Your Weekly Report on the Discord from Washington, D.C.
In Partnership with the Eris Group
House Financial Services Committee okays 22 bills — Last Thursday the House Financial Services Committee voted to send 22 legislative proposals to the House floor. One, H.R. 3898, would impose extreme new financial sanctions on North Korea; the others are all regulatory burden relief measures, targeted primarily at community banks, small businesses, and access to financial services. Most passed with bipartisan support, although H.R. 3857, Rep. Ann Wagner’s (D-MO) bill to repeal the Department of Labor’s fiduciary rule, passed along party lines. Bills passed Thursday would require internal risk control mechanisms for the SEC’s Consolidated Audit Trail; expand certain provisions of Title I of the JOBS Act to all public companies; create a safe harbor for financial services personnel who report suspected elder abuse; remove the $50 billion asset threshold for automatic designation of financial institutions as systemically important; raise the CFPB’s examination threshold for banks from $10 billion in assets to $50 billion in assets; amend the Truth in Lending Act to allow for mortgages on manufactured housing; and expand the definition of “accredited investor” to include expertise as a substitute for net worth.
Carson describes HUD’s “Forward Initiative,” calls for reform — At an oversight hearing last Thursday that occasionally became heated, HUD Secretary Ben Carson defended the agency’s responses to housing needs in areas struck by hurricanes, said that HUD would soon have a Chief Financial Officer and the FHA would soon have a Commissioner, and called criticism of his comments about residents of public housing “a bunch of crap.” Carson said that he plans to run the agency more like a business, and called for increases in public-private partnerships and the use of incentives such as Low Income Housing Tax Credits. He said nothing about the Administration’s proposal to eliminate funding for the Community Development Block Grant program, but acknowledged that the program had “some very good components” that would not be abandoned.
CFTC will look at swap deal de minimis issue in 2018, says Giancarlo — Commodity Futures Trading Commission Chairman J. Christopher Giancarlo appeared before the House Agriculture Committee last week to talk about the agency’s agenda, including the CFTC’s agency-wide review of rules and practices. Giancarlo noted the arrival of two new commissioners and a new director of the Division of Clearing and Risk, who need time to understand and evaluate outstanding issues such as the swap dealer de minimis threshold. To give them that time, Giancarlo said that he would delay a decision for a year, and propose a final resolution in the first half of 2018. He said that the CFTC is working closely with its European counterparts to coordinate transparency standards, and with the SEC to harmonize the treatment of inter-affiliate margin requirements.
Fed announces government framework formation team for faster payments — The Federal Reserve has named 27 members of a short-term work group responsible for developing a governance framework that facilitates faster payments. The Governance Framework Formation Team includes representatives of banks, clearing houses, large retail organizations, payment networks, consumer groups, academia, the U.S. Treasury and the Consumer Financial Protection Bureau. Its goal is to publish recommendations for comment in spring 2018, and conclude its work by the end of next year.
Next Week in Washington:
The House is in recess next week.
Senate Committee on Banking, Housing and Urban Affairs holds a hearing on “Consumer Data Security and the Credit Bureaus.” Witnesses include representatives of the Consumer Data Industry Association and the Electronic Privacy Information Center, and an analyst from the Congressional Research Service. 10:00 a.m., SD-538 Dirksen Senate Office Building.
The FDIC’s Advisory Committee on Economic Inclusion (ComE-In) holds a day-long meeting whose agenda that includes a report on research about neighborhood access to bank branches and the results of a 2016 survey of entry-level consumer checking and savings accounts. The meeting will be webcast. 9:00 a.m., FDIC Board Room, 550 17thStreet NW, Washington, DC.
The Ellis Insight. Jim Ellis reports on political news:
Alabama: The Cygnal polling firm tested the Alabama special general election between former state Supreme Court Chief Justice Roy Moore, the Republican nominee, and former US Attorney Doug Jones, the Democrat. The poll (10/2-5; 497 AL likely special election voters) finds Moore leading the race 49-41%. Like in the primary and run-off, the Republican nominee runs well in Huntsville, Montgomery, and Mobile, while he and Mr. Jones are virtually tied in Birmingham.
There is a significant gender gap, however. Moore leads among men, 53-38%; Jones has a slight edge among women, 46-45%. Perhaps the best news for Moore is that he has a clear advantage among the highest propensity voters, while Jones’ best support number comes from those least likely to participate in the December 12th special election.
California: Veteran Sen. Dianne Feinstein (D-CA), at 84 years of age the body’s oldest member, last week announced that she will run for a fifth full term next year. Though thought of as a retirement possibility largely because of her age, the Senator has been consistent in saying that she would run again if she believed she was still an effective voice.
Her re-election prospects appear strong, though she is apparently going be challenged from her party’s left faction. State Senate President Kevin de Leon (D-Los Angeles) is reportedly going to soon declare his own statewide candidacy. Under California’s jungle primary system, it is probable that the two Democrats could face each other in November, since both are likely to advance into the general election. Thus, we can expect to witness a yearlong campaign. Even in this scenario, Sen. Feinstein would still be rated as a heavy favorite for re-election.
Missouri: After Republican leaders wooed him for months to challenge Sen. Claire McCaskill (D), first-term Attorney General Josh Hawley (R) announced last week that he will indeed make the race. The Missouri contest could well become the Republicans’ best conversion opportunity now that Mr. Hawley is an official candidate. State Rep. Paul Curtman (R-Pacific/Franklin County) is already in the Republican primary race, as are three other minor candidates, but Mr. Hawley must be rated as a prohibitive favorite for the party nomination next August.
Sen. McCaskill was first elected in 2006, with a 49-47% victory over then-Sen. Jim Talent (R). Her re-election in 2012 came about in large part to her campaign apparatus involving itself in the Republican primary and helping choose the GOP nominee. The plan worked, and she easily defeated then-Rep. Todd Akin (R-St. Louis County), 55-39%. This year, however, she will face one of the stronger Republican challengers in the country from a state that is much further right than when she last appeared on the ballot.
Tennessee: Former three-term US Rep. Stephen Fincher (R-Crockett County) is weighing whether to enter the newly open US Senate race. Apparently, Rep. Marsha Blackburn’s (R-Brentwood) entry into the campaign has not dissuaded Mr. Fincher as he announced that he will embark upon a statewide “listening tour” to determine if he should become a Senatorial candidate. Last week, Sen. Bob Corker (R) announced that he would not seek re-election for a third term. With four top Democrats declining to run, Republicans are heavy favorites to retain the seat.
West Virginia: The two Republican candidates hoping to square off with Sen. Joe Manchin (D) next year released their third quarter financials. Attorney General Patrick Morrisey posted raising $672,000 for the period between the end of June through September 30th, as compared to just $221,000 for Rep. Evan Jenkins (R-Huntington) during the same interval. The deficit is largely explained because Mr. Jenkins didn’t have to raise a great deal of early money. He transferred over $1.2 million from his House account thus giving the two-term Congressman a substantial cash-on-hand advantage.
GA-6: The GA-6 special election held back in June set a record for congressional campaign spending, breaking the $40 million barrier for the first time in political history. The winner, Rep. Karen Handel (R-Roswell), can expect a fight in defending her seat next year. It is presumed that special election Democratic candidate Jon Ossoff will run again, but he will now have company in the Democratic primary. Earlier last week, CBS television anchorman Bobby Kaple announced that he will enter the party primary hoping to challenge Rep. Handel. With less money and hype surrounding this race, the new Congresswoman will be favored to win again, but strong competition for the seat will again exist.
MI-11: State Sen. Marty Knollenberg (R-Oakland County), son of former Congressman Joe Knollenberg (R), announced last week that he would not enter the open 11th Congressional District campaign but Plymouth Township Supervisor and former state Rep. Kurt Heise did become a candidate. The Republican field is already crowded, featuring former one-term Rep. Kerry Bentivolio, ex-state House Majority Leader Rocky Raczkowski, state Rep. Klint Kesto (R-Pontiac), and businesswoman and former Trump Michigan co-chair Lena Espstein who left the Senate race to run here. The primary will likely be competitive, but the eventual Republican nominee will have the advantage. Rep. David Trott (R-Birmingham) is retiring after two terms.
NH-1: Late two weeks ago, Granite State Rep. Carol Shea-Porter (D-Rochester), who had already been defeated twice as an incumbent, surprisingly announced that she will not run again next year. New Hampshire’s 1st District, covering the eastern part of the state including the largest city of Manchester, has seen its electorate defeat more incumbents than it has re-elected since 2006, inclusive.
Ms. Shea-Porter first won when she defeated two-term Republican incumbent Jeb Bradley eleven years ago. She was re-elected in 2008, before losing to then-Manchester Mayor Frank Guinta (R) in 2010. She returned to defeat Guinta in 2012, lost to him in 2014, and then unseated him yet again last November. It is clear that Guinta will not return for another campaign, but the Congresswoman’s decision to retire is one of the biggest surprises of this election cycle. Needless to say, this race will be rated as a toss-up for 2018.
PA-18: Now that Rep. Tim Murphy (R-Pittsburgh) has indicated he will resign his House seat on October 21st, the Republican replacement field is beginning form. State Sens. Guy Reschenthaler (R-Bethel Park) and Kim Ward (R-Greensburg) are saying they will interview for the special election nomination process, which will be decided by Republican Party committee members from the district’s four counties in lieu of a direct primary. State Rep. Rick Saccone (R-Jefferson Hills), exited his US Senate primary campaign in order to compete in the special congressional election.
Democrats will hold their own similar process. Before the Murphy resignation announcement, ex-Pennsylvania Teachers Union president Rick Crossey, former Department Veterans Affairs Assistant Secretary Pam Iovino, and physician Robert Solomon all announced their congressional candidacies. Westmoreland County Commissioner Gina Cerilli (D) announced that she, too, will stand before the various Democratic county committee members who will soon choose the special election nominee. The seat is overwhelmingly Republican, so the eventual GOP nominee will begin the special cycle as a strong favorite. Gov. Tom Wolf (D) will set the special election date once the seat is officially vacant.
Alabama: Several weeks ago, Tuscaloosa Mayor Walt Maddox indicated that he was considering entering the Democratic gubernatorial primary. Now that the field is officially forming, Mayor Maddox announced that he will officially enter the race. With new Gov. Kay Ivey being challenged in the Republican primary, Mr. Maddox feels the political climate might be such to give the eventual Democratic nominee a chance of winning the general election.
Maryland: Consultant Maya Rockeymoore Cummings, wife of Maryland US Rep. Elijah Cummings (D-Baltimore), announced that she will enter the already crowded Democratic primary to oppose Republican Gov. Larry Hogan next year. This will be Ms. Rockeymoore Cummings’ first run for elective office although she has a political background. Already in the Democratic contest are Prince Georges County Executive Rushern Baker, Baltimore County Executive Kevin Kamenetz, former NAACP President Ben Jealous, state Sen. Rich Madaleno (D-Montgomery County), and four other less prominent candidates. The general election will be highly competitive. Early polling gives Gov. Hogan leads of varying degrees against all potential Democratic nominees.
South Carolina: Attorney General Alan Wilson (R), son of US Rep. Joe Wilson (R-Springdale/ Lexington County), who had been considered a possible Republican primary challenger to Gov. Henry McMaster announced yesterday that he will seek re-election to a third term in his current position. Gov. McMaster, who ascended to the position when predecessor Nikki Haley (R) was appointed US Ambassador to the United Nations, will face a primary challenge from new Lt. Gov. Kevin Bryant and former Lt. Gov. Yancey McGill. State Rep. James Smith (D-Columbia) is the only announced Democratic gubernatorial candidate to date.
Virginia: Christopher Newport University (Wason Center; 10/2-6; 928 registered voters; 616 likely voters) finds Lt. Gov. Ralph Northam (D) leading former Republican National Committee chairman Ed Gillespie (R), 49-42%. Even though the polling sample appears a bit skewed in the Republicans favor, the ballot test results favor the Democrats from top to bottom. Without crosstabs being published, it is difficult to see why such would be the case, but the preponderance of polling data suggest that Mr. Northam has a discernible advantage, nonetheless.