• The Treasury’s Financial Crimes Enforcement Network, the Federal Reserve, the Federal Deposit Insurance Corp., the Office of the Comptroller of the Currency and the Conference of State Bank Supervisors clarified that banks aren’t required to report suspicious activity reports on customers who produce hemp. Banks are still required to report suspicious activity regarding the hemp business, which was removed last year from a list of federally controlled substances. (The Wall Street Journal)

• Former vice president and leading Democratic presidential candidate Joe Biden plans to fund $3.2 trillion in policy proposals with higher taxes on the wealthy and corporations, especially giants such as Amazon.com Inc. and Netflix Inc. that have reported paying no federal income taxes in recent years. His team expects the taxes would raise $400 billion in a decade, according to a copy of the proposal. (Bloomberg)

• At a training conference for financial aid officers in Reno, Nev., Education Secretary Besty DeVos said that the government’s $1.5 trillion student loan portfolio, which she called an “untamed beast,” should be spun off into its own federal agency. She said the Education Department’s Federal Student Aid office is subject to the “ever-changing political whims of Washington.” (The New York Times)

U.S., China Move Closer to Trade Deal Despite Heated Rhetoric
Jenny Leonard and Shuping Niu, Bloomberg

The U.S. and China are moving closer to agreeing on the amount of tariffs that would be rolled back in a phase-one trade deal despite tensions over Hong Kong and Xinjiang, people familiar with the talks said.

Trump administration willing to drop USMCA pharma provisions
James Politi et al., Financial Times

Bid to win support from Democrats in deal seen as template for future negotiations.

Mexico Resists Democrats’ Labor Push on Trade Pact
Anthony Harrup and Williams Mauldin, The Wall Street Journal

Mexico’s government and business leaders are voicing opposition to a key demand of U.S. Democratic lawmakers in a renegotiated North American trade pact, jeopardizing the deal’s passage this year. Congressional Democrats, blaming Mexico for not living up to labor promises in the current North American Free Trade Agreement, have asked the Trump administration to beef up labor rules in its new version of the deal, known as the U.S.-Mexico-Canada Agreement, or USMCA.

Fed Adds $95.56 Billion in Short-Term Liquidity to Markets
Michael S. Derby, The Wall Street Journal

The Federal Reserve Bank of New York added $95.56 billion in temporary liquidity to financial markets Tuesday. The intervention came in two parts. 

CFPB proposes expanding safe harbor in remittance rule
Kate Berry, American Banker

The Consumer Financial Protection Bureau is proposing to expand a safe harbor in its remittance rule to more institutions. The agency announced changes Tuesday meant to reduce compliance costs and allow some institutions to provide estimates rather than disclose exact prices, fees and exchange rates for international money transfers.

Stocks Rally on Fresh Hopes for U.S.-China Deal: Markets Wrap
Robert Brand, Bloomberg

U.S. equity futures advanced with European stocks after a news report that China and America were moving closer to a trade deal despite, heated rhetoric. Treasuries and gold slipped.

What ongoing repo turmoil means for banks
John Heltman, American Banker

The Federal Reserve’s injection of billions of dollars starting in September seems to have stabilized an unsteady repurchase agreement market, but the banking industry could feel the repercussions of that intervention for some time. On Sept. 16, the interest rate on overnight repo agreements spiked, surging from around 2% to over 10% before the Fed stepped in. 

JPMorgan Among Banks Added to ECB Oversight as Brexit Looms
Nicholas Comfort, Bloomberg

The European Central Bank has started supervising some of the world’s top securities firms’ businesses in the region, as they build up their operations across the European Union ahead of Brexit. European units of Goldman Sachs Group Inc., JPMorgan Chase & Co., Morgan Stanley and UBS Group AG entered the ECB’s oversight this year as a result of their shift of operations from the U.K. to the euro area, according to a statement on Wednesday.

FDIC’s McWilliams ‘inclined’ to join OCC on CRA but still has concerns
Hannah Lang, American Banker

Federal Deposit Insurance Corp. Chair Jelena McWilliams said she is “inclined” to back a forthcoming proposal to revamp the Community Reinvestment Act, but added she still has some concerns about how the plan will affect CRA assessment areas and compliance metrics. The Office of the Comptroller of the Currency will reportedly move ahead with a proposal to reform the 40-year-old law that grades banks on their loans to the communities they serve. 

Fidelity’s head of $2.8tn asset management arm to retire
Robin Wigglesworth, Financial Times

Steve Neff to be replaced by head of global asset management Bart Grenier.

In Zero-Fee Era, Wrestlers and Astronauts Help Funds Fight Back
Claire Ballentine, Bloomberg

Smaller asset managers are getting creative as they look to take the fight to the likes of BlackRock. Meet the Boa Constrictor. 

They Ended Up in Decrepit Housing in Newark. Is New York to Blame?
Nikita Stewart, The New York Times

Julie Rodriguez’s apartment in Newark was so cold that the water in her dog’s bowl froze. At times, Sha-kira Jones’s apartment did not have heat or electricity.

Corporate Tax Chiefs Voice Concerns About Global Minimum Tax Proposal
Nina Trentmann, The Wall Street Journal

Tax chiefs at international companies are voicing concerns about a proposal that would introduce a global minimum tax and could result in higher tax payments for some companies. The proposal is part of an effort by the Organization for Economic Cooperation and Development to revamp the international tax system by expanding and reallocating the global tax pie.

How these multimillionaires are avoiding a 40% tax hit
Darla Mercado, CNBC

If you’re sitting on a few million dollars and you want to save on taxes, consider giving some of it away. The Tax Cuts and Jobs Act roughly doubled the amount an individual can transfer to others without being subject to the 40% gift and estate tax.

Britain’s Johnson backs digital tax despite Trump’s ire
Paul Sandle, Reuters

British Prime Minister Boris Johnson said he would press ahead with new taxes on U.S internet giants like Facebook and Google, putting him at odds with U.S. President Trump who has threatened retaliation against France over its digital tax plans. “On the digital services tax, I do think we need to look at the operation of the big digital companies and the huge revenues they have in this country and the amount of tax that they pay,” Johnson said on Tuesday, according to a BBC report.

Need to Pay the Babysitter? Don’t Even Think About Using Cash
Julie Jargon, The Wall Street Journal

When Oliver Hicks finished helping his family with yard work last summer, his dad handed him $50 in cash. Oliver didn’t want it.

California’s Fintech Startups Are Invading New York
Julie Verhage, Bloomberg

When two Irish brothers started Stripe Inc. together in 2010, there was little question about where they should put their headquarters. It had to be California.

Winklevoss crypto-exchange hires Starling Bank co-founder
Cat Rutter Pooley, Financial Times

The UK executive will spearhead the exchange’s push into Europe.

A Message from The Clearing House:

Recently, The Clearing House conducted a survey to dive deeper into consumer perceptions about how financial apps access, collect, use, store and share their data. The survey poll included nearly 4,000 U.S. banking consumers who have accounts, loans, and mortgages with a financial services provider. See findings.

Let’s Create the Right Guardrails to Protect Consumers in the Small Dollar Loan Market
Jared Kaplan, Morning Consult 

Too many Americans are living without savings. Forty percent of Americans can’t cover a $400 emergency through cash, savings or even by using a credit card.

Let’s rethink how CDFIs are examined
Eugene Ludwig, American Banker

Walk down a major thoroughfare in any major American city there’s likely a number of colorful and brightly lit bank branches. It’s no mystery why. 

How Poverty Ends
Abhijit V. Banerjee and Esther Duflo, Foreign Affairs

For all the worries today about the explosion of inequality in rich countries, the last few decades have been remarkably good for the world’s poor. Between 1980 and 2016, the average income of the bottom 50 percent of earners nearly doubled, as this group captured 12 percent of the growth in global GDP.

Did Trump’s Trade War Impact the 2018 Election?
Emily Blanchard et al., Peterson Institute for International Economics

Republican candidates lost support in the 2018 congressional election in counties more exposed to trade retaliation but saw no commensurate electoral gains from US tariff protection. The electoral losses were driven by retaliatory tariffs on agricultural products and were only partially mitigated by the US agricultural subsidies announced in summer 2018.