Finance Brief: Week in Review & What’s Ahead


Week in Review

Financial cybersecurity

  • U.S. exchanges overseeing the new Consolidated Audit Trail have considered delaying the launch of the stock and options trade database, set for mid-November, because the project’s contractor hasn’t met key data security milestones.
  • The Federal Deposit Insurance Corp.’s inspector general reported that the regulator may have suffered more than 50 data breaches in 2015 and 2016, and in five of those incidents alone, more than 113,000 individuals’ personal information was compromised.
  • The Securities and Exchange Commission has found a vulnerability in its EDGAR corporate filing database that puts it at risk of “denial of service” attacks, which flood a network with requests and force it to shut down, according to a Sept. 22 internal document.

Equifax

  • Equifax Inc. said an additional 2.5 million U.S. consumers may have been affected by the massive breach of its data systems, bringing the total to 145.5 million people who had their personal information exposed.
  • The Government Accountability Office said the Internal Revenue Service had other options than awarding a $7.25 million, no-bid contract to Equifax three weeks after the company disclosed hackers had invaded its network. GAO officials said if the IRS determined U.S. interests were at stake, the unnamed initial winner of the contract could have begun work on the project while a challenge by the incumbent contract holder Equifax was being resolved.
  • Senators questioning Equifax’s former CEO Richard Smith attacked the business model of the credit-reporting industry and questioned why consumers don’t have more power over the data the companies collect on them.

Tax reform 

  • Nearly half (47 percent) of the respondents in a Morning Consult/Politico poll said they don’t believe that they will benefit from a cut in the corporate tax rate from 35 percent to 20 percent, which President Donald Trump and members of Congress say is key to job creation and economic growth.
  • New York Rep. Chris Collins (R) said it was “ironclad” that there will be no full repeal of the state and local tax deduction in final tax legislation, based on his conversations with GOP leaders.
  • The Senate Budget Committee passed a budget resolution on a 12-11 vote that will help open the fast-track reconciliation process for tax reform legislation if the resolution passes the Senate. The full Senate is expected to take up the resolution in two weeks and then reconcile it with the House version, which passed 219-206.

Banking

  • The Senate voted to confirm Randal Quarles as the Federal Reserve’s vice chairman for supervision, the first person to officially hold the role created after the financial crisis to enhance the Fed’s financial regulation efforts.
  • Wells Fargo & Co. Chief Executive Tim Sloan defended his role at the bank’s helm and the company’s improvements against a fierce line of questioning from the Senate Banking Committee and a call for his firing from Massachusetts Democrat Elizabeth Warren.
  • Wells Fargo said it will refund fees imposed on customers whose delays in completing their mortgage loan applications were primarily the bank’s fault.

Treasury Department & IRS

  • A Treasury Inspector General for Tax Administration report found that between 2004 and 2013 the Internal Revenue Service selected dozens of liberal-leaning groups for intensive review alongside conservative organizations. A 2013 report found that 96 groups with names referencing “Tea Party,” “Patriot” or “9/12” were selected for scrutiny between May 2010 and May 2012, prompting GOP lawmakers to accuse the Obama administration of targeting conservatives.
  • The Treasury Department’s Office of Inspector General found that Treasury Secretary Steven Mnuchin did not break the law by flying on military aircraft seven times since March at a cost of more than $800,000.

Consumer Financial Protection Bureau

  • The Consumer Financial Protection Bureau finalized a long-awaited regulation that would place new rules on small-dollar lenders in an effort to prevent consumers from being overwhelmed by increasing debt obligations.
  • The U.S. Chamber of Commerce, 13 other business associations and five financial trade associations sued the CFPB over its rule to weaken a company’s ability to make arbitration mandatory in consumer agreements, which would allow consumers to file class-action lawsuits against their credit card companies and other financial institutions.

What’s Ahead

  • The Senate will be out of session. The House will be in session.
  • On Thursday, the House Financial Services Committee will hear testimony from Secretary of Housing and Urban Development Ben Carson.
  • Republicans are also planning to continue their push for tax reform. House Speaker Paul Ryan will speak about the issue on Thursday at the Heritage Foundation.

Events Calendar (All Times Local)

Monday
Columbus Day — no events scheduled
Tuesday
AEI event on monetary policy 10 a.m.
Wednesday
AEI/CRN conference on housing risk 7:45 a.m.
The Hill event on tax reform with CEA’s Hassett, Reps. Neal and Roskam 8 a.m.
Bloomberg Government event on digital payments 8 a.m.
Peterson Institute event with OECD chief economist 8:30 a.m.
CSIS event on MDBs 9 a.m.
House Financial Services markup 10 a.m.
SEC open meeting 10 a.m.
House Agriculture hearing with CFTC’s Giancarlo 10 a.m.
Bipartisan Policy Center event with Rep. Neal 10 a.m.
Financial Services Roundtable event on tax reform 11:30 a.m.
House Ways and Means subcommittee hearing on Pacific trade 2 p.m.
Peterson Institute on Europe’s preparation for future financial crises 3:15 p.m.
Thursday
AEI/CRN housing risk conference 8 a.m.
Speaker Ryan speech at Heritage on tax reform 8:45 a.m.
House Financial Services hearing with HUD’s Ben Carson 9:30 a.m.
SEC Investor Advisory Committee meeting 9:30 a.m.
Carnegie Endowment for International Peace event on 20th anniversary of Asian financial crisis 11 a.m.
Friday
FDIC consumer research symposium 9:15 a.m.
Brookings event on regional development banks 2 p.m.
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