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Senate Banking advances Fed, FHFA nominees after Raskin withdraws

Sarah Bloom Raskin, President Biden’s nominee to be Vice Chair of the Federal Reserve Board for Supervision, asked the President to withdraw her nomination on last Tuesday after it became clear that confirmation would be impossible. The , saying that she had been “subject to baseless attacks from industry and conservative interest groups.” On Wednesday, the Senate Banking Committee on the nominations of Sandra Thompson to be Director of the Federal Housing Finance Agency and Jerome Powell to be Chairman, Lael Brainard to be Vice Chair, and Dr. Philip Jefferson to be a Governor of the Federal Reserve Board. The vote was tied for Dr. Lisa Cook, also nominated to be a Governor of the Fed; her nomination will proceed to the Senate floor as well, but will require an additional procedural vote.

CDFIs, MDIs helped underserved businesses get PPP loans

It will probably be years before the government figures out just how many loans made under the Payment Protection Program (PPP) were fraudulent, the GAO’s Director of Financial Markets and Community Investment . Early reports suggest that loans made by non-bank financial companies were more likely to be fraudulent than those made by traditional lenders, but the first phase of PPP lending, which flowed almost exclusively through banks, didn’t reach many of the businesses that needed help most urgently. Community Development Financial Institutions (CDFIs), Minority Depository Institutions (MDIs), and community banks were much more successful than large banks in delivering PPP funds to underserved small businesses, and subcommittee members discussed whether they should play a bigger role in non-emergency Small Business Administration lending programs.

CDFIs can be greater sources of capital for entrepreneurs

Community Development Financial Institutions were also a discussion topic at last Wednesday’s , where witnesses said that mission-driven lenders are often better equipped than big banks to work with small entrepreneurs and founders of startups, especially in underserved communities. Americans launched approximately 10 million new businesses during the pandemic, and capital access becomes critical when these businesses outgrow their initial sources of funding. Witnesses told the panel that it is “operationally inefficient” for big banks to make these loans. Channeling capital through CDFIs and other mission-driven lenders can be more efficient, and larger banks might be able to earn Community Reinvestment Act credit by purchasing the loans.

Can Russia use cryptocurrency to evade sanctions?

Industry experts that while cryptocurrency is the payment form of choice for international cybercriminals and ransomware attackers, it is unlikely that Russia would be able to use digital assets to neutralize global economic sanctions. For one thing, no one’s accepting rubles as payment. Blockchain transactions are recorded on a public ledger, and Jonathan Levin of Chainalysis described how his firm tracks these exchanges to identify and alert law enforcement to potentially illicit activity. Michael Chobanian, testifying for the Blockchain Association of Ukraine, described how the Ukrainian government’s ability to solicit donations in digital currency had sped up the delivery of international aid.

Treasury, Justice launch multilateral Russian oligarch task force

As global sanctions against Russia and its leaders intensify, Secretary of the Treasury Janet Yellen and Attorney General Merrick Garland met virtually with their counterparts in Australia, Canada, Germany, France, Italy, Japan, the United Kingdom, and the European Commission on Wednesday to launch the . The US and its allies have already seized hundreds of millions in tangible assets such as yachts belonging to Russian oligarchs. The Justice Department’s new is investigating and prosecuting sanctions evasion, including attempts to evade sanctions through the use of cryptocurrency. At Treasury, the Financial Crimes Enforcement Network (FinCEN) announced its plans to work with the REPO task force, and issued a telling financial institutions to immediately report any suspicious transactions involving “sanctioned Russian elites and their proxies,” with the reference code FIN-2022-RUSSIALUXURY.

House Financial Services Committee approves legislation to punish Russia, help Ukraine

The House Committee on Financial Services to tighten economic sanctions on Russia, make it easier for FinCEN to chase down Russian oligarchs, and relieve Ukraine’s international debt burden. , introduced by Rep. Ann Wagner (R-MO), would exclude Russian government officials from the G-20, the Financial Stability Board, and other international standard-setting bodies. , introduced by Rep. French Hill (R-AR), seeks to block Russia’s and Belarus’s access to hard currency through Special Drawing Rights at the International Monetary Fund.

House passes bill to prohibit mandatory arbitration

The House voted along party lines to approve , the FAIR Act of 2022, which would invalidate mandatory arbitration clauses in any dispute involving employment, consumers, antitrust, or civil rights. The bill, introduced by Rep. Hank Johnson (D-GA), has 203 Democratic cosponsors. A Senate companion introduced by Senator Richard Blumenthal (D-CT), S. 505, is pending in the Senate Judiciary Committee. Senate Banking Committee Sherrod Brown (D-OH) held a hearing last week on his own bill, the , which would ban forced arbitration clauses in consumer contracts.


Confirmations, Nominations, Departures


The Securities and Exchange Commission has , effective April 11. Sanchez was an Attorney Fellow in the Office of Municipal Securities from 2010 to 2013, and helped draft the rules creating a permanent registration regime for municipal advisors.

Former US Representative and longtime member of the House Appropriations Committee Victor Fazio (D-CA) . Fazio represented the Sacramento area from 1979 to 1999, and chaired the House Democratic Caucus from 1995 to 1999.


The Week Ahead in Washington


The House is not meeting in Washington this week. Much of the Senate’s attention will be focused on the confirmation of Supreme Court nominee Ketanji Brown Jackson, who will appear before the Judiciary Committee for , Monday through Thursday.

March 22 at 10:15 a.m. Senate Committee on Banking, Housing, and Urban Affairs holds a hearing on “.”

March 22-23 The Bank for International Settlements (BIS) holds its second , focusing on Money and Payments on March 22 and on Technology and Innovation on March 23. Federal Reserve Board Chairman Jerome Powell will participate in a central bank governors panel discussion at 8:00 a.m. EDT on March 23. The summit is virtual, and .

March 23 at 10 a.m. Senate Committee on Commerce, Science, and Transportation holds a hearing on “.”

March 24 at 10 a.m. Senate Banking Committee holds a hearing on “.”


The Ellis Insight

Jim Ellis reports on political news



Alabama: A new McLaughlin & Associates poll (3/10-13; 500 AL likely Republican primary voters; live interview & text) finds a new leader in the Senate race and suggests the original favorite may not even qualify for a runoff.

The McLaughlin ballot test projects Black Hawk Down pilot and Alabama defense business owner Mike Durant leading former Business Council of Alabama President & CEO Katie Britt, 34-32%, with US Rep. Mo Brooks (R-Huntsville), who carries former President Donald Trump’s endorsement, falling to just 18% support. The Alabama primary is May 24th. If no one reaches the 50% plateau, the top two finishers will advance to a June 21st runoff election.

Missouri: Many Republican leaders have been expressing fear that should resigned Governor Eric Greitens win the party’s open US Senate nomination, the general election could be lost. Mr. Greitens left the Governor’s office in 2018 because of legal charges and an extramarital affair. The charges were later dropped due to prosecutorial misconduct, but evidence of the affair was clear.

A new Trafalgar Group survey (3/9-13; 1,075 MO likely Republican primary voters; live interview, interactive voice response, online, and text) gives credence to the previous analysis. Paired individually with two Democrats, Mr. Greitens only ties former state Sen. Scott Sifton, 45-45%, and holds the smallest of leads, 46-45%, over Iraq/Afghan War veteran Lucas Kunce.

Yet, US Rep. Vicky Hartzler (R-Harrisonville/Columbia) would defeat Sifton, 57-37%, and Kunce, 56-39%. Attorney General Eric Schmitt (R) would also easily top the two Democrats (Sifton: 54-40%; Kunce: 55-40%). Earlier, in their 2/22-24 Republican primary poll, Trafalgar posted Mr. Greitens to a 31-23-17% Republican primary lead over Mr. Schmitt and Rep. Hartzler, respectively. Incumbent Sen. Roy Blunt (R) is not seeking a third term.

North Carolina: After two released February North Carolina Republican US Senate polls found former Gov. Pat McCrory opening up an 11-point lead over US Rep. Ted Budd (R-Advance) in the open Senate race, a new Meeting Street Insights survey (2/26-3/1; 500 NC likely Republican primary voters; live interview) shows the race in much closer territory. The MSI results project Mr. McCrory’s lead to be a tighter 31-25%.

The North Carolina primary is May 17th. Sen. Richard Burr (R) is not seeking a fourth term. Mr. McCrory was elected Governor in 2012, but defeated for re-election in 2016. Rep. Budd, who earned former President Donald Trump’s endorsement, was elected to the state’s 13th Congressional District in 2016.

Oklahoma Special: Former US Rep. Kendra Horn (D), who represented the Oklahoma City district for one term before losing in 2020 to current Rep. Stephanie Bice (R-Oklahoma City), announced that she will enter the special US Senate election to replace resigning Sen. Jim Inhofe (R).

The move is a curious one in that Oklahoma is strongly Republican and should be even more so in what most observers and analysts feel will be a favorable GOP political climate this November. Ms. Horn certainly gives the Democrats a credible standard bearer and will likely become a consensus candidate for the party nomination. Her chances for a general election victory, however, are slim.

On the Republican side, it was originally expected that US Rep. Kevin Hern (R-Tulsa) would join the Senate field, but such will not be the case. Last week, the Congressman announced that he would seek re-election. The Senate field is crowded and Rep. Hern would have to risk his safe House seat and position on the Ways & Means Committee, a point he made last week when hedging about whether he would join the Senate special election contenders.


CA-41: After California state Senator Melissa Melendez (R-Lake Elsinore) opened a Lt. Governor campaign committee but chose not to pursue the race only to announce against US Rep. Ken Calvert (R-Corona), she again did an about face just as candidate filing closed. Sen. Melendez did not enter the congressional race, meaning Rep. Calvert dodges what could have been a strong challenge. Four candidates are on the ballot against him, the most viable being Democratic former federal prosecutor Will Rollins. Rep. Calvert is favored to win a 16th term in November.

FL-15: Saying that, “seeing what’s happened in the last few years has just forced me to get off the sidelines and get back in the game…” former four-term US Rep. Dennis Ross (R), as quoted in the Daily Kos Elections site, indicated that he will again file for Congress in what is expected to be a new open seat. The proposed map that passed the legislature features an open district containing much of the area east of Tampa that Mr. Ross previously represented.

Gov. Ron DeSantis (R) has threatened to veto the congressional map, so redistricting is not yet complete. Most of the prospective congressional map versions, including the plan that awaits the Governor’s action, features an open seat in the Hillsborough County area so the chances of seeing such a district in the eventual final map are high. Florida gained one seat in national reapportionment bringing the delegation size to 28 districts.

FL-20: The special 2021 Democratic primary election that saw current Rep. Sheila Cherfilus-McCormick (D-Miramar) winning by just five votes will likely host a re-match only between the new Congresswoman and her closest previous challenger.

Former Broward County Commissioner Barbara Sharief (D), who originally indicated she would return to run again for Congress, is now saying that she will more likely challenge state Senate Minority Leader Lauren Book (D-Plantation). Former Broward County Commissioner Dale Holness, who finished just five votes behind the primary winner, has already announced that he will contest the new incumbent for re-nomination in the August 23rd Democratic primary.

ME-2: Major party candidate filing concluded last Tuesday and Rep. Jared Golden (D-Lewiston) is unopposed for re-nomination. Former Rep. Bruce Poliquin (R) is returning for a re-match of their 2018 campaign, a battle that Mr. Golden won through Ranked Choice Voting despite finishing behind Mr. Poliquin in the regular election. The former Congressman faces only Caratunk First Selectman Liz Caruso in the Republican primary. Caratunk is a northern Maine town of just 69 people.

The Minor Party & Independent candidate filing deadline is not until July 6th. At that point we will see how many other candidates will be on the ballot and could again force the election into the Ranked Choice Counting method. If no candidate receives 50% in an election, the ranked selection counting process begins once the election has concluded. Voters rank their selections when casting their ballot in the regular election.

The system can only be used in Maine’s federal elections and party primaries. The state Supreme Court ruled the Maine constitution recognizes plurality election victories, but claims it has no jurisdiction over federal or party primary contests.

MI-4: Former President Donald Trump extended his congressional endorsement to Michigan Rep. Bill Huizenga (R-Holland) in his Republican primary battle against Rep. Fred Upton (R-St. Joseph). Following Trump’s declaration, his pre-redistricting endorsed candidate, state Rep. Steve Carra (R-Kalamazoo), announced that he is exiting the congressional race and will seek re-election to the state House.

Like in the other districts of Republican incumbents who voted for the Trump impeachment, the former President is actively campaigning for their defeat. Rep. Upton is one of the ten GOP members who voted to remove him in the final days of his term. Because Michigan lost a congressional seat in national reapportionment, Reps. Huizenga and Upton were paired in a new southwestern Michigan 4th CD. Though he has already been running media ads, Rep. Upton still maintains he has not yet fully decided to seek re-election. The candidate filing deadline is April 19th for the August 2nd primary.

MN-1: Candidate filing also closed for the special election to replace the late Rep. Jim Hagedorn (R-Blue Earth/Rochester), who passed away on February 17th. A total of ten Republicans, eight Democrats, and two minor party candidates filed for the May 24th special primary election.

Among the ten Republicans are the candidate’s widow, former Minnesota Republican Party chair Jennifer Carnahan, and state Reps. Jeremy Munson (R-Lake Crystal) and Nels Pierson (R-Rochester), along with former state Rep. Brad Finstad. Ex-White House Counsel Richard Painter leads the Democratic contingent. Democrat Dan Feehan, who ran two close elections against Mr. Hagedorn, chose not to enter the special election.


Alabama: The aforementioned McLaughlin & Associates survey (see Alabama Senate above) also tested the GOP gubernatorial primary in which incumbent Kay Ivey is facing a challenge from real estate developer Tim James, son of former Governor Fob James, and ex-US Ambassador to Slovenia Lindy Blanchard. The ballot test finds the Governor winning the May 24th primary outright, posting a 60-13-10% wide spread against Mr. James and Ms. Blanchard, respectively.

Nevada: Public Policy Polling tested the Republican gubernatorial primary (3/7-8; 580 NV likely Republican primary voters; automated phoning & text) and sees Clark County Sheriff Joe Lombardo building a strong lead against former US Senator Dean Heller and North Las Vegas Mayor John Lee. The original ballot question projects the Sheriff holding a 26-13-13% advantage over his two major opponents.

Former Senator Heller’s comeback — he was defeated for re-election in 2018 — has so far not gone well as he continues to lag well behind with voters from his own party. Before serving in the Senate, Mr. Heller was a US House member, the Nevada Secretary of State, and a state Assemblyman.

New Hampshire: State Sen. Tom Sherman (D-Rye), a physician who represents the southeastern New Hampshire area known as the Seacoast, announced that he will challenge Gov. Chris Sununu (R) later this year becoming the first credible Democrat to enter the state’s 2022 gubernatorial race. Gov. Sununu is attempting to become only the second Governor to win four consecutive two-year terms. Former Gov. John Lynch (D-serving 2005-13) is the only office holder to have won four terms to the state’s highest office.

After winning a three point victory in his first election in 2016 with 49% of the vote, Gov. Sununu, currently the most popular elected official in New Hampshire, has averaged 59% in his subsequent re-election campaigns. He has also made comments indicating that he is considering a 2024 presidential run.


Maryland: In response to the legal haggling over the Maryland redistricting maps and understanding that the cases will not likely conclude before the state’s March 22nd candidate filing deadline, the state Court of Appeals moved the June 28th primary election to July 19th, and the candidate declaration deadline from the aforementioned March 22nd to April 15th.