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Your Weekly Report on the Discord from Washington, D.C.

In Partnership with the Eris Group:

CFPB Schedules Field Hearing on Small-Dollar Loans – The Consumer Financial Protection Bureau will hold a field hearing in Kansas City, MO on Thursday, June 2 to hear testimony from consumer groups, industry representatives and members of the public about small-dollar lending. The hearing will take place in the Music Hall of the Kansas City Convention Center. It’s open to the public, but RSVPs are required; click here to reserve your space.

Arbitration, Payday Loans, Prepaid Cards on CFPB Agenda – The CFPB published its semi-annual rulemaking agenda last week. Topping the list is its advance notice of proposed rulemaking on mandatory arbitration clauses, currently open for comment. The CFPB also plans to release a Notice of Proposed Rulemaking on payday loans, auto title loans and similar credit products “in the next several weeks.” Final rule on prepaid accounts and mortgage servicing are due this summer, and the Bureau plans to release a Notice of Proposed Rulemaking on TILA-RESPA disclosure requirements. The Bureau is also developing rules on overdraft service, debt collection, and nondepository lender registration.

Fed Outlines Plans for Insurance Companies – In developing a regulatory framework for insurance companies under Dodd-Frank, the Fed will “distinguish between insurance companies that we oversee solely because they own an insured depository institution and those that have been designated as systemically important,” Governor Daniel K. Tarullo recently told the National Association of Insurance Commissioners. Governor Tarullo said the Fed will be considering a proposal for “enhanced prudential standards” for the systemically important insurance companies in the next few weeks. He also said that the Fed will soon be publishing an advance notice of proposed rulemaking (ANPR) on capital requirements that will lay out two different methodologies, one for insurance companies that own banks or thrifts and one for systemically important companies.

Agencies Seek Comment on Proposed Compensation Rules – The FDIC, Federal Housing Finance Agency, Federal Reserve, NCUA, OCC and SEC jointly published a proposed rule to implement Dodd-Frank’s prohibition on incentive-based compensation arrangements that encourage inappropriate risk-taking. The rules would apply only to financial institutions with total assets of $1 billion or more, and would distinguish among three levels: institutions with assets of $250 billion and more, institutions with assets of $50 billion to $250 billion, and institutions with assets of $1 to $50 billion. Comments are due to the agencies by July 22.

FDIC Extends Comment Period on Record-Keeping Requirements – The FDIC announced Friday that it has extended the comment period to June 25 for its proposed record keeping requirements for FDIC-insured institutions with a large number of deposit accounts. The FDIC particularly wants comments on the cost of compliance, and has compiled a report on how it estimated compliance costs.

Senate Banking Approves SEC, Treasury, FDIC Nominations – On Thursday Senate Banking Committee approved five of 20 pending nominations, including two to fill vacancies on the Securities and Exchange Commission. The Committee approved the nominations of Lisa M. Fairfax and Hester M. Peirce to be Members of the Securities and Exchange Commission; Jay Lerner to be Inspector General of the Federal Deposit Insurance Corporation; Amias Gerety to be an Assistant Secretary for Financial Institutions, U.S. Department of the Treasury; and Rhett Jeppson to be Director of the U.S. Mint. Floor time to consider these nominations has not yet been scheduled, and six members of the Senate Banking Committee asked to be recorded as voting against them.

CFPB Arbitration Study is Flawed, Witnesses tell House Subcommittee – The Consumer Financial Protection Bureau’s findings that consumers benefit more from class action than from arbitration lack sufficient data and are based on flawed standards, witnesses told the House Financial Services Subcommittee on Financial Institutions and Consumer Credit last Wednesday. Class actions are costly and provide little in the way of deterrence, witnesses said, while even the CFPB’s own report found that 87% of class action suits produced no benefits.

House Bills Would Curb SEC Powers, Require Cost-Benefit Analysis – Three legislative proposals to reduce unnecessary record-keeping, require the registration of proxy advisory firms, and subject new SEC regulations to a cost-benefit analysis were the subject of a hearing before the House Financial Services Subcommittee on Capital Markets and Government Sponsored Enterprises on Tuesday. Former SEC Commissioner Daniel M. Gallagher, now President of Patomak Global Partners, called the hearing “a breath of fresh air,” and called for greater accountability for both the SEC and the proxy industry.

Senate Panel Discusses Small Business Finance Options – The Senate Banking Subcommittee on Securities, Insurance and Investment heard testimony about how best to improve small and medium-sized businesses’ access to capital and credit. Several Senators expressed concern about recent SEC rules governing money market funds; Senators Toomey and Menendez have introduced S. 1802, the Consumer Financial Choice and Capital Markets Protection Act of 2015, to restore the stable share price for institutional, non-government money market funds.

This Week in Washington (and elsewhere):

May 24
House Energy and Commerce Subcommittee on Commerce, Manufacturing and Trade holds a legislative hearing on17 FTC bills. 2123 Rayburn House Office Building, 10:00 a.m.

May 24
House Financial Services Task Force to Investigate Terrorism Financing holds a hearing on “Stopping Terror Finance: a Coordinated Government Effort.” FinCEN Director Jennifer Shasky Calvery and Larry McDonald, Deputy Assistant Secretary of the Treasury for the Office of Technical Assistance, will testify. 2128 Rayburn House Office Building, 10:00 a.m.

May 24
House Judiciary Committee holds a hearing on “Examining the Allegations of Misconduct Against IRS Commissioner John Koskinen, Part I.” 2138 Rayburn House Office Building, 10:00 a.m.

May 24
Senate Committee on Finance holds a hearing on “Debt vs. Equity: Corporate Integration Considerations.” SD-219 Dirksen Senate Office Building, 10:00 a.m.

May 24
House Judiciary Committee’s Executive Overreach Task Force holds a hearing on “Delegation of Regulatory Authority to an Unaccountable Bureaucracy.” 2138 Rayburn House Office Building, 3:00 p.m.

May 25
The FDIC’s Advisory Committee on Economic Inclusion (cleverly abbreviated as ComE-IN) holds a day-long public meeting to discuss its Mobile Financial Services Report. FDIC analysts will present the final report, and three panels will discuss payment system modernization, the agency’s qualitative research on banks’ efforts to serve the unbanked and underbanked, and ABLE Accounts and Economic Inclusion for persons with disabilities. FDIC Board Room, 550 17th Street NW, 9:00 a.m. to 4:15 pm; click here to stream the meeting online.

May 25
House Ways and Means Oversight Subcommittee holds a second hearing on “Protecting Small Businesses from IRS Abuse.” B-318 Rayburn House Office Building, 9:30 a.m.

May 25
House Energy and Commerce Subcommittee on Health holds a hearing on “Examining Cybersecurity Responsibilities at HHS.” 2123 Rayburn, 10:00 a.m.

May 26
Senate Committee on Small Business and Entrepreneurship holds a hearing on “Oversight of the SBA’s 7(a) Loan Guaranty Program.” SR-428A Russell Senate Office Building, 10:00 a.m.

The Ellis Insight. Jim Ellis reports on upcoming races:

> President

Democrats:  Former Secretary of State Hillary Clinton is just a little over 100 delegate votes from clinching the Democratic nomination over Sen. Bernie Sanders (I-D/VT), but she fell yet again to him in Oregon (46-54%), and only slipped past him in Kentucky by less than 2,000 votes. Not yet clinching the party nomination means she will have to go to the last major primary day, June 7th, to amass enough delegates to reach and surpass the required 2,383 delegate total. Her organization also ran into trouble in Nevada, where the State Convention lapsed into a chaotic state with tempers flaring between the Clinton and Sanders’ supporters. Though their candidate has virtually no realistic chance of winning the nomination, the Sanders operation continues to push forward and plans to fight all the way to the Democratic National Convention.

Republicans:  Donald Trump notched a 64% win in the Oregon primary early in the week. Both Kentucky and Idaho, which also held primary elections on May 10th, conducted their Republican presidential processes earlier in the year. Trump also remains short of committing the 1,237 votes necessary to claim the Republican nomination, but will do so on June 7th. It is very likely that he will be the official nominee before the California electorate begins voting, since New Jersey and South Dakota will likely deliver him the clinching number earlier in the day.

Fox News released their latest national poll (5/14-17; 1,021 US registered voters) and it shows that Donald Trump has already surpassed Hillary Clinton in national preference. The new data finds Trump up 45-42%, but a month ago Ms. Clinton held a 48-41% advantage. If Bernie Sanders became the Democratic nominee against Trump, the numbers flip. Sanders would hold the same national 45-42% edge. Rasmussen Reports (5/17-18; 1,000 US registered voters) also finds Trump leading Clinton, by a slightly larger 42-37% margin. But Ipsos/Reuters, also polling within this same time period (5/14-18; 1,397 US registered voters), arrives at a different conclusion. They see Ms. Clinton still holding the lead, this time at 41-36%. In all, the three pollsters find the two candidates close irrespective of who may be currently leading in national popular preference.

> Senate

Arizona:  Public Policy Polling surveyed the Grand Canyon State electorate (5/13-15; 896 AZ registered voters; 443 AZ likely GOP primary voters) and finds Sen. John McCain leading Rep. Ann Kirkpatrick (D-AZ-1) by a 42-36% margin. The data suggests that this race will be seriously competitive. The Republican primary numbers also showed considerable weakness for McCain in his quest for re-nomination. Here, he leads former state Sen. Kelli Ward (R) 39-26%, with two others and the undecided factor accounting for the remaining responses. If McCain and Ward were isolated one-on-one, the GOP sample splits 41% apiece for each individual.

Indiana:  Local Indiana pollster Bellwether Research, on behalf of the Free Enterprise Super PAC (5/11-14; 600 IN registered voters), finds Rep. Todd Young (R-IN-9) topping former Rep. Baron Hill (D-IN-9), 36-22%. All of the early polling favors Mr. Young who easily defeated Rep. Marlin Stutzman (R-IN-3) in the May 3rd primary. Mr. Hill was unopposed for the Democratic nomination. This will be the second time the two will have faced each other. In 2010, Mr. Young unseated then-Rep. Hill as the 9th District Representative.

New Hampshire:  MassInc, polling for Public Radio station WBUR in Boston, (5/11-12; 501 NH registered voters) finds Gov. Maggie Hassan (D) moving just ahead of Sen. Kelly Ayotte (R), 46-45% in their latest survey. With leaners to both candidates included, Hassan’s margin increased to 48-46%. Hassan carried a 50:33% favorable to unfavorable rating in the survey, while Ayotte’s ratio was 44:40%. This race has polled close for the past year, and will invariably do so until Election Day itself.

> House

FL-19:  In order to care for an ailing father, Rep. Curt Clawson (R), who won the 19th District seat in a 2014 special election, says he will not seek another term in November. Chauncey Goss (R), who previously ran for the seat and is the son of former Congressman and CIA Director Porter Goss (R), immediately announced his congressional candidacy. The Ft. Myers-anchored district is one of the safest Republican seats in Florida, and one of just four not changed in the mid-decade court ordered redistricting. Nine of the state’s 27 districts will run as open seats in the 2016 election cycle.

FL-26:  Two candidate polls were released, and both show the same contender leading. Former Rep. Joe Garcia (D) quotes his internal Expedition Strategies survey as giving him a 53-28% advantage over businesswoman and former candidate Annette Taddeo in the Democratic primary. Ms. Taddeo countered with her own Anzalone Liszt survey taken over the May 10-13 period, and it too finds Mr. Garcia holding a substantial lead. According to the Taddeo data, the ex-one term House member holds a similar 48-27% edge. The winner will challenge freshman Rep. Carlos Curbelo (R-Miami) in a re-drawn district that is more Democratic.

HI-1:  Freshman Rep. Mark Takai (D) tragically announced that he will not seek a second term later this year. Diagnosed with pancreatic cancer last year he was cleared to run for re-election after having surgery. Late this week, however, the Congressman informed the public that his disease is now spreading and he is forced to retire. The 48-year-old Representative won a 51-47% victory in 2014 after spending 20 years in the Hawaii legislature.

KS-3:  Rep. Kevin Yoder is another Republican member who has made a marginal district safe. Now, a new challenger has emerged attempting to put this Kansas City district into play. Financial counselor Jay Sidie (D) this week announced that he will challenge the three-term Representative. Mr. Yoder must be considered a big favorite until it becomes clear how strong Mr. Sidie, a first-time candidate, might become.

KY-1:  Former state Agriculture Commissioner James Comer (R), who lost the 2015 Republican gubernatorial primary by just 83 votes to businessman Matt Bevin who would go onto be elected Governor, notched a 61% GOP congressional primary victory against three opponents. Mr. Comer will now easily win the general election in this open western state congressional district and he will succeed the retiring 11-term Rep. Ed Whitfield (R-Hopkinsville) next year.

LA-2:  East Baton Rouge Mayor Kip Holden (D), who advanced to the statewide run-off for Lt. Governor last November, declared that he will challenge three-term Rep. Cedric Richmond (D-New Orleans) in the November jungle primary. Rep. Richmond is the clear favorite, but this has the underpinnings of a serious challenge if Holden can put the financial resources together. If the race remains just the two candidates, the contest will be decided on November 8th as one of the primary contenders will capture a majority of the vote in the jungle primary. The candidate filing period closes July 22nd.

WA-3:  Rep. Jaime Herrera Beutler (R), who has held a marginal southwestern Washington seat without much in the way of serious challenge for two re-election cycles after originally winning in 2010, has drawn a tougher Democratic opponent. State Rep. Jim Moeller, who was looking to enter the Lt. Governor’s race, has announced that he will instead file for Congress. Rep. Beutler remains favored, but this district should now be watched.

> Governor

Oregon:  Interim Gov. Kate Brown (D) scored an easy special election Democratic primary win earlier this week. She will now face former Oregon Medical Association president, Dr. Bud Pierce (R), in the special general election. As Secretary of State, Ms. Brown ascended to the Governorship in 2015 when then-Gov. John Kitzhaber (D) resigned to avoid publicizing a scandal. Oregon has no office of Lt. Governor. She is running to serve the balance of the current term, and then can run for a full four-year stint in 2018. Gov. Brown is heavily favored to win in November.