Finance Briefs: Week in Review & What’s Ahead


Week in Review

Budget legislation

  • The administration of President Donald Trump is indicating that it’s backing off threats to shut down the government next month if Congress decides against appropriating funds for a wall along the country’s border with Mexico. Instead, officials have signaled that the administration is leaning toward endorsing a plan to deal with wall funding as part of a December budget bill.

Consumer Financial Protection Bureau

  • The Consumer Financial Protection Bureau is set to finalize a new rule for payday lenders in September that is likely to apply to short-term loans that last two weeks but not to loans with terms of over 45 days.
  • House Financial Services Committee Chairman Jeb Hensarling (R-Texas) said in a letter that the CFPB’s payday loan rule could land in legal trouble if the rule-making process is linked to the possible political ambitions of Richard Cordray, the bureau’s director. Cordray denied that political considerations affected the pending rule and said that he had “no further insights” on whether he planned to resign his post on a specific date.

Wells Fargo

NAFTA

  • Trump said he believed that starting the process to withdraw the United States from the North American Free Trade Agreement might be necessary to achieve an ultimately “fair deal” with Canada and Mexico in the renegotiation talks. Mexican Foreign Relations Secretary Luis Videgaray said his country would leave the talks if Trump followed through on his threat.
  • As the three countries prepared for the second round of renegotiations in Mexico City, which began Friday, business leaders in Mexico and the United States were studying legal options in case Trump does withdraw the United States from the pact.

Tax reform

  • Trump reiterated in a speech on his tax reform agenda that he believed that the corporate tax rate should be lowered to 15 percent from 35 percent, but he didn’t provide any new details.
  • Trump’s push for a major cut in corporate taxes has exposed differences among Democrats about how the party should approach business taxes.

Debt limit

  • Trump was considering supporting a plan that would have combined an increase in the debt ceiling with $5.95 billion in funding for federal agencies handling the recovery from Hurricane Harvey, but House GOP leaders don’t intend to include a debt limit increase in the aid package.

Financial regulation

  • Sen. John Kennedy of Louisiana is seen as a key Republican vote on a pending congressional resolution that would undo the Consumer Financial Protection Bureau’s limits on arbitration clauses in financial companies’ consumer contracts.

Harvey aftermath

  • Lawmakers and Capitol Hill staff say a long-term reauthorization of the debt-strapped National Flood Insurance Program is unlikely to pass Congress before the program’s Sept. 30 expiration date.
  • JPMorgan Chase & Co. released an initial estimate that insurers will need to pay out $10 billion to $20 billion as a result of damage from Tropical Storm Harvey. Federal mortgage agencies also said the damage from Harvey could cause losses on some of the 400,000 mortgages that they guarantee.

What’s Ahead

  • Congress will be back in session after the Labor Day holiday. Critical finance-related developments such as raising the debt ceiling and reauthorizing the National Flood Insurance Program will be on lawmakers’ agenda.
  • On Thursday, the Senate Banking Committee will vote on the nominations of Joseph Otting to be the comptroller of the currency and Randal Quarles to be the Federal Reserve’s vice chairman of supervision.
  • Discussions on tax reform are likely to ramp up as September progresses. Treasury Secretary Steven Mnuchin said congressional Republican leaders and Trump administration officials plan to release more details about their tax overhaul plan in the next few weeks.

Events Calendar (All Times Local)

Monday
Federal holiday — no events scheduled
Tuesday
SEC’s Clayton speech at NYU 5:30 p.m.
Wednesday
House Financial Services subcommittee hearing on financing for lone-wolf terrorist attacks 2 p.m.
Mercatus Center discussion with former Treasury Secretary Lawrence Summers 3:30 p.m.
Thursday
Urban Institute event on tax policy and immigrant experience 9 a.m.
FDIC fall research conference 9 a.m.
Senate Banking Committee markup of FSOC insurance bill, Quarles & Otting nominations 9:30 a.m.
Senate Banking Committee hearing on North Korea sanctions 9:30 a.m.
House Financial Services subcommittee hearing on financial regulation legislation 10 a.m.
National Economists Club luncheon on economic academia 12 p.m.
House Financial Services subcommittee hearing on FINRA oversight 2 p.m.
Friday
FDIC fall research conference 8 a.m.
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