• JPMorgan Chase & Co. CEO Jamie Dimon said in prepared remarks ahead of his appearance before two congressional committees this week that growing capital requirements for large banks “is itself becoming a significant economic risk,” adding that the policy is “bad for America.” Dimon also characterized inflation, the Federal Reserve’s moves to raise interest rates as “storm clouds” over the economy. (Bloomberg)
• Following credit card companies’ decision to track gun sales with a new merchant code, a group of GOP attorneys general have sent letters to Visa Inc., Mastercard Inc. and American Express Co. urging them to halt plans to track gun purchases on grounds that doing so violates customer privacy and could push legal sales out of the mainstream financial network. The attorneys general said they planned to make every effort to stop the companies from tracking firearm sales. (The Associated Press)
• President Joe Biden announced two Republican nominations for the board of the Federal Deposit Insurance Corp.: Travis Hill, a top aide to former FDIC Chair Jelena McWilliams, and the Federal Housing Finance Agency’s Jonathan McKernan, who currently serves on the Banking Committee staff of Sen. Pat Toomey (R-Pa.). White House officials said a nomination to replace McWilliams, who stepped down earlier this year, is forthcoming. (Politico Pro)
• FTX and Binance are among the current leaders in bids to purchase the assets of the bankrupt crypto lending firm Voyager Digital Ltd., with Binance’s current $50 million bid in the lead, according to people familiar with the matter. (The Wall Street Journal)

Worth watching today (all times local):

The Federal Open Market Committee policy meeting concludes today, and investors are expecting at least a 0.75-point rise in the key interest rate. Federal Reserve Chair Jerome Powell will hold a news conference after the Fed announces its policy decision at 2 p.m. 

10 a.m. The chief executives of Wells Fargo & Co., Bank of America Corp., Citigroup Inc., JPMorgan Chase & Co., Truist Financial Corp., U.S. Bancorp and PNC Financial Services Group Inc. will testify before the House Financial Services Committee. 

5 p.m. Acting Comptroller of the Currency Michael Hsu will give the keynote address at EMERGE Financial Health 2022.

7 p.m. Commodity Futures Trading Commission Commissioner Kristin Johnson gives a keynote at the 2022 WIND Annual Gala with Award Ceremony.

Also: The National Association of Realtors updates its data on existing home sales.

What Sustainability Means to Consumers: Financial Services

Morning Consult

EY Faces Knotty Split of Its Lucrative Tax Business

Jean Eaglesham, The Wall Street Journal

Ernst & Young’s tax experts bring in lots of cash and are highly valued by the firm’s clients. Many members of the 70,000 strong group don’t know where they will be working next year, or if they will be competing against each other.

U.S. Treasury official criticizes China’s ‘unconventional’ debt practices

Andrea Shalal, Reuters

A top adviser to U.S. Treasury Secretary Janet Yellen will warn on Tuesday that China’s foot-dragging on debt relief could burden dozens of low- and middle-income countries with years of debt servicing problems, lower growth and underinvestment.

Millions Eligible for Student Debt Relief Live in Battleground States

Ella Ceron, Bloomberg

Many of the voters with debt who will benefit from President Joe Biden’s student loan relief plan live in key battleground states, a new analysis by the Department of Education finds.

Legal Challenges to Student Loan Forgiveness Loom Before Midterms

Gabriel T. Rubin and Jacob Gershman, The Wall Street Journal

The Biden administration and Republican opponents of mass student debt cancellation appear headed for a legal confrontation with hundreds of billions of dollars at stake just weeks before the November midterm elections.

Senators grill Treasury officials over effectiveness of sweeping Russian sanctions

Tobias Burns, The Hill

Treasury and Justice department officials defended the effectiveness of wide-ranging U.S. sanctions placed on Russia following the country’s invasion of Ukraine despite indications that Russia’s economic pivot toward Asia has buoyed the country. Officials told the Senate Banking Committee Tuesday that Western sanctions have siphoned money away from the Russian war effort and helped Ukraine achieve significant military gains, like the 8,000 square kilometers wrested back from Russian control in recent weeks.

Big business likes to trumpet ESG credentials. But a ‘greenwashing’ reckoning could be on the horizon

Anmar Frangoul, CNBC

As the 2020s progress, discussions about climate change, the environment and issues related to equality and diversity are at the forefront of many people’s minds.

Colorado Residents Can Now Use Crypto to Pay Taxes

Oliver Knight, CoinDesk

Colorado residents can now pay state taxes with cryptocurrencies using PayPal, according to the state’s payment portal. Payment takes place through PayPal’s cryptocurrencies hub for an additional fee.

IRS picks 8 new members for electronic tax filing advisory committee

John Hewitt Jones, FedScoop

The Internal Revenue Service has named eight new members of its Electronic Tax Filing Administration Advisory Committee. The committee is a public forum for the discussion of electronic tax administration issues, and its core goal is to promote paperless filing of tax and information returns.

Fears of Fed-induced pain grow, from global recession to deflation

Victoria Guida, Politico

The Federal Reserve is poised to deploy another supersized interest rate hike to fight the sharpest price surge in 40 years, a move that has drawn remarkably little political pushback despite rising market anxiety just weeks before an election.

Fed set for big rate hike as waters get choppy for world’s central banks

Howard Schneider, Reuters

The Federal Reserve is expected on Wednesday to lift interest rates by three-quarters of a percentage point for a third straight time and signal how much further and how fast borrowing costs may need to rise to tame a potentially corrosive outbreak of inflation.

Layoffs loom on the horizon, some economists say

Andrea Miller, CNBC

From rising inflation to a red-hot job market and the negative gross domestic product in between, economists are divided on the health of the U.S. economy.

U.S. Gas Prices End Streak of Declines Just Short of 100 Days

Isabella Simonetti, The New York Times

Falling fuel costs have recently helped temper overall inflation, but the effect may be waning.

Dollar hits 20-year high after Putin calls up more troops

Chris Flood, Financial Times

Russian president’s move spurs ‘safe-haven demand’ for US and Japanese currencies.

Wells Fargo Faces Several Years of Regulatory Work, Scharf Says

Daniel Taub and Hannah Levitt, Bloomberg

Wells Fargo & Co. remains committed to turning itself around following a series of scandals that have plagued the bank since the middle of the last decade, but it will take “several years of work” to satisfy US regulators, Chief Executive Officer Charlie Scharf said.

US banks threaten to leave Mark Carney’s green alliance over legal risks

Stephen Morris et al., Financial Times

Wall Street banks including JPMorgan, Morgan Stanley and Bank of America have threatened to leave Mark Carney’s financial alliance to tackle climate change because they fear being sued over increasingly stringent decarbonisation commitments.

Biggest US Banks Scale Back on Property Lending as Rates Climb

John Gittelsohn et al., Bloomberg

Banks including Wells Fargo & Co., Bank of America Corp. and JPMorgan Chase & Co. have pulled back on financing for offices and other commercial real estate following a record burst of lending in the first half of this year.

How Goldman Sachs Found a Friend in America’s Small Businesses

Charley Grant, The Wall Street Journal

Thousands of entrepreneurs packed into a ballroom at a conference center just outside of Washington this summer to hear from the likes of Warren Buffett and Gwyneth Paltrow. Sens. Kyrsten Sinema (D., Ariz.) and Tim Scott (R., S.C.) joined panel discussions.

Citigroup Boosts Diversity Targets After Surpassing Earlier Goals

Jenny Surane, Bloomberg

Citigroup Inc. is raising its targets for improving the diversity of its executive ranks after surpassing an earlier goal. By 2025, the Wall Street giant hopes to increase the percentage of Black employees in roles from assistant vice president to managing director to 11.5% in the US, Puerto Rico and Canada after it surpassed an 8% target for the US last year.

PwC Inks $267 Million Class Deal in Long-Running Pension Lawsuit

Jacklyn Wille, Bloomberg Law

PricewaterhouseCoopers LLP will pay $267 million to settle a 16-year-old class action by retirees seeking higher pension benefits and challenging various aspects of the company’s pension plan, according to a filing in the Southern District of New York.

Soaring US ‘real yields’ pose fresh threat to Wall Street stocks

Kate Duguid, Financial Times

Investors are expecting higher inflation-adjusted returns on ultra-safe government debt.

Millennials Are Finally Building Wealth and Hiring Financial Advisers

Suzanne Woolley and Misyrlena Egkolfopoulou, Bloomberg

Millennials are self-centered and allergic to commitment. They switch jobs every six months and will never buy homes. And don’t get them started on marriage and kids.

Citadel’s Griffin Brings Billions to Miami With Political Winds at His Back

Amanda L Gordon, Bloomberg Businessweek

The Citadel founder worth $29.6 billion has ditched Chicago for Wall Street South. Not everyone in Miami is so welcoming.

Political divide snags the digital update to anti-redlining law

Steven Harras, Roll Call

Federal bank regulators’ efforts to modernize the 45-year-old law known as the Community Reinvestment Act to reflect the rise of digital banking are raising accusations of partisanship, a claim that those digging into the details say is likely unfounded.

U.S. homebuilding buoyed by multi-family projects; falling permits signal weakness

Lucia Mutikani, Reuters

U.S. homebuilding unexpectedly increased in August as rising rents boosted the construction of multi-family housing to the highest level in more than 36 years, but soaring mortgage rates and high prices are undercutting the overall housing market.

U.S. rents surge, leaving behind generation of younger workers

Rose Horowitch, Reuters

The cost of renting a home in the United States is surging and young workers have felt the sharpest pain, many of them taking on additional jobs or roommates to afford housing costs.

Purchase mortgage denial rates still higher for minorities

Brad Finkelstein, National Mortgage News

Purchase application denial rates remained higher for Blacks and Hispanic whites in 2021, but the share of denials for each group were smaller compared with each group’s 2020 numbers, the latest Home Mortgage Disclosure Act data release from the Consumer Financial Protection Bureau found.

Chinese Firms Flee U.S. Commercial Real-Estate Market After Big Property Bets Sour

Konrad Putzier, The Wall Street Journal

Investors from China who once snapped up American office buildings and hotels have sold a net $23.6 billion of U.S. commercial properties in recent years.

House stablecoin bill begins to take shape with circulating draft

Sam Sutton and Declan Harty, Politico Pro

A long-awaited bipartisan stablecoin bill from House Financial Services Committee lawmakers is expected to be introduced in 2022, Rep. Patrick McHenry (R-N.C.) said Tuesday.

Warren targets crypto ‘mixers’ in push to boost Russian sanctions

Benjamin Johansen, The Hill

Sen. Elizabeth Warren (D-Mass.) on Tuesday sounded the alarms on the potential of Russian elites using cryptocurrency “mixers” as a way of avoiding U.S. sanctions placed on the country and many of its oligarchs in the wake of the Kremlin’s invasion of Ukraine.

Nasdaq considers crypto trading as it pushes into digital assets

Scott Chipolina, Financial Times

US equities exchange undeterred by market crash that saw bitcoin and ethereum plummet in value.

Hacked Crypto Market Maker Wintermute Has $200M in Outstanding DeFi Debt

Oliver Knight, CoinDesk

Cryptocurrency market maker Wintermute, the victim of Tuesday’s $160 million hack, has over $200 million in outstanding DeFi debt to several counterparties, according to on-chain data. The largest debt involves a $92 million tether (USDT) loan issued by TrueFi, which is due to mature on Oct. 15.

Crypto Needs ‘Global Regulatory Framework,’ IMF Says

Cheyenne Ligon, CoinDesk

The International Monetary Fund (IMF) has called on financial regulators around the world to come together to develop a “global regulatory framework” for crypto assets.

Stablecoin Issuer Tether Ordered to Produce Documents Showing Backing of USDT

Sam Reynolds, CoinDesk

Tether has been ordered by a U.S. Judge in New York to produce financial records relating to the backing of USDT as part of a lawsuit that alleges Tether conspired to issue USDT as part of a campaign to inflate the price of bitcoin.

What the Child Poverty Rate Is Missing

Phil Gramm and John Early, The Wall Street Journal

House Speaker Nancy Pelosi and Senate Majority Leader Chuck Schumer assured us in July 2021 that expanding the child tax credit would “cut the nation’s child poverty rate in half.” Shortly thereafter, President Biden proclaimed that the expanded credit would “cut child poverty in half this year.”