Jim Saksa

Rise of fintech weakens law to prevent lending discrimination
The number of bank branches with a Community Reinvestment Act obligation to provide loans and other services is falling

As online banking threatens to make in-person banking at brick-and-mortar branches as archaic as video rental stores, it may do the same to a 1977 law created to counteract decades of underinvestment in minority neighborhoods.

The Community Reinvestment Act was Congress’ response all those years ago to redlining — the practice of discriminatory lending that denied or offered more expensive credit to minorities and the poor and led to urban blight and white flight from city centers.

House may join money laundering, disclosure bills to gain votes
The two bills are expected to be merged and then will head to the House floor soon after Congress returns from recess

A pair of anti-money laundering bills are expected to be merged and head to the House floor soon after Congress returns from recess.

The House Financial Services Committee voted 55-0 in May to advance one of the bills, a measure co-sponsored by Democrat Emanuel Cleaver II of Missouri and Republican Steve Stivers of Ohio, that would update the framework used by federal investigators to combat money laundering.

Democrats seek info on CFPB official’s ties to Christian group
Paul Watkins spent three years at the conservative Alliance Defending Freedom

Updated | A group of Democrats, including presidential hopeful Sen. Elizabeth Warren of Massachusetts, are continuing to pressure the Consumer Financial Protection Bureau over a senior official’s ties to a conservative Christian group.

In a letter sent Wednesday to CFPB Director Kathleen Kraninger, Warren — along with Reps. Raja Krishnamoorthi of Illinois, Ayanna S. Pressley of Massachusetts and Katie Porter of California — demanded documents related to hiring Paul Watkins as director of the Office of Innovation, which has the power to grant fintech firms limited immunity from consumer protection laws.

Sherrod Brown uses stock buyback bill announcement to give fellow Dems campaign advice

Senator Sherrod Brown of Ohio wants his Democratic colleagues running for president to plagiarize his favorite line.

“I want our presidential candidates to talk more about the dignity of work,” he said at a press conference Wednesday to announce a new bill to force public companies to pay workers a special “dividend” whenever they increase the amounts returned to shareholders.

GOP senators uneasy with Fed pick on gold, deposit insurance
Questioning a return to the gold standard and eliminating federal deposit insurance

Republican senators have expressed concerns about Judy Shelton, one of President Donald Trump’s picks for the Federal Reserve Board, over her support for a return to the gold standard and eliminating federal deposit insurance, but, so far, are holding back from publicly opposing her nomination.

Trump tweeted his intention in early July to nominate Shelton and Christopher Waller to the two vacant seats on the seven-member Fed board. Waller, an economist at the Federal Reserve Bank of St. Louis, is seen by most observers as a conventional pick, but Shelton’s decades-long advocacy for resurrecting the Bretton Woods monetary system has put her at odds with most economists and some Republican senators. The system pegged the dollar to the price of gold and other currencies to the dollar.

Senate Banking members take skeptical look at cryptocurrencies
Blockchain firms have tried selling lawmakers on the potential for dramatically reduced transaction costs.

Concerns over data privacy and skepticism about just how unique and beneficial cryptocurrencies and other blockchain-based digital assets could be dominated Tuesday’s Senate Banking Committee hearing on regulating the new technology.

“This new digital currency and blockchain technology is a very real — and potentially helpful — innovation,” said Chairman Michael D. Crapo, R-Idaho. “It’s also potentially harmful as there can be some serious risk involved in it.”

Lawmakers hint at regulatory models for Facebook cryptocurrency
Libra: ‘Which is it, fish or fowl?’

House members suggested Wednesday that Facebook Inc.‘s proposed cryptocurrency could be deemed an exchange-traded fund, a currency or a commodity, all of which could require some degree of regulatory oversight.

“What we’re struggling with is: What are you?” said Democratic Colorado Rep. Ed Perlmutter summing up a four-hour House Financial Services Committee grilling of a company executive about the proposed cryptocurrency known as Libra.

Facebook cryptocurrency stirs worry and support in both parties
Top Democrat urges Fed and regulators to protect consumers and economy from Facebook’s ‘monopoly money’

Facebook Inc. got a preview Wednesday of what to expect next week when executives come to testify about plans to launch Libra, a digital currency and online payment system.

At a hearing Wednesday morning, Democrats and Republicans on the House Financial Services Committee peppered Federal Reserve Chairman Jerome Powell with questions about how the central bank would respond to Libra.

Fed’s Powell says Trump couldn’t push him to resign
The Fed chairman also said he shared concerns among lawmakers about Facebook Inc.’s proposal to launch a cryptocurrency

Federal Reserve Chairman Jerome Powell told a House panel Wednesday that he would not resign if President Donald Trump ordered him to step down.

Powell, who has been excoriated by Trump on Twitter for his management of the Fed and the nation’s monetary policy, told House Financial Services members he would serve out his term. He made his comments during his semi-annual testimony to the committee.

GOP senators sound optimistic about Trump’s new Fed picks
They’re at least faring better than the president’s last two picks

A week after President Donald Trump tweeted his intention to nominate Judy Shelton and Christopher Waller to the Federal Reserve Board, GOP senators are expressing cautious optimism about both picks, despite Shelton’s unorthodox views on monetary policy.

They’re at least better than the president’s previous two picks — Stephen Moore and Herman Cain dropped out before they were officially nominated — said Sen. Richard C. Shelby, R-Alabama. “Well, we haven’t evaluated them yet, but the previous two were lacking in a lot of things,” he said.

Financial Services bill loaded with hot-button issues may signal trouble ahead
CQ Budget Podcast, Episode 116

House Democrats passed the Financial Services spending bill that includes some controversial provisions, says CQ Roll Call’s banking reporter Jim Saksa. Those include blocking money for a border wall, increasing funding to enforce sanctions on Iran and allowing the District of Columbia to fund abortions.

House panel advances anti-money laundering bill with only some GOP support
Backers hope it’ll be enough to move in the Senate

After holding an anti-money laundering bill for a month in the hopes of winning over the committee’s top ranking Republican, the House Financial Services Committee advanced it without him on Wednesday, in a move that could ultimately undermine the odds of passing it through the Senate.

The legislation would require corporations and limited liability companies to report who actually owns them to the Treasury Department’s Financial Crimes Enforcement Network, or FinCEN, in the hopes of curbing the use of anonymous shell companies for hiding illicit assets from criminal investigators and tax officials.

Tester pushes Fed nominee on hemp regulation

A Federal Reserve Board nominee faced some sharp questioning Wednesday over the Fed’s treatment of hemp farming.

When Montana Democratic Sen. Jon Tester asked Michelle Bowman, a nominee of President Donald Trump for another Fed term, if Fed regulators had told banks that they could work with hemp growers and suppliers who work with them, Bowman responded, “We have not told them that they cannot bank them.”

For 2020 Democrats, a bull market for bashing Wall Street?
Sanders, Warren hope bashing big banks still resonates with voters

In 2016, a New York City real estate developer who inherited hundreds of millions of dollars managed to win the presidency after convincing thousands of Rust Belt voters that the daughter of a textile salesman was an untrustworthy elitist because she gave a few paid speeches to a Wall Street investment bank. Four years later, some of the nearly two dozen Democrats running for president are retreading the populist path that runs roughshod over Wall Street.

The candidates hope bashing big banks still resonates with voters, but they’re also broadening the message to include other economic issues that divide the haves from the have-nots. “The last three presidential elections have all been Main Street versus Wall Street, and — increasingly — about the Rust Belt versus Wall Street,” said Andy Green, managing director of economic policy at the Center for American Progress.

FHFA head sees plan this year to change Fannie, Freddie status
Mark Calabria also wants Congress to act

Federal Housing Finance Agency Director Mark Calabria said he hopes to have a roadmap for ending the federal conservatorship of Fannie Mae and Freddie Mac by the end of the year.

Speaking at a National Association of Realtors event Tuesday, Calabria said it was his job as FHFA director to develop a plan for recapitalizing and releasing the government-sponsored entities, or GSEs. The two mortgage giants have been under federal control since they accepted bailouts in 2008 in the wake of the housing market collapse.

Fintech lobby spending targets cryptocurrency taxation
Firms lobbying on fintech spent more than $42 million in first quarter

Lobbying disclosures for the first quarter of 2019 show a wide swath of industries and advocacy groups focusing on financial technology issues, including the Association of National Advertisers, Intuit, Mastercard, Alibaba, FreedomWorks, IBM, the Entertainment Software Association and U.S. Public Interest Research Group.

More than half of the 80 firms that reported lobbying on fintech in the first quarter listed blockchain and cryptocurrencies, including tax elements of the latter, among their biggest concerns. Combined, more than 80 firms lobbying on fintech reported spending more than $42 million in the first quarter of 2019.

Bill cracking down on LLCs used for tax evasion and money laundering faces obstacles
The bill would require corporations and limited liability companies to tell the Treasury who really owns them

After bouncing around Congress for over a decade, a bill to crack down on anonymous shell companies used in money laundering and tax evasion may advance this year, having attracted support from some strange bedfellows, including banks, unions, the national security community, human rights advocates, environmentalists, multinational corporations, law enforcement and the Trump administration.

Democratic Rep. Carolyn B. Maloney is expected to introduce the bill with her fellow New Yorker, Republican Rep. Peter T. King, as Congress returns from recess, and it could go to markup as soon as May 8.

CFPB to focus on protecting consumers, not enforcing laws on financial institutions
New agency Director Kathy Kraninger gave her first public speech as director at the Bipartisan Policy Center

In her first public speech as director of the Consumer Financial Protection Bureau, Kathy Kraninger said the agency would focus on supervising and working with financial institutions on protecting consumers, rather than enforcing laws against them.

Kraninger announced Wednesday that the CFPB would soon propose rules to update one of the nation’s older consumer protection statutes, which prohibits abusive practices from debt collectors. One proposal would be a clear limit on the number of phone calls per week debt collectors could make.

A blockchain bill, backed by industry, may tie SEC’s hands
The bill would provide a safe harbor from federal securities regulations for digital currencies and other blockchain-based products

Even as the nation’s infant blockchain industry lines up in support of a new bipartisan bill to exempt digital tokens from Securities and Exchange Commission oversight, others warn about the dangers of Congress making the situation worse.

The bill from Reps. Warren Davidson, an Ohio Republican, and Darren Soto, a Florida Democrat, would provide a safe harbor from federal securities regulations for digital currencies and other blockchain-based products. But outside of the young sector’s backers, some worry that the bill goes too far in its current form.

Herman Cain picks up more GOP opposition to his being on the Fed
Kevin Cramer joins three other Republicans in announcing plans to vote against him

Sen. Kevin Cramer said Thursday he would vote against giving Herman Cain a seat on the Federal Reserve Board, likely dooming the nomination before the president officially makes it.

“If I had to vote right now, there’s no way I could vote for him,” Cramer told CQ Roll Call. “I know more things about him that’d keep him out than would qualify him.”