Morning Consult Finance: IRS Whistleblower Complaint Said to Raise Concerns Over Interference in Audits of Trump or Pence


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  • An Internal Revenue Service ­official filed a whistleblower complaint in which he said he was told that at least one Treasury Department political appointee tried to illegally interfere with the audit of the tax returns of President Donald Trump or Vice President Mike Pence, according to multiple people familiar with the document. The whistleblower, who confirmed in an interview that he is a career IRS official, said he filed the complaint on July 29, and people briefed on the filing confirmed for the first time that the complaint was tied to allegations of auditing interference by at least one Treasury official. (The Washington Post)
  • The Federal Reserve said it has set a vote for Oct. 10 on a proposal that would ease liquidity and capital regulations for large U.S. banks that could lower regulatory costs for regional lenders with less than $700 billion in assets. The Fed also said it would move forward with plans to require the largest U.S. banks to provide so-called living will plans every four years rather than the current annual requirement. (The Wall Street Journal)
  • New York Attorney General Letitia James filed a federal lawsuit against the Pennsylvania Higher Education Assistance Agency, the sole servicer of the federal government’s Public Service Loan Forgiveness Program, accusing the company, also known as FedLoan, of causing financial harm to borrowers by miscounting qualifying payments, not applying its policies consistently and leaving borrowers waiting as long as a year when they attempted to get the servicer to resolve mistakes. Latest data from the Education Department shows the forgiveness program has rejected 99 percent of applicants. (The New York Times)

Chart Review

Events Calendar (All Times Local)

10/04/2019
Fed Listens: Perspectives on Maximum Employment and Price Stability featuring opening remarks from Fed Chair Jerome Powell 2:00 pm
10/08/2019
PIIE event: “Global Economic Prospects: Fall 2019” 12:15 pm
10/07/2019
Brookings event: “Student loans: A look at the evidence” 10:00 am
View full calendar

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General

Fed’s Richard Clarida Says Officials Will Do What It Takes to Sustain Growth
Michael S. Derby, The Wall Street Journal

Federal Reserve Vice Chairman Richard Clarida said Thursday that the central bank will do what it takes to keep the longest U.S. economic expansion alive.

Five takeaways from Warren’s sweeping labor proposal
Rebecca Klar, The Hill

Sen. Elizabeth Warren (D-Mass.), a leading candidate for the Democratic presidential nomination, released a sweeping labor proposal Thursday that aims to bolster worker protections and make it easier for unions to assert their rights.

New tariffs on EU food will boost prices, cost U.S. jobs: industry
David Shepardson, Reuters

New 25% U.S. tariffs on Italian cheese, French wine, Scotch whisky, British biscuits, Spanish olives and thousands of other European food products will lead to higher prices ahead of the holiday season and cost American jobs, trade groups said on Thursday.

EU likely to respond to U.S. tariffs with own measures: Germany’s Maas
Tassilo Hummel, Reuters

The European Union is likely to take retaliatory measures in response to new U.S. tariffs on European goods, German Foreign Minister Heiko Maas told newspapers in remarks published on Friday.

A California City Tested Universal Basic Income. Here’s How Recipients Spent the $500 in Free Money
Adam Beam, The Associated Press

The first data from an experiment in a California city where needy people get $500 a month from the government shows they spend most of it on things like food, clothing and utility bills.

U.S. Stock Futures Slip, Bonds Edge Up Before Jobs: Markets Wrap
Yakob Peterseil, Bloomberg

U.S. equity futures drifted lower and European stocks pared a gain as investors awaited jobs numbers for clues on whether the Federal Reserve will cut rates this month to bolster the world’s largest economy. Government bonds including Treasuries edged higher.

Banking

New York Fed Adds About $33.6 Billion to Financial System
Robert Barba, The Wall Street Journal

The Federal Reserve Bank of New York added $33.55 billion to the financial system Thursday by using the market for repurchase agreements, or repo, to relieve funding pressure in money markets.

Bank executives seek allies in fight for gender equality
Laura Alix, American Banker

No executive rises to the top on his or her own. That was a consistent theme at American Banker’s 17th annual gala late Thursday recognizing the most powerful women in banking and finance.

Impeachment fight derailing banking bills? Think again
Neil Haggerty, American Banker

Despite partisan tumult over the impeachment inquiry into President Trump, lobbyists and industry analysts see two legislative priorities for banks potentially staying above the political fray.

Wall Street pulled its financing. Stocks have plummeted. But private prisons still thrive.
Renae Merle and Tracy Jan, The Washington Post

Over the past year, private prison giants CoreCivic and GEO Group have been abandoned by Wall Street and seen their stock prices plummet.

HUD’s new housing rule has an A.I. loophole that’s bad for America
Lisa Rice and Douglas Merrill, CNBC

There is growing support for the idea that artificial intelligence can help remove human bias from situations where institutional discrimination has persisted for decades.

Financial Products and Investments

Lazard Asset Management Laying Off As Much As 7% of Global Workforce
Juliet Chung and Justin Baer, The Wall Street Journal

Lazard Ltd. is cutting up to 7% of its employees in its asset-management division and closing some investment funds by year’s end, people familiar with the matter said, amid a tougher climate for money managers.

Square Opens Services to All CBD Businesses
Chloe Aiello, Cheddar

Square’s CBD program is now open for business. The financial services company on Thursday debuted its Early Access program, opening its services to all CBD sellers following the launch of a pilot program for CBD vendors in May.

Housing and GSEs

Mortgage rates hold steady but could be primed to move lower
Kathy Orton, The Washington Post

Mortgage rates barely budged this week despite downward pressure from lackluster economic news.

Taxes

Which are the least tax-friendly states in America? California doesn’t crack the top 10, but Illinois sure does
Catey Hill, MarketWatch

This week, the personal-finance publication Kiplinger’s released its list of the most — and least — tax-friendly states in America. To draw its conclusions, it used a hypothetical couple with two kids and $150,000 in income a year plus $10,000 in dividend income, and then looked at the income-, property- and sales-tax burden that family would face.

Financial Technology

An Early Bitcoin Millionaire Loses ‘Love for the Industry’
Olga Kharif, Bloomberg

As Bitcoin crashed 20% in late September, Jered Kenna — one of the first Bitcoin millionaires — returned to Twitter after a three-year hiatus with a startling statement, saying he “lost the love for the industry.”

Opinions, Editorials and Perspectives

Work Flexibility Key to Meeting Employer Demands in a USMCA Economy
Tana Greene, Morning Consult

Hiring a workforce in a USMCA-economy is going to take innovative approaches to bridge this ever-growing gap between employees who want to work, and the employers who seek them.

Research Reports

Unequal Access to Credit: The Hidden Impact of Credit Constraints
Federal Reserve Bank of New York

The Credit Insecurity Index is a new tool that helps to provide a more comprehensive view of credit access and community credit health. By moving beyond metrics that traditionally focus on residents without a credit file or score, this Index incorporates an additional assessment of residents who are “credit constrained,” that is, unlikely to obtain credit at choice to manage emergencies, take advantage of opportunities, or invest in one’s future.

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