THE GOLDEN APPLE: Your report on the latest discord from The Eris Group
July 13, 2018
Don’t drink the water — It feels a little too appropriate, but much of the District of Columbia is ending the week on a boiled-water alert. They say it’s just an excess of caution, and they haven’t identified any specific toxins, but we say it’s safer to stick to whiskey.
Task Force on Market Integrity and Consumer Fraud announced — The Department of Justice, the Bureau of Consumer Protection, the Securities and Exchange Commission and the Federal Trade Commission have formed a new Task Force to provide guidance for the investigation and prosecution of a wide range of financial crimes, including cyber-fraud, elder abuse, procurement and grant fraud, tax fraud, money laundering, and digital currency fraud. Deputy Attorney General Rod Rosenstein will chair the task force. At a press briefing on Wednesday, he said the goals were to coordinate agency activities and give companies incentives to cooperate with investigations and report misconduct. 
FTC, BCFP discuss new credit protections — Maneesha Mithal, Associate Director of the Federal Trade Commission’s Division of Privacy and Identity Protection, assured Senate Banking Committee Chairman Mike Crapo (R-ID) yesterday that the FTC has already begun work on regulations to implement provisions of S. 2155 that will allow consumers to request security freezes on credit reports and fraud alerts, and will give consumers access to free electronic credit monitoring services. Peggy Twohig, Assistant Director of Supervision Policy for the Bureau of Consumer Financial Protection, declined to answer specific questions about the Bureau’s investigation of the Equifax breaches, except to say that the investigation is continuing. Mithal said the FTC supports legislation to require that consumers be notified of data breaches, and agrees that monetary penalties for failure to disclose would be appropriate.
New York calls for usury limits on online lenders — The New York State Department of Financial Services published a report on online lending this week and called for a “a level playing field” for all lenders operating in the state. The Department recommended that state consumer protection laws and usury limits should apply to online lenders doing business in New York, and called for the licensing and supervision of these lenders. “Many online lenders remain unlicensed in New York with no direct supervisory oversight from a safety and soundness or consumer compliance perspective,” the Department release said. “Direct supervision and oversight is the only way to ensure that New York’s consumers and small business owners receive the same protections irrespective of the channel of delivery.” The volume of online non-mortgage lending in New York is less than 6% of the loans made by banks, credit unions, and other licensed lenders in the state.
Fintech report coming soon, Mnuchin says — Yesterday’s House Financial Services Committee hearing focused mainly on tariffs and trade issues, but Secretary of the Treasury Steven Mnuchin said that the department’s much-anticipated report on innovation in the financial services industry should be out within the next 30 days. He also said that he expects Treasury to propose regulations to implement the new tax law’s Opportunity Zones program before the end of the year. In response to a question from Rep. Randy Hultgren (R-IL), Mnuchin said he agreed with the Bureau of Consumer Financial Protection’s Acting Director, Mick Mulvaney, that the Bureau should be headed by a bipartisan commission, but they won’t pursue that idea until/unless it has bipartisan support.
House votes to protect state insurance structure — Among the eight financial services-related bills the House of Representatives approved on Tuesday was H.R. 4537, the International Insurance Standards Act of 2017 , which would clarify that the federal government may not enter into any international agreements on insurance regulation that fail to recognize the United States’ state-based structure. The House also approved H.R. 5877, Rep. Tom Emmer’s bill to allow for the registration of venture exchanges, and H.R. 5970, Rep. Ann Wagner’s bill to require the SEC to conduct a cost-benefit analysis of emerging growth companies’ use of Form 10-Q.
House panel discusses China trade — Chinese tariffs and trade were the subject of a joint House Foreign Affairs subcommittee hearing on Wednesday, where witnesses emphasized the need to enact CFIUS reform and suggested other possible remedies to make global markets free and fair. One suggestion was to block access to US financial services for Chinese state-owned enterprises, although witnesses noted that even privately owned Chinese businesses may be state-controlled. Another proposal was to revise US antitrust laws to consider state-owned enterprises de facto monopolies.
SEC to vote on rule to make dark pools more transparent — The agenda for next week’s open meeting of the Securities and Exchange Commission includes a vote on amendments to the regulation of NMS stock alternative trading systems (ATS), or dark pools. The proposed changes were published for comment in late 2015, and text of a final rule has not been released. Next week’s meeting will be the first since the departure of Commissioner Michael Piwowar, which left the SEC evenly split between two Republican and two Democrat commissioners.
Johnson named Acting Deputy Director at CFPB — Mick Mulvaney, Acting Director of the Bureau of Consumer Financial Protection, announced on Monday that he has named Brian Johnson, the Bureau’s Principal Policy Director, as its Acting Deputy Director. The announcement followed the resignation of Deputy Director Leandra English, who had sued President Trump and Acting Director Mulvaney over Mulvaney’s appointment.
Next Week in Washington:
July 17            Senate Committee on Banking, Housing, and Urban Affairs receives the Federal Reserve’s semi-annual monetary report to Congress. Federal Reserve Chairman Jerome H. Powell will be the only witness. 10:00 a.m., SH-216 Hart Senate Office Building.
July 17            House Financial Services Subcommittee on Financial Institutions and Consumer Credit holds a hearing on “Examining Capital Regimes for Financial Institutions.” 2:00 p.m., 2128 Rayburn House Office Building.
July 18            House Committee on Energy and Commerce holds an oversight hearing on the Federal Trade Commission. 9:15 a.m., 2123 Rayburn House Office Building.
July 18            Senate Special Committee on Aging holds a hearing on “Supporting Economic Stability and Self-Sufficiency as Americans with Disabilities and their Families Age.” 9:30 a.m., SD-562 Dirksen Senate Office Building.
July 18            House Committee on Financial Services hears testimony from Federal Reserve Board Chairman Jerome H. Powell on “Monetary Policy and the State of the Economy.” 10:00 a.m., 2128 Rayburn House Office Building.
July 18            Securities and Exchange Commission holds an open meeting to consider the adoption of amendments to Rule 701(e), Rules 3-10 and 3-16 of Regulation S-X, and Rule 3a1-1 and Regulation ATS and new Form ATS-N, as well as whether to propose revisions to Rule 701 and Form S-8. 10:00 a.m., 100 F Street NW.
July 18            House Financial Services Subcommittee on Monetary Policy and Trade holds a hearing on “The Future of Money: Digital Currency.” 2:00 p.m., 2128 Rayburn House Office Building.
July 18            House Oversight Subcommittee on Intergovernmental Affairs holds a hearing on “Regulatory Divergence: Failure of the Administrative State.” 2:00 p.m. 2154 Rayburn House Office Building.
July 19            House Permanent Select Committee on Intelligence holds a hearing on “China’s Threat to American Government and Private Sector Research and Innovation Leadership.” 9:00 a.m., 1100 Longworth House Office Building.
July 19            Senate Banking Committee holds a hearing on the nominations of Kathleen Laura Kraninger to be Director of the Bureau of Consumer Financial Protection and Kimberly A. Reed to be President of the Export-Import Bank. 10:00 a.m., SD-538 Dirksen Senate Office Building.
The Ellis Insight. Jim Ellis reports on political news: 
Arizona:  Axios Media, in conjunction with the Survey Monkey organization, launched a 13-state US Senate race study (conducted during 6/11-7/2 where 12,677 registered voters were interviewed in their 13-state sample taken from their pre-qualified universe of 3,000,000 respondents). The Arizona results (1,290 sample size) finds Rep. Kyrsten Sinema (D-Phoenix) leading Rep. Martha McSally (R-Tucson), the strongest Republican in the field, by a 48-44% margin. Under various turnout models, the Sinema range stretches from one to six percentage points.
Florida:  The Axios-Survey Monkey polling project also tested the Florida electorate (1,080 respondents – see Arizona Senate above for further details) and found Gov. Rick Scott (R) to be leading Sen. Bill Nelson (D) by a 49-46% margin. Under all tested turnout models, Gov. Scott’s lead reaches from three to nine percentage points.
Indiana:  Again covering the Axios-Survey Monkey data, this time for Indiana (952 respondents - see Arizona Senate above for further details), the results find former state Rep. Mike Braun (R) topping Sen. Joe Donnelly (D) 49-47%. Under the pollsters’ elasticity models, the Braun advantage ranges anywhere between one and eight percentage points depending upon the voter turnout model employed.
Missouri:  The Missouri Senate race may arguably be the most topsy-turvy race in the country so far this year. Most polls have shown just a small lead for one contender or the other but, in most, Sen. Claire McCaskill (D) has enjoyed a small advantage. For example, the Axios Media/Survey Monkey poll (see Arizona Senate) posted the Senator to a 49-47% advantage. 
Yesterday, however, Remington Research released its new Show Me State survey for the Missouri Times news site (released 7/10; 1,034 MO registered voters via automated response device) and finds Attorney General Josh Hawley (R) slipping back into the lead, posting a slight 48-46% edge over Sen. McCaskill. We can expect this race being rated a toss-up all the way to Election Day.
Nebraska:  The Grassroots Targeting qualitative research organization yesterday released the results of their recent 1,000 person voter survey of the Nebraska electorate and found first-term Sen. Deb Fischer (R) cruising to re-election. According to the GT results, Sen. Fischer would lead Lincoln City Councilwoman Jane Raybould (D) 63-28% if the election were held in the current time frame.
Nevada:  The new Gravis Marketing Nevada poll (6/23-26; 630 NV likely general election voters) finds Democratic US Rep. Jacky Rosen (D-Henderson) taking a 45-41% lead over incumbent Sen. Dean Heller (R) in one of the nation’s most critical US Senate races. The Survey Monkey, in its 13-state Senate study as described above (see Arizona Senate), finds Rep. Rosen to be holding a similar 48-45% edge with a ballot test range of between one and five percentage points depending upon various projected turnout models.
North Dakota:  One more state the Axios-Survey Monkey project tested was North Dakota. There, 457 respondents participated (see Arizona Senate above for further details). According to the Survey Monkey results, at-large US Rep. Kevin Cramer (R-Bismarck) holds a 52-47% edge over Sen. Heidi Heitkamp (D) and the data models range from five to ten percentage points in the Congressman’s favor.
Ohio:  In addition to the Missouri results, Ohio is the only state where the Axios-Survey Monkey elasticity turnout models produce different leaders. According to the released data (951 OH respondents - see Arizona Senate above for further details), Sen. Sherrod Brown (D) leads Rep. Jim Renacci (R-Wadsworth), 52-44%, but the elasticity stretches from the most likely eight percentage point Brown margin all the way to a one point edge for Rep. Renacci. In the remaining Democratic incumbent states tested: Michigan, Montana, Pennsylvania, and Wisconsin, the sitting office holder has a strong lead under all scenarios.
Tennessee:  Here, the Axios-Survey Monkey data (1,010 respondents - see Arizona Senate above for further details) produces a much stronger Republican result than in most other polls. According to these data, Rep. Marsha Blackburn (R-Brentwood) is opening up a substantial 55-41% lead over former Gov. Phil Bredesen (D), with an elasticity range of 14 to 19 points depending upon turnout model scenario.
West Virginia:  The Mountain State Axios-Survey Monkey results (892 respondents - see Arizona Senate above for further details) are also more favorable to one candidate than most polling suggests. Here, Sen. Joe Manchin (D) leads Attorney General Patrick Morrisey (R), 53-40%. The turnout model elasticity range favors Sen. Manchin from 11 to 13 percentage points.
CA-49:  Democratic candidate Mike Levin released the results from his first campaign poll conducted in conjunction with the Democratic Congressional Campaign Committee. In the San Diego/Orange County congressional seat that Republican Darrell Issa (R-Vista) is vacating, the new Feldman Group poll (6/24-27; 400 CA-49 registered voters with an over-sample of 200 independents who are registered as “No Party Preference”) finds the poll sponsor leading Republican Board of Equalization member Diane Harkey (R) 44-41% in the first ballot test, and 49-46% when those leaning to both candidates are added to the sample. 
NJ-2:  New events in New Jersey’s open 2nd District have caused the National Republican Congressional Committee to back away from its endorsed nominee. Information coming into the public domain revealing past racist statements from Republican candidate Seth Grossman is precipitating the action. Democratic state Sen. Jeff Van Drew (D-Cape May) has long been considered the favorite to replace retiring twelve-term incumbent Frank LoBiondo (R-Ventnor), so GOP chances of retaining this seat were slim at best even at the beginning of the campaign. 
NY-14:  Amid a back-and-forth controversy between New York Rep. Joe Crowley (D-Queens/Bronx) and the woman who defeated him in last month’s Democratic primary, Alexandria Ocasio-Cortez, the prospect of a general election campaign between the two still remains. Though Mr. Crowley lost the Democratic primary, he won the Working Families Party nomination, which means he has ballot placement for the general election. Though being called upon by the Working Families leadership to resign from the ticket, Mr. Crowley has refused to do so, but still says he supports Ocasio-Cortez. Therefore, it is at least conceivable that we could see a re-match between the two in the general election.
NC-9:  Baptist former pastor Mark Harris upset GOP Rep. Bob Pittenger (R-Charlotte) in the May 8th Republican primary, but a new poll suggests the new party nominee is trailing as the candidates move toward the general election vote on November 6th. The North Carolina-based Civitas Group, a conservative think tank that often sponsors polls of the Tar Heel State electorate, contracted with Survey USA to test the 9th Congressional District race. According to the poll (7/5-8; 543 NC-9 likely general election voters), businessman Dan McCready (D) has jumped out to a 43-36% lead over Mr. Harris. 
WI-1:  Labor activist Randy Bryce (D) was raising millions of dollars when he was running against Speaker Paul Ryan (R) before the latter man announced his retirement. Now, his cash-on-hand still reads over $2 million but that so far isn’t helping him as much in his Democratic primary battle with Janesville School Board member Cathy Myers. According to a just-released Remington Research poll, Ms. Myers has assumed a 34-33% lead as the two move closer to the August 14th Democratic primary. Republicans are sure to nominate University Regent Bryan Steil, a long associate of Speaker Ryan. The race is expected to generate strong competition in November.
Alabama:  A just-released recent Atlantic Media & Research survey (6/12-14 & 6/18-21; 440 AL registered voters) finds Gov. Kay Ivey (R) jumping out to a major 53-28% general election lead over Tuscaloosa Mayor Walt Maddox (D). Both Gov. Ivey and Mayor Maddox won their respective Republican and Democratic Party nominations outright on June 5th, so neither was forced into a July 17th run-off election. 
Alaska:  Last week, the Alaska Research Service released polling numbers that found Gov. Bill Walker (I) falling well behind both Republican former state Sen. Mike Dunleavy and Democratic ex-US Senator Mark Begich. The ballot test showed Gov. Walker trailing in third place, 38-33-23%, behind both Dunleavy and Begich.
This week, the Governor released his own Patinkin Research Strategies poll (6/22-28; 800 AK likely general election voters), but his own survey actually confirms significant portions of the ARS poll. According to Patinkin, Mr. Dunleavy is also placed in the lead with 36%, followed by Gov. Walker attracting 28%, while Mr. Begich polls last at 22%. Later, Harstad Strategic Research conducted a survey for the Alaska AFL-CIO and also found Messrs. Walker and Begich alternating positions.
According to the Harstad results (6/21-26; 602 AK likely general election voters), Mr. Dunleavy holds a 32-28-28% lead over his two opponents. The polling also finds that both Walker and Begich would top Dunleavy in a one-on-one race, but there is no sign that either the Governor or ex-Senator will soon depart the campaign. So, unless something changes before the August 21st primary, the Alaska Governor’s race will feature three major candidates.
Minnesota:  Greenberg Quinlan Rosner Research ran a survey of the upcoming August 14th Minnesota Democratic gubernatorial primary (6/25-27; 602 MN likely Democratic primary voters) and found Attorney General Lori Swanson leading the primary field of candidates with 37% when leaners are included. Rep. Tim Walz (D-Mankato) was second at 29%, and state Rep. Erin Murphy (D-St. Paul), the officially endorsed Democratic-Farmer-Labor Party candidate, is well back with only 17% support.
The eventual Democratic nominee will face either former Gov. Tim Pawlenty or Hennepin County Commissioner and officially endorsed Republican candidate Jeff Johnson in the general election. Gov. Mark Dayton (D) is retiring after serving two terms.
Wyoming:  A new poll University of Wyoming poll for Wyoming Public Media and the Wyoming PBS outlet (6/18-20; 596 WY Republican voters) finds that any of the candidates can still win the August 21st GOP primary to succeed term-limited Governor Matt Mead (R). State Treasurer Mark Gordon places first with 19% of the vote, followed by businessman Sam Galeotos who polls 14%, while attorney Harriet Hageman follows with 11%, and retired physician and former gubernatorial candidate Taylor Haynes has 10 percent. Billionaire investor Foster Friess is next with 7%, and businessman Bill Dahlin follows with just 1% preference. 


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