Finance Brief: Week in Review & What’s Ahead

Finance Brief: Week in Review & What’s Ahead

Week in Review

Executive nominations

  • The White House said President Donald Trump intends to nominate former Treasury Department official and private equity investor Randal Quarles as the Federal Reserve’s bank supervisor. If confirmed by the Senate, Quarles would fill one of three vacant seats on the Fed’s board, as vice chairman for supervision.
  • Jim Clinger, Trump’s pick to lead the Federal Deposit Insurance Corp., withdrew his name from consideration. Clinger, a veteran House aide who was nominated last month, said his responsibilities to certain family obligations are “incompatible with the demands of leading an important federal agency like the FDIC.”
  • National Economic Council Director Gary Cohn is said to be the leading candidate to succeed Federal Reserve Chair Janet Yellen if Trump decides not to nominate her for a second term. Cohn, a former Goldman Sachs Group Inc. president, would be the first Fed chairman in four decades who isn’t an economist.
  • Yellen told members of the House Financial Services Committee that she would be open to discussing her potential renomination as head of the central bank if Trump decided to offer her a second term.
  • Trump nominated Rostin Behnam, a Senate Democratic aide, to be a member of the Commodity Futures Trading Commission. Behnam’s nomination was sent to the Senate, where two Republican nominees are also awaiting confirmation for the five-member commission.

CFPB’s arbitration rule

  • The Consumer Financial Protection Bureau adopted a rule that would ban bank and credit card companies from the common practice of forced arbitration and instead allow consumers to band together to file class-action lawsuits against financial firms.
  • Sen. Tom Cotton (R-Ark.) said he has initiated the legislative process that could repeal the rule through the Congressional Review Act.

Yellen’s testimony

  • The Wells Fargo scandal that created millions of phony bank and credit card accounts was “egregious and unacceptable” and the Fed is prepared to use its authority for punitive action pending an investigation, Yellen told the Senate Banking Committee during her semiannual testimony on monetary policy.
  • Trump’s goal of 3 percent annual growth is “quite challenging,” Yellen said. Achieving the objective, she said, would require unprecedented productivity growth and large adjustments to tax, labor and education.

Fiduciary rule

  • Securities and Exchange Commission Chairman Jay Clayton committed to carrying out the Labor Department’s fiduciary rule for investment advisers. In his first major speech since becoming head of the SEC, Clayton also called for the agency to slash unnecessary corporate disclosures, reduce burdens on small companies and enforce protections for retail investors from fraud.
  • House Democrats criticized a draft bill authored by Rep. Ann Wagner (R-Mo.) that would eliminate the Labor Department’s fiduciary rule, characterizing it as devastating to poor people and senior citizens. Wagner said she still hopes to get bipartisan support and expects to introduce the bill as early as this month.

What’s Ahead

  • The House and Senate are in session this week.
  • U.S. Trade Representative Robert Lighthizer is expected to release the Trump Administration’s North American Free Trade Agreement renegotiating objectives on Monday. The administration has given few specifics about its objectives but is expected to push to modernize the decades-old trade deal criticized by Trump on the campaign trail.
  • The Senate Banking Committee will continue its push for overhauling the housing finance system with a Thursday hearing focused on maintaining access for small lenders. Scheduled witnesses include representatives from the Independent Community Bankers of America, American Bankers Association, Community Home Lenders Association and Community Mortgage Lenders of America.
  • A “full-blown release” of a tax overhaul is planned for the beginning of September, with the aim of a final vote before the end of the year, according to Treasury Secretary Steven Mnuchin, who dismissed reports that the proposal would include a top personal tax rate of 40 percent or more.

Events Calendar (All Times Local)

SEC’s Piwowar speaks at Heritage Foundation 12 p.m.
National Retail Federation Advocates Summit 5 p.m.
Vice President Pence speaks at NRF conference 10 a.m.
Senate Banking Committee nomination hearing 10 a.m.
House Financial Services subcommittee hearing on public companies, corporate governance 10 a.m.
House Financial Services subcommittee hearing on managing terrorism finance risk 2 p.m.
National Retail Federation Advocates Summit 8 a.m.
U.S. Chamber of Commerce’s Center for Capital Markets Competitiveness discussion on CFPB arbitration rule 8:30 a.m.
House Financial Services subcommittee hearing on oversight of independent agencies 10 a.m.
House Financial Services subcommittee hearing on North Korea finance access 2 p.m.
National Retail Federation Advocates Summit 8:30 a.m.
House Financial Services subcommittee hearing on monetary policy vs. fiscal policy 9:30 a.m.
Senate Banking Committee hearing on housing finance reform 10 a.m.
No events scheduled

Morning Consult Finance Top Reads