Eppur, si muove — “And yet it moves,” Galileo allegedly said about the earth when he was released from prison. Galileo, born 455 years ago today, had been sentenced for heresy for daring to assert that the earth moved around the sun, rather than the sun and other planets moving around the earth. We remember Galileo’s name (and birthday) today, but almost no one remembers the name of his inquisitor (for the record, Father Vincenzo Maculano da Firenzuola). There’s a moral in there somewhere . . .
Crapo, Brown seek comment on data privacy — Senate Banking Committee Chairman Mike Crapo (R-ID) and ranking member Senator Sherrod Brown (D-OH) published a request on Wednesday for stakeholder comments on the collection, use, and protection of sensitive customer information by financial institutions and private companies. “[I]t is worth examining how the Fair Credit Reporting Act should work in a digital economy, and whether certain data brokers and other firms serve a function similar to the original consumer reporting agencies,” said Crapo, while Brown called for Congress to “make it easy for consumers to find out who is collecting personal information about them, and give consumers power over how that data is used, stored and distributed.” Electronic comments are due by March 15 to firstname.lastname@example.org.
States will streamline fintech regulation, says CSBS — The Conference of State Bank Supervisors announced yesterday that it will lead the implementation of 14 recommendations to simplify and reduce duplication in the regulation of fintech companies and other nonbanks. The recommendations were the work of CSBS’s Fintech Industry Advisory panel, and include developing a 50-state model law to license money services businesses; creating a standardized call report for consumer finance businesses; building an online database of state licensing and fintech guidance; developing an online State Examination System to simplify examinations of nonbanks across state lines; and expanding the use of the Nationwide Multistate Licensing System to nonbank industries supervised at the state level.
FHFA nominee Calabria pledges to “follow the statute” — Testifying before the Senate Banking Committee yesterday, nominee Dr. Mark A. Calabria said that the first question he would ask before making any decision as Director of the Federal Housing Finance Agency (FHFA) would be, “What does the statute say?” Although housing finance policy is “truly at a critical juncture,” Calabria said that Congress must make the necessary decisions to privatize the government-sponsored enterprises, require adequate capital requirements, and open competition in the secondary market. His goals would be to make sure that the GSEs are “well capitalized, well managed, and well regulated.” He said that he was personally suspicious of monopolies and duopolies, and that some elements of the secondary market for 30-year mortgages can and should be changed, but he sees the need to preserve 30-year mortgages and pursue affordable housing goals “within the confines of the statute.”
Cannabis banking legislation gets a hearing — The House Financial Services Subcommittee on Consumer Protection and Financial Institutions held its first hearing Wednesday on a discussion draft of “The Secure and Fair Enforcement (SAFE) Banking Act of 2019,” a bipartisan proposal to create a safe harbor for financial institutions that offer services to cannabis-related businesses. “You can’t put the genie back in the bottle,” said Rep. Ed Perlmutter (D-CO), the bill’s primary sponsor. “Prohibition is over,” with 47 states and the District of Columbia authorizing some type of legal cannabis use. Witnesses described the inconvenience and dangers of conducting cannabis-related businesses on a cash-only basis, and California State Treasurer Fiona Ma said that it was up to the federal government to make the legal changes necessary to allow these businesses access to the banking system. Representatives of the Independent Community Bankers Association of America and the Credit Union National Association testified in favor of the bill, while several Republican committee members warned that the bill would do nothing to change the classification of marijuana sales as a felony under the Controlled Substances Act.
Senate panel begins work on infrastructure — “Improving our infrastructure is an area where bipartisan agreement and cooperation can be found,” said Chairman Roger Wicker (R-MS) at a Senate Commerce Committee hearing on Wednesday. Representatives of American port authorities, railroads, truckers, cable providers and transportation workers agreed on the urgent need to improve federal interstate highways, roads and bridges. All the witnesses called for an increase in the federal gas tax of 20 to 25 cents/gallon, which they said would be more than offset by a reduction in the estimate $1,600/year Americans pay to fix cars damaged by bad roads. As more and more vehicles use alternative fuels, they recommended developing a vehicle mileage tax and freight weight fees as methods of collecting funds from those who use the roads most.
FDIC extends comment period on deposit insurance application process — Interested parties now have until March 31 to submit comments on the FDIC’s request for information on “all aspects of the deposit insurance application process.” The FDIC specifically wants comments about “the transparency and efficiency of the process, and any unnecessary burdens.”
State Attorneys General object to CFPB’s fintech sandbox proposal — Twenty-two state Attorneys General, led by New York Attorney General Letitia James, wrote to the Consumer Financial Protection Bureau this week to ask the Bureau not to adopt its proposed policies to expand no-action letters and create a regulatory “sandbox” for new fintech products. The Attorneys General said that these policies would require formal rulemaking, and “embody precisely the type of blind faith in industry and regulatory diffidence that the CFPB was created to correct.” Comments on the proposal were due to the CFPB on Monday.
SEC extends comment period on proposed changes to disclosure rules for variable insurance products — Commenters now have until March 15 to comment on the SEC’s proposed updates to disclosure requirements for variable annuities and variable life insurance products. The SEC added 30 days to the comment period in light of the agency’s closure during the government shutdown.
Confirmations, nominations, departures, etc. — The Senate confirmed William P. Barr as Attorney General, and he was sworn in yesterday. Thursday’s Senate Banking Committee confirmation hearing included testimony from Bimal Patel, nominated to serve as Assistant of the Treasury, and Todd Harper and Rodney Hood, nominated to serve as members of the National Credit Union Administration Board.
Next Week in Washington:
Congress is in recess next week, but the Supreme Court reconvenes for oral arguments on Tuesday. February 18 is the federal holiday in honor of Washington’s Birthday; GrayRobinson’s Washington office will be closed.
The Ellis Insight. Jim Ellis reports on political news:
Michael Bloomberg: Former New York City Mayor Michael Bloomberg said a few days ago that he will decide within three weeks whether to enter the presidential campaign. Most observers expect him to become a candidate. If he does, the multi-billionaire is pledging to spend $500 million of his own money to advance his drive to win the Presidency.
California Poll: The Change Research organization conducted a California Democratic presidential primary survey and found that home state Senator Kamala Harris is not dominating the field. According to the just-released survey (2/9-11; 948 CA likely Democratic presidential primary voters), Sen. Harris can do no better than tie former Vice President Joe Biden for first place, at 26% apiece. Closely following is Vermont Sen. Bernie Sanders (I-D/VT) at 20%. No other candidate reaches 10%.
If the former Vice President and Sen. Sanders decide not to run, it is then Sen. Harris who takes charge. Without Mr. Biden in the field, the California first term Senator develops a commanding 53-23% lead over Sen. Elizabeth Warren (D-MA), with all of the also-rans scoring no better than 7 percent.
Sens. Amy Klobuchar & Elizabeth Warren: As expected, Minnesota Sen. Amy Klobuchar joined the Democratic presidential field last Sunday, announcing in the open air during a Minneapolis snow storm. Meanwhile, Massachusetts Sen. Elizabeth Warren officially converted her exploratory committee into a formal campaign entity. We now have 11 Democrats who have either declared their candidacies or formed working exploratory committees.
National Poll: The Morning Consult firm has released results of another of their presidential polls, this one conducted during the Feb 4-10 period. The survey, of 11,627 likely Democratic primary voters or caucus attenders in addition to 517 Democratic voters in the four early states of Iowa, New Hampshire, Nevada, and South Carolina, again project former Vice President Joe Biden as the leader for the party nomination.
According to the national results, Mr. Biden leads Sens. Bernie Sanders (I-D/VT) and Kamala Harris (D-CA) by a 29-22-13% split, and a 33-21-11-10% division within the early states. In the secondary poll, Sens. Sanders and Harris are again in second and third place with Massachusetts Sen. Elizabeth Warren placing fourth just behind Ms. Harris. In both polls, the remainder of the field – 19 candidates or potential candidates in all were tested – finishes well below the 10% mark.
Reps. Tim Ryan & Seth Moulton: Though we haven’t heard much from these men about their own presidential prospective campaigns, it appears such a trend will quickly change. Ohio Rep. Tim Ryan (D-Youngstown) says he is seriously considering entering the national race and made appearances in Iowa and New Hampshire during the week.
Meanwhile, Massachusetts Rep. Seth Moulton (D-Salem), who was at the center of the anti-Nancy Pelosi insurgence but then made his peace with her before the vote, now confirms that he is contemplating a presidential run. Adding these two to the burgeoning Democratic presidential field, it is again possible that the total number of candidates could soar past twenty.
Arizona: As expected, Democrat Mark Kelly, husband to former Arizona US Rep. Gabrielle Giffords (D-Tucson) and part of the first twin brother team to ever fly in space, announced that he will enter the special Senate election to be held concurrently with this regular general election cycle.
After the announcement, Rep. Ruben Gallego (D-Phoenix) reiterated through Twitter that he is still seriously considering mounting a campaign. Appointed Sen. Martha McSally (R) is expected to run to fill the balance of the late Sen. John McCain’s (R) final term in office. On the heels of Mr. Kelly’s formal announcement, OH Predictive Insights conducted a flash poll of the state’s electorate (2/11-13; 600 AZ likely voters) and found Sen. McSally leading Mr. Kelly, 44-42%. Clearly a close November 2020 race is expected.
Additionally, former Arizona Attorney General Grant Woods, who served as a Republican but then later joined the Democratic Party, said that he will not enter the 2020 special Senate election campaign.
Colorado: About this time two years ago, Colorado Rep. Ed Perlmutter (D-Golden) held a major announcement event to declare his candidacy in the open Governor’s race. But, his statewide campaign did not last long. Soon, he was saying not only would he end his gubernatorial bid, but also his congressional career. Changing his mind yet again before the candidate filing deadline, Rep. Perlmutter ultimately filed for, and won, re-election.
This week, the Congressman again stated that he is considering entering the Democratic primary for US Senate with the hope of challenging first-term incumbent Sen. Cory Gardner (R).
Tennessee: State Sen. Sara Kyle (D-Memphis), one of the Democrats thought to be eyeing the open US Senate race since incumbent Lamar Alexander (R) has already announced that he won’t be seeking re-election, said that she will not run statewide next year.
At this point, only Iraq War veteran James Mackler, who for a time was in the 2016 Senate campaign but bowed out when former Gov. Phil Bredesen (D) stated his intention to run, is the only announced open seat candidate. Former Gov. Bill Haslam (R) promises a decision in March about whether he will seek the open Senate seat.
Texas: While previously saying he would be concentrating on his twin brother Julian Castro’s presidential race, Rep. Joaquin Castro (D-San Antonio) now confirms that he is considering entering the US Senate race to challenge Sen. John Cornyn (R) next year. Ex-Rep. Beto O’Rourke’s (D-El Paso) strong finish in the 2018 Senate race against junior Senator Ted Cruz (R) gives Democrats some hope that they could unseat Sen. Cornyn.
M.J. Hegar is a decorated retired Army helicopter pilot who told her compelling personal story while challenging Texas Rep. John Carter (R-Round Rock) last November and holding him to a scant 51-48% re-election victory after raising $5 million for her campaign. While many believed she would again seek the congressional seat, instead Ms. Hegar is sending signals suggesting that she is entertaining thoughts about running for the US Senate.
AZ-1: Arizona’s 1st Congressional District, which covers most of the state’s territory east of Phoenix, has proven itself as a highly marginal political region that tends to lean slightly Democratic in congressional races but favors Republicans in the presidential contest. Second-term Rep. Tom O’Halleran (D-Sedona) won a 54-46% re-election victory against frequent Republican candidate Wendy Rogers last November, but the race appeared to be more competitive than the final vote count indicated.
Mr. O’Halleran, who served in the state legislature as a Republican, announced this week that he will seek re-election in 2020. Republicans will be expected to mount a serious challenge here. Already, however, former Flagstaff City Council member Eva Putzova has announced a Democratic primary challenge, which likely prompted the Congressman to declare his future political intentions now.
NC-3: After entering hospice in late January, veteran Rep. Walter Jones (R-Farmville), who was first elected to the US House in 1994 after serving ten years in the North Carolina state legislature, passed away yesterday on his 76th birthday.
Gov. Roy Cooper (D) will now be tasked with calling a special election to choose a successor to the 13-term Congressman who developed a conservative voting record but was often at odds with his own party’s leadership. Mr. Jones’ father, Walter B. Jones, Sr. (D), also was elected to Congress 13 times and, like his son, died in office.
PA-12: Pennsylvania Rep. Tom Marino (R-Williamsport) resigned from the House at the end of January ostensibly to accept a position in the private sector, but now we are learning he also has a health condition. This creates a special election in the north-central Pennsylvania seat that Gov. Tom Wolf (D) has scheduled to be filled on May 21st, in conjunction with the state’s municipal primary day.
The parties are to meet in a special district convention to decide nominees. The Republican leaders announced that they have chosen March 2nd as their convention day. Democrats have already selected college professor and 2018 congressional nominee Marc Friedenberg as their nominee. Mr. Friedenberg fell to Rep. Marino, 66-34%, in the November 2018 congressional contest.
SC-1: The Trafalgar Group recently conducted a survey (1/28-2/1; 2,479 SC-1 likely GOP primary voters; automated) among potential Republican congressional candidates who may battle for the opportunity of challenging freshman Rep. Joe Cunningham (D-Charleston), a surprise 2018 winner. The seat promises to be at the top of the GOP conversion target list for the entire 2020 election cycle.
2018 GOP nominee Katie Arrington, who denied then-Rep. Mark Sanford (R-Charleston) re-nomination but lost to Cunningham in the general election, tops the large field of tested candidates. With Mr. Sanford included, she would lead him 25-23% with the nine other named potential candidates all falling well below 10 percent.
Without Sanford in the field, she would touch 31% with state Sen. Tom Davis (R-Beaufort) leading the rest but with only 8% support. If Arrington is not included, Mr. Sanford, who has yet to say whether he has interest in running again, almost reaches 37% with all of the others below the double-digit mark.
Kentucky: The Garin Hart Yang Research firm recently tested Attorney General Andy Beshear in his battle for the Kentucky Democratic gubernatorial nomination. The survey (2/4-7; 603 KY likely Democratic primary voters) finds the one-term AG substantially leading his two Democratic Party rivals in anticipation of the state’s May 21st primary.
Against state House Minority Leader Rocky Adkins (D-Sandy Hook) and former state Auditor Adam Edelen, Mr. Beshear takes a commanding 55-17-7% lead over his two opponents. Such is not particularly surprising when considering the Beshear name is well known to Kentucky Democratic primary voters. Mr. Beshear’s father, Steve Beshear, was the state’s Governor from 2007-2015.
Mississippi: It had been suggested for some time that former state Supreme Court Justice Bill Waller Jr. (R) may enter the 2015 gubernatorial campaign, but his final decision was surprising nonetheless.
While most believe Mr. Waller would run as an Independent or minor party candidate, he has decided to take a more traditional route. Instead of going straight into the general election and potentially become a spoiler, Mr. Waller announced late this week that he will challenge Lt. Gov. Tate Reeves for the Republican gubernatorial nomination.
The Mississippi general election is expected to be close against four-term Attorney General Jim Hook (D). Lt. Gov. Reeves remains the clear favorite in the Republican primary, irrespective of Mr. Waller’s presence as his GOP primary opponent.
Virginia: While Lt. Gov. Justin Fairfax (D) now faces serious potential criminal charges for an alleged 2000 rape in North Carolina and a sexual assault in Massachusetts, two polls were conducted testing whether respondents believe that Gov. Ralph Northam (D) should resign over his past racial antics.
The Washington Post-Schar Poll and the Democratic survey research firm Civiqs, polling for the liberal Daily Kos Elections website, arrived at very different results. The Post’s survey (2/6-8; 706 VA residents) found the state split as to whether Gov. Northam should resign.
According to this data, 47% believes he should step down while another 47% says Mr. Northam should remain in office. But, the Civiqs results (2/5-8; 868 VA registered voters) see a much different sentiment. According to this study, by a whopping 60-24%, the electorate says he should resign.
Though the polls were conducted over the same time period, the Post’s survey includes all adults while Civiqs segmented only registered voters. At this point, Mr. Northam says he will not resign and the flap involving Lt. Gov. Fairfax makes it more likely that the Governor will hold his position.