CFPB event on student loan servicing in Raleigh, N.C. 10 a.m.
Senate Banking Committee hearing on regulators and economic growth 10 a.m.
House Ways and Means Committee hearing with USTR’s Lighthizer 10 a.m.
Friday
NBPCA ‘Power of Prepaid’ conference 8 a.m.
Global Business Dialogue event on trade with EU 9 a.m.
ABA Payments Forum 9 a.m.
House Financial Services subcommittee hearing on illicit art trade 9:15 a.m.

 

Morning Consult Finance Top Reads

1) Trump Administration Says Financial Watchdog Agency Should Be Defanged
Alan Rappeport and Matthew Goldstein, The New York Times

2) Senate Panel Advances Nomination of Kevin Hassett as Economic Adviser
Josh Zumbrun, The Wall Street Journal

3) Morning Consult’s Most Admired Employers 2017
Morning Consult Polling

4) Consumer Bureau asks for input on prepaid cards
Lydia Wheeler, The Hill

5) Elizabeth Warren Calls for Targeted Deregulation of Community Banks
Yuka Hayashi, The Wall Street Journal

6) Trump Administration to Call for Curbs on Consumer-Finance Regulator
Ryan Tracy, The Wall Street Journal

7) U.S. bank bosses succumb to email hoaxer
Anjuli Davies and Olivia Oran, Reuters

8) President Trump chooses inexperienced woman who planned his son Eric’s wedding to run N.Y. federal housing programs
Greg B. Smith, The New York Daily News

9) A summary of significant Treasury proposals that *don’t* require Congress
Alexandra Scaggs, Financial Times

10) Mnuchin Says U.S. Can Cope If Debt Ceiling Not Raised by August
Saleha Mohsin and Andrew Mayeda, Bloomberg News

Briefings

Finance Brief: CFPB Proposes Changes to Prepaid Card Rule

The Consumer Financial Protection Bureau announced plans to make changes to its prepaid card rule, with public comments on the proposals due within 45 days. The CFPB’s proposals would adjust the rule to require consumers register any prepaid cards before filing a complaint, and would allow providers to send disclosure forms to consumers digitally in some cases.

Finance Brief: Warren Says Democrats Open to Loosening Regulations for Community Banks, Credit Unions

Sen. Elizabeth Warren (D-Mass.) said Senate Democrats are open to working with Republicans on “targeted” measures that would ease regulations affecting community banks and credit unions. Warren, who has shown little willingness to work with the GOP on loosening financial regulations, said she remains opposed to proposals that would limit consumer protections or weaken regulations for big banks.

Finance Brief: Treasury Department Recommends Changes to CFPB, Volcker Rule

The Treasury Department recommended a significant curbing of authority at the Consumer Financial Protection Bureau, along with allowing the agency’s director to be fired at will, in a report required by an executive order President Donald Trump signed in February. The report does not call for a complete repeal of Volcker Rule limits on proprietary trading but instead proposes exempting small institutions from the Dodd-Frank regulation.

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