Crapo promises further attention to fintech — The Senate Banking Committee heard testimony on Tuesday about the growing role of fintech in delivering financial services to consumers, and the need to revise regulations and statutes to reflect these changes. Committee Chairman Sen. Mike Crapo (R-ID) noted bipartisan concerns about the need to protect data security and consumer control over their own financial information, but emphasized the need to protect opportunities for innovation. Several witnesses noted that the Bureau of Consumer Financial Protection has not yet complied with Dodd-Frank’s requirement that it promulgate rules to allow consumers to grant third parties access to their banking data. Chairman Crapo said the Committee would “dig much more deeply” into this issue in future.
Regulators propose narrower definition of HVCRE for capital requirements — The Office of the Comptroller of the Currency, Federal Reserve System, and Federal Deposit Insurance Corporation issued a joint notice of proposed rulemaking this week that will ease capital requirements for certain types of commercial real estate lending, as required by the Economic Growth, Regulatory Relief, and Consumer Protection Act. The proposed rule would change the regulatory capital rule so that the definition of “high volatility commercial real estate (HVCRE) exposure” would match the statutory definition of “high volatility commercial real estate acquisition, development, or construction (HVCRE ADC) loan.” Comments are due to the agencies within 60 days of the proposal’s publication in the Federal Register.
Clarida sworn in as Vice Chairman of the Fed — Richard H. Clarida took office on Monday as a member of the Board of Governors and Vice Chairman of the Federal Reserve System. Clarida was appointed to the unexpired portion of a term that ends on January 31, 2022, and to a four-year term as Vice Chairman. The Senate has yet to vote on the nomination of Michelle Bowman to the Federal Reserve Board, which was made at the same time as Clarida’s, in April.
Fed veteran Liang named to Federal Reserve Board — Yesterday the President announced that he will appoint Jean Nellie Liang to serve the remainder of a 14-year term to the Board of Governors of the Federal Reserve System, to expire January 31, 2024. Ms. Liang, who holds a B.A. from Notre Dame and a Ph.D. from the University of Maryland, is best known as the former Director of the Fed’s Division of Financial Stability. She is currently a Senior Fellow in Economic Studies at the Brookings Institution, and was previously a member of the Congressional Budget Office’s Panel of Economic Advisors. She has also served as a lecturer at the Yale School of Management. Liang oversaw the implementation of the CCAR stress test, and has spoken publicly about the need to maintain strong capital standards.
Senate approves 2019 spending for Defense, HHS, Labor and Education — The Senate voted 93-7 on Tuesday to pass a bill that would provide $854 billion in funding for the Departments of Defense, HHS, Labor, and Education. The House is expected to take up the bill next week.
SEC announces proxy process roundtable for November 15 — The Securities and Exchange Commission has set a date for its previously announced roundtable on the proxy process. The SEC will hear views from investors, issuers, and other market participants on topics such as proxy voting mechanics and technology, the shareholder proposal process, and the role and regulation of proxy advisory firms. The SEC is also inviting the public to comment on the process and related rules either before or after the roundtable. All submissions should refer to File Number 4-275.
Maine insurance regulator named to FSOC — The National Association of Insurance Commissioners (NAIC) announced on Wednesday that Eric Cioppa, Superintendent of the Maine Bureau of Insurance, will serve a two-year term on the Financial Stability Oversight Council (FSOC). Cioppa succeeds New Jersey insurance regulator Peter L. Hartt, whose term expired on September 17. He joined the Maine Bureau of Insurance in 1988 as a statistician.
Visa, Mastercard settle antitrust case for $6.2 billion — Visa, Mastercard, and several other financial institutions reached an agreement this week to settle a 13-year-old case against the processors for improperly inflating interchange (“swipe”) fees charged to retailers. The settlement, reached in the US District Court for the Eastern District of New York, will distribute claims to merchants based on the amount of interchange fees they paid between January 1, 2004 and the preliminary approval date of the settlement. Once the US District Judge approves the settlement, claimants will receive information about how to file their claims.
SEC, DOJ shut down $345 million Ponzi scheme — The Securities and Exchange Commission and the US Attorney’s Office for the District of Maryland took action this week against three men who ran six different entities that claimed to earn money for investors by buying and reselling consumer debt portfolios. Kevin B. Merrill, Jay B. Ledford, and Cameron Jezierski “engaged in a brazen fraud, deceiving investors to perpetuate their wrongdoing and line their pockets with ill-gotten gains,” said Kelly L. Gibson, Associate Regional Director of the SEC's Philadelphia Regional Office. The SEC obtained a court order to stop the businesses, an emergency asset freeze, and the appointment of a receiver.
Next Week in Washington:
September 26 at 10:00 a.m.
House Financial Services Subcommittee on Capital Markets, Securities, and Investment holds a hearing on “Oversight of the SEC’s Division of Investment Management.”
September 26 at 10:00 a.m.
Senate Committee on Commerce, Science, and Transportation holds a hearing on “Examining Safeguards for Consumer Data Privacy.” Witnesses include representatives of AT&T, Amazon, Google, Twitter, Apple, and Charter Communications.
September 26 at 10:45 a.m.
Joint Economic Committee holds a hearing on “Examining the Rise of American Earnings and Living Standards.” Witnesses include Dr. Casey Mulligan, Chief Economist of the Council of Economic Advisers, and Stephen Moore of the Heritage Foundation.
September 26 at 2:00 p.m.
House Financial Services Subcommittee on Monetary Policy and Trade holds a hearing on “Administration Goals for Major Sanctions Programs.”
September 27 at 10:00 a.m.
House Judiciary Subcommittee on Crime, Terrorism, Homeland Security, and Investigations holds a hearing on “Post-PASPA: An Examination of Sports Betting in America.”
September 27 at 10:00 a.m.
House Small Business Subcommittee on Economic Growth, Tax, and Capital Access holds a hearing on “The Local Impact of Economic Growth.”
September 27 at 10:30 a.m.
House Financial Services Committee holds a hearing on “Oversight of the Federal Housing Finance Agency’s role as conservator and regulator of the Government Sponsored Enterprises.”
September 27 at 2:00 p.m.
House Oversight Subcommittees on Intergovernmental Relations and Healthcare, Benefits, and Administrative Rules holds a hearing on “The Benefits of a Deregulatory Agenda: Examples from Pioneering Governments.”
September 28 at 9:00 a.m.
House Financial Services Subcommittee on Financial Institutions and Consumer Credit holds a hearing on “Examining Opportunities for Financial Markets in the Digital Era.”
The Ellis Insight. Jim Ellis reports on political news:
Minnesota: A new Minneapolis Star Tribune/Mason-Dixon Polling & Strategies poll (9/10-12; 800 MN likely voters) finds state Sen. Karin Housley (R-St. Croix Valley) pulling to within high single-digits of appointed Sen. Tina Smith (D) in the upcoming special Senate election scheduled concurrently with the regular election calendar. According to the Mason-Dixon results, Sen. Smith’s lead is narrowing to 44-37%, placing Housley within shouting distance of the incumbent with Sen. Smith well below 50%. This special election effort may become one to watch as Election Day draws ever nearer.
Tennessee: The open Tennessee Senate race continues to move back and forth between former Gov. Phil Bredesen (D) and US Rep. Marsha Blackburn (R-Brentwood). The latest Vox Populi survey sums it up well. According to their latest poll (9/16-18; 567 TN “active” voters), the two candidates are tied at 42% apiece on the first ballot test question. When pushed for an answer, an additional nine percent lean toward Bredesen, as opposed to seven percent more preferring Blackburn.
Earlier in the month, CNN released their Tennessee poll (9/11-15; 723 TN likely voters) that placed Mr. Bredesen up 50-45%. But during the same time period, Triton Research & Polling (9/10-12; 1,038 TN registered voters) found Blackburn riding in front, 48-45%. Out-of-state groups are coming in hard for Bredesen, but Blackburn has raised more campaign money. October promises to be an interesting month in the Volunteer State.
Texas: Just when Sen. Ted Cruz (R) sees his best independent polling results from Quinnipiac University (9/11-17; 807 TX likely voters) placing him ahead of Rep. Beto O’Rourke (D-El Paso), 54-45%, Ipsos Reuters countered with their online poll (9/6-14; 992 TX adults/registered voters) that gives O’Rourke a 47-45% edge. This is further countered by Vox Populi (9/16-18; 508 TX likely voters) that foresees a flat tie at 46%, apiece. Then, Democratic pollster Public Policy Polling, surveying for the liberal interest group Protect Our Care (9/19-20; 613 TX likely voters) again finds Cruz up, 48-45%.
Wisconsin: Marquette University Law School just released their September poll (9/12-16; 800 WI registered voters; 614 likely voters) and sees Sen. Tammy Baldwin (D) substantially strengthening her advantage over state Sen. Leah Vukmir (R-Brookfield).
In Marquette’s August poll, the margin between the two candidates was only two percentage points (Baldwin leading 49-47%), but this new survey finds the Senator establishing a 53-42% advantage. Sen. Baldwin, without facing a primary, launched a strong media wave just before and after the August 14th vote, thus taking advantage of Ms. Vukmir having to spend her treasury in order to win the competitive Republican vote.
CA-39: A new independent Monmouth University poll (9/13-16; 402 CA-39 likely voters) is forecasting Republican former state Assemblywoman Young Kim to a new double-digit lead over retired Naval officer and lottery winner Gil Cisneros (D). According to the Monmouth result, Ms. Kim now has a strong 51-41% lead for retiring Rep. Ed Royce’s (R-Yorba Linda/ Fullerton) seat. Previously, the race had been considered to be languishing in the toss-up category.
CO-6: The Siena College/New York Times polling series examined the east Denver suburbs (9/12-14; 500 CO-6 likely voters) and found five-term incumbent Mike Coffman (R-Aurora) falling significantly behind in his battle for re-election. The Congressman, who has won three difficult campaigns in a district drawn to defeat him, now looks to be trailing by double digits. According to the Siena data, challenger Jason Crow (D), an attorney and Iraq War veteran, leads Rep. Coffman, 51-40%. It is clear the Congressman has his work cut out for him to score another unconventional political victory.
FL-27: According to a McLaughlin & Associates poll for the Maria Elvira Salazar campaign (9/10-13; 400 FL-27 likely voters), the Republican nominee, an Emmy-winning Spanish language news reporter, holds a 51-42% lead over former Health and Human Services secretary and ex-University of Miami president Donna Shalala (D) in the open South Florida seat. The Shalala campaign countered with their own internal Bendixen & Amandi International poll (8/29-9/2; 600 FL-27 registered voters), which gave their candidate a 46-42% advantage. Though many prognosticators have this seat rated as Likely Democratic, the numbers appear to be telling a different story. Rep. Ileana Ros-Lehtinen (R-Miami) is retiring.
KS-2: Rep. Lynn Jenkins (R-Topeka) is retiring, leaving this marginal district open. Democrats have been high on their chances here with former state House Minority Leader and 2014 gubernatorial nominee Paul Davis. Republicans hosted a difficult primary, and Afghan War veteran Steve Watkins, aided by a major independent expenditure that his father financed, overcame four state legislators to win the GOP nomination, but with only 26% of the vote. Therefore, Mr. Watkins has to scramble to unite a skeptical Republican base behind him. Siena College just tested this campaign (9/13-15; 500 KS-2 likely voters) and finds a dead heat general election contest. The Siena results find Davis edging Watkins, 45-44%.
MA-3: The open 3rd Congressional District Democratic primary recount has now concluded. As expected, after the initial recount precincts actually added votes to her total, former congressional chief of staff and businesswoman Lori Trahan has now officially clinched the party nomination. Her main opponent, Boston mayoral former chief of staff Dan Koh, conceded defeat. The original count, which found Ms. Trahan leading by just 52 votes, expanded to a 145-vote margin when the canvass and recount concluded. The new Democratic nominee is now favored to defeat Republican businessman Rick Green in the general election, though an upset is not entirely out of the question. The seat is open because Rep. Niki Tsongas (D-Lowell) is retiring.
NJ-7: Monmouth University went into the field to test the central New Jersey race between five-term incumbent Leonard Lance (R-Clinton Township) and former State Department official Tom Malinowski (D). According to the survey (9/13-17; 414 NJ-7 registered voters), Mr. Malinowski takes a 46-43% over Rep. Lance among the most likely voters. The 7th District is politically marginal, and is obviously in play for a Democratic conversion.
NM-2: The open southern New Mexico congressional district hasn’t generated a lot of national attention, but that could soon change. While previous polling had posted state Rep. Yvette Herrell (R-Alamogordo) to leads of between two and 14 points, the new Siena College/New York Times survey (9/13-18; 503 NM-2 likely voters) finds attorney Xochitl Torres-Small (D) now claiming a one-point lead, 46-45%. Earlier this week, the Albuquerque Journal released their poll that gave Ms. Herrell a 48-41% advantage.
NY-27: It has now become apparent that New York Republican officials will not be able to legally remove Rep. Chris Collins’ (R-Clarence/Batavia) name from the November ballot, as the Congressman requested. Mr. Collins was indicted for insider trading in a situation involving his son and a company in which both served on the board of directors. The Democratic nominee is Grand Island town official Nate McMurray, but he has yet to make a mark on the campaign trail. Despite what is normally a safe Upstate Republican seat, we can certainly expect to see national and local Democrats quickly coalescing behind McMurray to finance a serious run.
VA-2: A Garin-Hart-Yang Research survey for the Elaine Luria campaign (9/5-8; 404 VA-2 likely voters) finds the retired Navy Commander moving ahead of Rep. Scott Taylor (R-Virginia Beach), 51-43%. Recent controversy has arisen that resulted in several of Taylor’s campaign operatives being fired for apparently assisting an effort to qualify an Independent candidate for the ballot with falsified signatures. This data suggests that the negative publicity has clearly put Rep. Taylor, originally elected in 2016, in serious danger of losing his seat.
VA-10: Despite political rumors previously circulating that the National Republican Congressional Committee (NRCC) was going to abandon Virginia Rep. Barbara Comstock (R-McLean) because early polling suggested a Democratic lead, their latest action proves such conjecture wholly false. The NRCC just committed over $710,000 in new independent expenditures on Rep. Comstock’s behalf, making her the top recipient of their most recently announced round of spending in 15 districts around the country.
Florida: Rasmussen Reports has, at times, been criticized for producing skewed data in the Republicans’ favor. But their new Florida poll (9/9-11; 800 FL likely voters) actually gives Democratic nominee Andrew Gillum, the Tallahassee Mayor who scored a come-from-behind upset victory in the August 28th primary, his strongest lead over resigned Rep. Ron DeSantis (R-Palm Coast/Daytona Beach). All other polls of this race find the two candidates well within the margin of polling error, but Rasmussen sees a 48-42% spread.
Maryland: Maryland-based Goucher College, which often polls Maryland political campaigns, released a new statewide study (9/11-16; 831 MD adults). The results find Gov. Larry Hogan (R) moving out to a prohibitive lead over former NAACP president Ben Jealous (D) in his race for re-election. According to Goucher, the Governor holds a 54-32% advantage.
The fact that this is a poll of “adults” and uses a universe apparently not even screened for registered voters could give the Governor some enhanced artificial support because he is the more well-known candidate, so it’s possible that the registered or likely voter ballot test would be a bit closer. Irrespective of the polling segmentation, Republican Gov. Hogan appears headed for re-election even in this most Democratic of states.
Minnesota: In a rare poll of the open Minnesota Governor’s race since the August 14th primary, the Minneapolis Star Tribune newspaper released their Mason-Dixon Polling & Research survey (9/10-12; 800 MN likely voters) that posts the south Minnesota Congressman Tim Walz to a 45-36% lead over Hennepin County Commissioner and 2014 Republican gubernatorial nominee Jeff Johnson. Among men, the race is tied at 40-40%, but women give the Democratic nominee a whopping 18-point advantage at 50-32%.
New Mexico: US Rep. Michelle Lujan Grisham (D-Albuquerque) is sustaining a 50-43% advantage over GOP Rep. Steve Pearce (R-Hobbs) in the open Governor’s race as reported in a new Albuquerque Journal newspaper poll (Research & Polling, Inc.; 9/7-13; 966 NM registered voters). The winner replaces term-limited Gov. Susana Martinez (R) next year. Earlier, Ms. Grisham’s lead over Mr. Pearce had dropped to two points, 42-40%, when Emerson College released the results of their mid-August survey. Since then two Democratic polls gave her leads of eight and ten points, and now we see a seven-point spread in this latest independent survey.
Wisconsin: In a race that continually polls close but bounces back and forth between Gov. Scott Walker (R) and Superintendent of Public Instruction Tony Evers (D), the aforementioned Marquette University Law School survey (see Wisconsin Senate above) finds the Governor trailing Mr. Evers, 49-44%, among likely voters. Expanding to the registered voters universe, the split is a similar 47-43% in Mr. Evers’ favor. Gov. Walker is running for a third term, but he has already won three elections since 2010, including surviving a statewide recall vote in 2012.