Finance Brief: Week in Review & What’s Ahead


Week in Review

Legislation

  • Congress extended until Dec. 8 the National Flood Insurance Program, which was set to expire at the end of the month, and also passed extensions of the nation’s debt ceiling limit and spending measures, which were tacked onto a $15.3 billion relief package for Hurricane Harvey victims. President Donald Trump signed the bill on Friday.

Taxes

  • After striking a deal with Democratic leaders on a short-term extension of the debt ceiling, Trump encouraged Democrats to join his quest for a “once-in-a-generation opportunity” to rewrite the tax code. 
  • Republican lawmakers say they are making progress on a tax policy framework, but Trump’s goal of a 15 percent corporate tax rate may be a point of contention
  • National Economic Council Director Gary Cohn’s argument that corporate tax cuts can help the middle class by pushing up returns at public pension funds received a mixed verdict from economic experts.

Banking and financial services

  • Payment processor Square is filing for an industrial loan company, which allows nontraditional financial institutions to access the Federal Reserve payments system and take deposits with a lesser degree of regulation than a traditional bank charter.
  • Jamie Dimon, the chief executive of JPMorgan Chase & Co., and Lloyd Blankfein, chief executive of Goldman Sachs Group Inc., joined widespread corporate criticism of Trump’s decision to end the Deferred Action for Childhood Arrivals program, which sheltered from deportation undocumented immigrants brought to the United States as children.
  • Equifax Inc., one of the three major credit reporting companies in the United States, said a data breach affected as many as 143 million consumers, leaking names, birth dates, Social Security numbers, addresses and some driver’s license numbers. The House Financial Services Committee will hold a hearing to investigate the hack.

Trade

  • U.S. Trade Representative Robert Lighthizer said he was optimistic about negotiating changes to the South Korea-U.S. free trade pact, but he did not mention any potential termination of the 5-year-old agreement, an idea that administration officials said Trump had been considering before North Korea conducted a nuclear test.  
  • In the second round of renegotiations of the North American Free Trade Agreement, Canada held firm to ambitious goals for labor and environmental regulations that Washington might find difficult to accept.  

Wells Fargo

  • One year after federal regulators hit Wells Fargo & Co. with a $185 million fine for cross-selling practices that led to the creation of millions of fraudulent consumer accounts, the bank is still picking up the pieces in the court of public opinion.

Fines and settlements

  • Thema International Fund Plc, an Irish investment fund that helped provide European cash for Bernard Madoff’s Ponzi scheme in the early 1990s, agreed to pay $687 million to victims of the fraud.
  • State Street Corp., one of the largest asset managers in the United States, agreed to pay more than $35 million to settle Securities and Exchange Commission charges that it had overcharged customers and left out crucial information about how it operated its Treasury trading platform.
  • Pakistan’s Habib Bank agreed to pay a $225 million fine to the New York State Department of Financial Services and close its New York branch in order to settle charges that it did not comply with anti-money laundering and sanctions rules.

What’s Ahead

  • White House and Republican leaders have reached a consensus on some issues concerning a tax reform framework, which could be released by the end of the month.
  • The House Financial Services Committee will hold a hearing on impeding North Korea’s access to finance on Wednesday as the United States pursues even tougher U.N. sanctions against Pyongyang.
  • Trump and Democratic leaders are pursuing a plan for the permanent removal of Congress’ obligation to continually raise the debt ceiling.

Events Calendar (All Times Local)

Monday
No events scheduled
Tuesday
Bipartisan Policy Center panel on curbing money laundering and terrorist financing 9 a.m.
Senate Banking hearing on fintech landscape 10 a.m.
Senate Finance Committee hearing on healthcare cost and coverage issues 10 a.m.
House Financial Services Hearing on Federal Reserve monetary policy 2 p.m.
NACHA webinar on millennials in small business 2 p.m.
Wednesday
SEC Advisory Committee on small and emerging companies 9:30 a.m.
House Financial Services hearing on North Korea’s access to finance 10 a.m.
Tax Foundation panel with U.S. Sen. Ted Cruz 12 p.m.
TCH Payments Thirty webinar 2 p.m.
Thursday
POLITICO Pro Policy Summit 8:30 a.m.
AAP review workshop 9 a.m.
Senate Banking hearing on foreign investment 10 a.m.
Senate Finance Committee hearing on individual tax reform 10 a.m.
Friday
AEI seminar on trade deficits and the Trump administration 10 a.m.
FDIC webinar on deposit insurance coverage 1 p.m.

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