• Mortgage lenders and fintech firms are negotiating with the Consumer Financial Protection Bureau to resolve possible settlements early due to concerns that under a potential Biden administration, the penalties might be more severe, according to people with knowledge of their cases. People familiar with the matter said that the Joe Biden campaign anticipates that under his administration, the CFPB would issue more fines and attempt to recover more money for consumers, specifically ensuring that borrowers who have temporarily skipped mortgage payments due to the coronavirus pandemic aren’t foreclosed on next year. (The Wall Street Journal)

• The Federal Reserve, Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency approved the net stable funding ratio after it was proposed four years ago, which requires that the 20 largest U.S. lenders be able to rely on stable funding sources in case of a yearlong liquidity crunch. The final rule differs from the original proposal in that it gives Treasurys and cash reserves the same treatment, getting rid of an incentive for banks to shed Treasurys under pressure. (Bloomberg)

• Fed Vice Chair for Supervision Randal Quarles, speaking in his capacity as head of the Financial Stability Board, said the market turmoil caused by the pandemic shows that the nonbank financial sector is “significantly more fragile” than the banking sector. Quarles didn’t make any policy recommendations, but he said that the FSB is examining the issue and would be making suggestions soon. (Reuters)

• After Tuesday’s discussions on a new economic relief package, both the White House and Democratic negotiators said they would continue the talks ahead of the Nov. 3 election, following comments by Senate Majority Leader Mitch McConnell (R-Ky.) at a Republican lunch that he had warned the White House to not divide Senate Republicans just before the election, and that a $2 trillion relief package would do so, according to people familiar with the comments. In a letter to House Democrats last night, Speaker Nancy Pelosi (D-Calif.) said that, while she hoped to be able to determine if a deal would be possible by the end of the day, the 45-minute conversation with Treasury Secretary Steven Mnuchin and the deadline “enabled us to see that decisions could be reached and language could be exchanged, demonstrating that both sides are serious about finding a compromise.” (The Wall Street Journal)

The Fed’s $4 Trillion Lifeline Never Materialized. Here’s Why.
Jeanna Smialek, The New York Times

As companies furloughed millions of workers and stock prices plunged through late March, Treasury Secretary Steven Mnuchin offered a glimmer of hope: The government was about to step in with a $4 trillion bazooka. The scope of that promise hinged on the Federal Reserve. The relief package winding through Congress at the time included a $454 billion pot of money earmarked for the Treasury to back Fed loan programs.

Many Workers Gave Up Looking for Jobs Across the U.S. in September
Gwynn Guilford, The Wall Street Journal

Workers gave up looking for jobs across the U.S. in September, with the size of the labor force shrinking in more than half of the 30 states in which unemployment rates fell last month, Labor Department data released Tuesday showed. Declining unemployment rates in states across the U.S. masked signs of labor-market deterioration. 

Big U.S. Treasuries Wagers Bet Against Election Fireworks
Stephen Spratt and Edward Bolingbroke, Bloomberg

The latest big options wagers on Treasuries are bucking the trend of betting on a tempestuous U.S. election. One trader spent around $2.5 million on Tuesday on a bet that Treasuries will experience just modest declines following the Nov. 3 vote. 

Trump Records Shed New Light on Chinese Business Pursuits
Mike McIntire et al., The New York Times

President Trump and his allies have tried to paint the Democratic nominee, Joseph R. Biden Jr., as soft on China, in part by pointing to his son’s business dealings there. Senate Republicans produced a report asserting, among other things, that Mr. Biden’s son Hunter “opened a bank account” with a Chinese businessman, part of what it said were his numerous connections to “foreign nationals and foreign governments across the globe.”

Bonds Drop on Stimulus Bets; Europe Stocks Slide: Markets Wrap
Todd White, Bloomberg

Treasuries dropped alongside the dollar amid speculation that Washington lawmakers have made some progress on a stimulus package to be financed by trillion-dollar borrowing.

Blankfein and Cohn Must Testify in Goldman Sex-Bias Case
Bob Van Voris, Bloomberg

Two former top Goldman Sachs executives must testify in one of the biggest gender-discrimination cases in Wall Street history, a federal judge ruled. U.S. Magistrate Judge Robert W. Lehrburger on Tuesday denied a move by the bank to block pre-trial depositions of former Chief Executive Officer Lloyd Blankfein and former President Gary Cohn, ruling in favor of a group of women who claim they were denied equal pay and promotions by the bank.

Two top Morgan Stanley commodities traders lose jobs over use of WhatsApp
Laura Noonan, Financial Times

Wall Street continues clampdown on communications channels it cannot monitor.

Goldman Sends Some London Workers Home After Coronavirus Cases
Elaine Chen and Tom Metclaf, Bloomberg

Goldman Sachs Group Inc. sent some workers at its London office home after two employees tested positive for Covid-19. The staffers work on the fourth and fifth floors of Plumtree Court, and their close contacts have been notified, according to a memo sent to staff last week.

Citi Wins Round Against Creditors Over $900 Million Error
Chris Dometsch, Bloomberg

Citigroup Inc. won a round in a legal battle over $900 million it accidentally sent to Revlon Inc. creditors, as a federal judge ruled the bank doesn’t have to produce records of communications with firms that returned the funds. In August, Citigroup sued a dozen Revlon creditors it said hadn’t returned their share of the transferred funds.

SEC plan to cut fund disclosures faces almost unanimous opposition
Ortenca Aliaj and Eric Platt, Financial Times

Higher threshold for reporting stock holdings would benefit activist investors, US markets regulator told.

Leveraged Buyouts Come Roaring Back After Coronavirus-Related Lull
Miriam Gottfried, The Wall Street Journal

The market for leveraged buyouts has sprung back to life after private-equity firms finished triaging their coronavirus-stricken portfolio companies and shifted attention back to their mounting cash piles. Buyout firms spent the bulk of the second quarter battened down as they assessed the economic damage of the shutdown on the companies they own, particularly those in hard-hit sectors such as live entertainment, travel, retail and energy. 

Apollo Board to Examine Leon Black’s Ties to Jeffrey Epstein
Heather Perlberg, Bloomberg

Apollo Global Management Inc. board members are investigating co-founder Leon Black’s ties to disgraced financier Jeffrey Epstein after more information emerged this month about their longtime business dealings. Black asked the board’s conflict committee to hire counsel and undertake a thorough review to independently confirm his past descriptions of a professional relationship with Epstein, a company spokesman said in an emailed statement late Tuesday.

Risky Loans for Buyouts Strike Hot Market Before U.S. Election
Jeannie Amodeo, Bloomberg

High-risk U.S. borrowers are rushing to lock down cheap funding for buyouts and dividends ahead of any potential election-related volatility. Acquisitions account for about a third of this month’s leveraged loan volume, up from 13% in September. 

Judge blasts DeVos’ sweeping denials of student loan relief claims as ‘disturbingly Kafkaesque’
Michael Stratford, Politico 

A federal judge scrapped a settlement Tuesday over the Trump administration’s slow processing of loan forgiveness for borrowers who have accused their colleges of fraud, ruling that Education Secretary Betsy DeVos undermined the deal. U.S. District Judge William Alsup said in a sharply worded decision that DeVos undercut the settlement by denying large swaths of the claims without sufficient explanation.

New Jersey sues student loan servicer Navient, alleging ‘deceptive, misleading’ tactics
Sylvan Lane, The Hill

The state of New Jersey sued Navient on Tuesday, alleging that the student loan servicing company forced borrowers to pay and owe more money than necessary through misleading and deceptive practices. In a lawsuit filed by New Jersey’s attorney general and division of consumer affairs, the state accused Navient of steering borrowers into loan forbearance — a temporary pause in payments due on a loan — and away from income-driven repayment plans, which typically extend the term and reduce the monthly payment owed.

CFPB indefinitely extends QM Patch
Kelsey Ramírez, HousingWire

At a session during the Mortgage Bankers Association’s Annual event, Consumer Financial Protection Bureau Director Kathy Kraninger announced the extension of the Qualified Mortgage Patch until a new QM Patch is decided on. “To make it clear to the market that we are going to have a smooth transition to the new QM, the patch will be available until the mandatory compliance date for the new QM,” Kraninger said.

Apartment Rents Are Plunging in the World’s Richest Cities. It’s Time For You to Negotiate
Emily Cadman and Charlie Wells, Bloomberg

In the world’s big financial centers — from New York to Toronto to London to Sydney — rents for inner-city apartments are plunging. International students who normally bolster demand are stuck at home and young renters — the most mobile group in real estate — are finding fewer reasons to pay a premium to live in what is, for now, no longer the center of things.

Business Owners Speed Up Planned Sales Over Biden Tax Hike Fears
Lydia O’Neal, Bloomberg Tax

Some business owners looking to sell their companies are accelerating deal timelines to avoid a potentially bigger tax bite in case Democrats win the White House and Senate in November. Former Vice President Joe Biden—who is leading President Donald Trump in many swing state polls—wants to raise the current 20% tax rate on long-term capital gains to the rate applied to ordinary income for those making more than $1 million.

Analysis: U.S. investment bankers’ new pitch – Biden’s tax hike
Joshua Franklin and Chibuike Oguh, Reuters

Investment bankers keen to win lucrative assignments have a new pitch for U.S. corporate owners: hire us to sell your company now or pay at least twice as much in taxes if Democratic presidential candidate Joe Biden has his way. Biden has proposed raising the capital gains tax rate from 20% to 39.6% for those making over $1 million. 

JPMorgan Chase takes on Square and PayPal with smartphone card reader, faster deposits for merchants
Hugh Son, CNBC

JPMorgan Chase is making a play to sell more services to millions of American small business owners, pushing into an area pioneered by fintech firms including Square, PayPal and First Data, CNBC has learned. The bank is rolling out a checking account that is paired with a new fintech-inspired service called QuickAccept, according to JPMorgan executives. QuickAccept lets businesses take card payments within minutes, either through a mobile app or a contactless card reader, and users will see sales hit their Chase accounts on the same day.

Bitcoin Pushes Past $12,000 Mark for First Time Since September
Vildana Hajric, Bloomberg

Bitcoin climbed above $12,000 for the first time in more than a month, breaching a key level that chartists and advocates say might set the largest cryptocurrency up for further gains. The digital token increased as much as 2.7% to $12,052 in New York on Tuesday, before retreating slightly from the peak for the day. That’s Bitcoin’s highest level since Sept. 2.

The Lack of Fiscal Aid Won’t Wreck Consumer Spending
Tim Duy, Bloomberg

In the world of investing, self-storage properties are about as bland as it gets. Then again, U.S. consumers are going to need a place to store the mountains of stuff they bought during the pandemic. 

Congratulations, You’ve Won the White House. Now What?
Thomas B. Edsall, The New York Times

In the short term, should Joe Biden win the election and move into the White House, he would take office with a Democratic Party unified in its opposition to all things Trump. The question is how long would that last before leaders of every liberal interest group circling the new administration begin to get restless.

Millionaires Speak: What Drives Their Personal Investment Decisions?
Svetlana Bender et al., The National Bureau of Economic Research

We survey 2,484 U.S. individuals with at least $1 million of investable assets about how well leading academic theories describe their financial beliefs and decisions. The most important factors determining portfolio equity share are professional advice, time until retirement, personal experiences, rare disaster risk, and health risk