Financial Services Report

Looking Ahead

Near Term

• The House starts up the Congressional Review Act process by teeing up votes on a handful of regulations, including on Dodd-Frank era SEC rule requiring disclosure of payments made for mineral extraction. 
• In the Senate, lawmakers will continue to work through President Trump’s Cabinet nominees, with floor votes scheduled for Secretary of State pick Rex Tillerson, and Transportation nominee Elaine Chao   At the committee level, votes for Treasury Secretary Mnuchin, Energy Secretary nominee Rick Perry, Office of Management and Budget Director nominee Mick Mulvaney, and Small Business Administrator nominee Linda McMahon are all expected.

Further Out

• Fed Chair Yellen comes to the Hill for the semi-annual testimony.  She will be on the Senate side on the 14^th of February and then on the House side the next day.
• President Trump is scheduled to speak before a joint session of Congress on February 28^th.

The Past Week

Legislative Branch
House
Trump Calls On Republicans to Push Forward with Dodd Frank Reform
On Thursday, while speaking at the Republican Congressional Retreat, President Trump reaffirmed his campaign pledge to overhaul the financial regulatory system.   Later, VP Pence echoed that sentiment saying that Congress needed to eliminate Dodd-Frank's "overbearing mandates…"   House Republicans are preparing to release an updated version of Chairman Hensarling's Financial CHOICE Act soon, and are expected to mark-up the bill by the middle of February.  Senate consideration is being slowed by the nominations process, but Chairman Crapo has indicated he would prefer modifications to Dodd-Frank that can gain bipartisan support.   
 
House to Target SEC Rule in CRA Rollback; McCarthy Vows to ‘Ax’ Rule
The House Rules Committee plans to vote this week on a resolution that would undo a Securities and Exchange Commission (SEC) rule through the procedures lined out by the Congressional Review Act (CRA). The rule would require companies to publish the payments they make to foreign governments as a part of their attempts to extract natural resources. Passed during the Clinton Administration, the CRA allows for Congress to undo any regulation finalized during the last 60 legislative days of the previous Congress through a resolution. On Wednesday, House Majority Leader Kevin McCarthy (R-CA) said in a Wall Street Journal op-ed that he would use the CRA to “ax” the Dodd-Frank mandated rule.  
 
Senate
Schumer Asks Trump to Label China Currency Manipulator
On Tuesday, Senate Minority Leader Chuck Schumer (D-NY) pressed President Trump to follow through with a campaign promise to label China as a currency manipulator. Talking with reporters, Schumer said that Trump “didn’t say no” and that he “hopes and prays he does.” Some economists fear that such a move could spark a trade war, but it is generally a position that party leaders on both sides have urged the U.S. to take.
 
Collins, McCaskill Re-Introduce Senior$afe Act; Hearing Scheduled This Week
On Wednesday, Senate Aging Committee Chair Sen. Susan Collins (R-ME) and Sen. Claire McCaskill (D-MO) reintroduced a bill geared to preventing the financial exploitation of seniors. Specifically, the bill would encourage banks and insurance companies, among others, to report suspected senior financial fraud and protect those companies from being sued as long as their reports are made in good faith. A hearing on the issue is scheduled for Wednesday this week in the Senate Aging Committees.
 
Warren, Carper Ask GSA for Info on Trump Hotel
On Monday, Sens. Tom Carper (D-DE) and Elizabeth Warren (D-MA) wrote a letter to the acting administrator of the General Services Administration (GSA) on how the agency is handling President Donald Trump’s ownership of the Old Post Office. According to the letter, Trump’s ownership is a “breach of the plain language of the lease agreement” and presents “unmanageable conflicts of interest for federal employees and President Trump. The senators requested all communications related to the issue.

Select Highlights from the Administration
 
Office of Management and Budget
Trump OMB Pick Slams CFPB Independent Funding Stream
During his confirmation hearing on Tuesday, Office and Management Budget (OMB) Director nominee Mick Mulvaney argued that the CFPB was a “sad, sick joke” and that it was “offensive” the CFPB is funded independently of the congressional appropriations process. In particularly fiery remarks, Mulvaney also said that the CFPB is not accountable to Congress and is being run by a man he considers to be a “dictator.”
 
Securities and Exchange Commission
SEC Names Piwowar Interim Chair
On Wednesday, the SEC named Republican Michael Piwowar its acting chair after previous chair Mary Jo White stepped down on Jan. 20. President Trump’s pick for the slot, Jay Clayton, is being vetted by the Senate and will likely appear before the Senate Banking Committee in early February.
 
Federal Reserve
Fed Posts First Piece of Faster Payments Report
On Thursday, the Federal Reserve released the first portion of its final report on faster payments, an initiative that originally began in 2015. The report provides a high-level summary of what the Fed has done, and what it plans to do, in the area. In a release tied to the report, Kansas City Fed President Esther George said that the Fed is “expecting to achieve a number of significant milestones in 2017.” Part two of the report is expected sometime later in 2017.
 
State-Level
State AGs File to Defend Constitutionality of CFPB
On Monday, seventeen attorneys general in various states across the country filed a motion to intervene in a U.S. appeals court case to defend the constitutionality of the CFPB. Speaking for the group, Connecticut Attorney General George Jepsen said the move was necessary because it is in question “whether the new administration will adequately defend the CFPB.”