Break's over: Congress returns to full banking-policy plate
February 25, 2018 10:00 PM
Andrew Harrer/Bloomberg
Break's over: Congress returns to full banking-policy plate
The clock starts ticking this week on a busy agenda of financial services priorities on Capitol Hill, including passing reforms to Dodd-Frank, overhauling the housing finance system and confirming key regulators.
The timing for congressional business is restricted this year since the midterm elections in the fall will soon start attracting all of the attention on Capitol Hill.
But banking lobbyists and the two financial services committees still have a crop of legislative initiatives they will try to get out the door. First among them is a bipartisan bill spearheaded by Senate Banking Committee Chairman Mike Crapo making targeted reforms to the Dodd-Frank Act, followed by yet another try to reform the government-sponsored enterprises Fannie Mae and Freddie Mac.
Most analysts believe the regulatory relief bill is headed to passage in the Senate, but it is still unclear what will happen when the bill gets to the House. The odds are even less certain for a GSE reform bill that continues to be bogged down by a whole host of issues.
"There are ongoing efforts in both chambers to introduce mortgage finance reform legislation, but the timing remains fluid," Isaac Boltansky, an analyst at Compass Point, wrote in a research note.
The Senate also has on its agenda remaining confirmation votes for the heads of the Federal Deposit Insurance Corp. and the Federal Reserve Board, as well as members of the Federal Reserve Board and the Financial Stability Oversight Council. Lawmakers will also may try to pass legislation to strengthen data security standards, and roll back the Consumer Financial Protection Bureau's payday rule.
The timing for congressional business is restricted this year since the midterm elections in the fall will soon start attracting all of the attention on Capitol Hill.
But banking lobbyists and the two financial services committees still have a crop of legislative initiatives they will try to get out the door. First among them is a bipartisan bill spearheaded by Senate Banking Committee Chairman Mike Crapo making targeted reforms to the Dodd-Frank Act, followed by yet another try to reform the government-sponsored enterprises Fannie Mae and Freddie Mac.
Most analysts believe the regulatory relief bill is headed to passage in the Senate, but it is still unclear what will happen when the bill gets to the House. The odds are even less certain for a GSE reform bill that continues to be bogged down by a whole host of issues.
"There are ongoing efforts in both chambers to introduce mortgage finance reform legislation, but the timing remains fluid," Isaac Boltansky, an analyst at Compass Point, wrote in a research note.
The Senate also has on its agenda remaining confirmation votes for the heads of the Federal Deposit Insurance Corp. and the Federal Reserve Board, as well as members of the Federal Reserve Board and the Financial Stability Oversight Council. Lawmakers will also may try to pass legislation to strengthen data security standards, and roll back the Consumer Financial Protection Bureau's payday rule.
Aaron P. Bernstein/Bloomberg
Senate reg relief bill
The GOP leadership has promised to bring the Senate regulatory relief bill , spearheaded by Banking Committee Chairman Mike Crapo, R-Idaho, to a vote on the Senate floor. The targeted bill, which would raise the Dodd-Frank asset threshold for being “systemically important” but exclude more controversial measures, has substantial bipartisan support from moderate Democrats. But there are some lingering doubts about whether the legislation can get done before the midterm elections, and whether conservative House Republicans will accept a plant that does not more drastically roll back Dodd-Frank.
Zach Gibson/Bloomberg
GSE reform
A lot stands in the way of an effort to overhaul the housing finance system, making it less likely to succeed than the Crapo reg relief bill in this Congress, but some in the financial industry and lawmakers like Sens. Bob Corker, R-Tenn., and Mark Warner, D-Va., do not show signs of giving up. A draft is circulating that would put Fannie Mae and Freddie Mac in receivership, and replace them with multiple guarantors (including successors to the two mortgage giants) and an explicit government backstop. But progressives say the proposed framework would hurt affordable housing efforts , and conservatives oppose any government backstop.
Andrew Harrer/Bloomberg
Confirmation votes for FDIC, Fed, FSOC and FHA
The Senate is expected to consider a crop of the Trump administration’s remaining regulatory appointees. They include Jelena McWilliams, Fifth Third’s chief legal officer and the nominee to run the Federal Deposit Insurance Corp. , whose confirmation is all but assured. The same cannot be said for Carnegie Mellon economist Marvin Goodfriend, who was approved for a seat on the Federal Reserve Board by just one vote, along party lines. Sen. Rand Paul, R-Ky., said he would oppose Goodfriend, putting his confirmation in doubt on the Senate floor where the GOP has only a one-vote majority.
The Senate is also set to consider Thomas Workman, a former president of the Life Insurance Council of New York, for a seat on the Financial Stability Oversight Council reserved for someone with insurance expertise. Meanwhile, Brian Montgomery has been awaiting Senate confirmation to become commissioner of the Federal Housing Administration since he was nominated in September.
The Senate is also set to consider Thomas Workman, a former president of the Life Insurance Council of New York, for a seat on the Financial Stability Oversight Council reserved for someone with insurance expertise. Meanwhile, Brian Montgomery has been awaiting Senate confirmation to become commissioner of the Federal Housing Administration since he was nominated in September.
Michael Nagle/Bloomberg
Data security
Earlier this month, Reps. Blaine Luetkemeyer, R-Mo., and Carolyn Maloney, D-N.Y., introduced legislation to implement nationwide standards on data breach notifications and how businesses handle and store personal data. The bill appears to have industry support and data security standards are still a hot topic on Capitol Hill just months after Equifax breach. But the latest bill would need to overcome challenges that have doomed past data security bills, including jurisdictional turf battles among various congressional committees.
Repealing CFPB payday rule
On top of industry-supported moves by acting Consumer Financial Protection Bureau Director Mick Mulvaney to roll back many polices of his predecessor, Congress is also getting into the act. In December, a bipartisan group of House lawmakers introduced legislation to repeal the CFPB’s payday lending rule under the Congressional Review Act, which allows Congress to block pending rules. But the legislative clock is ticking, since the CRA gives Congress 60 legislative days to repeal a rule from the time it is issued. (The payday rule was finalized in October.)
