Retirement Savings Reform – a focus for the Trump Administration and Congress

On August 31, 2018, President Trump issued an Executive Order directing the Department of Labor (DOL) and Treasury Department to take action to “promote retirement security for America’s workers” by, among other things, expanding access to Multiple Employer Plans (MEPs).  Specifically, within 180 days of the issuance of the Executive Order, DOL must “consider…whether to issue a notice of proposed rulemaking, other guidance, or both, that would clarify when a group or association of employers or other appropriate business or organization could be an ‘employer.’”  Within that same timeframe, the Treasury Department must “consider proposing amendments to regulations or other guidance… regarding the circumstances under which a MEP may satisfy the tax qualification requirements…including the consequences if one or more employers that sponsored or adopted the plan fails to take one or more actions necessary to meet those requirements.”

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NAFTA is Dead, Long Live NAFTA

On September 30, 2018, the US, Mexico and Canada announced the successful conclusion of talks to replace the North American Free Trade Agreement (NAFTA). The US-Mexico-Canada Agreement (USMCA) contains a number of chapters not included in the original deal, including sections on digital commerce, currency policies and state-owned enterprises (SOEs). Other standard chapters – such as Intellectual Property, Rules of Origin, and Sanitary and Phytosanitary (SPS) Measures – have also been updated to reflect the 21st century economy. Companies operating in North America must now closely examine the deal to determine how it could impact their supply chains.  (For an actual/prospective timeline for Congressional consideration of the USMCA, click here).

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US Senate Passes Tax Reform Legislation – Here Is What You Need to Know

At two o’clock in the morning on Saturday December 2, 2017, the Senate took another major step towards accomplishing comprehensive tax reform – on a near party line vote, it passed its version of the most sweeping legislation to overhaul the US Tax Code in a generation. Although Republicans have made significant progress on tax reform – at lightning speed – they still have more work to do before the bill becomes law. This week, House and Senate leaders are expected to begin the process of conferencing their respective versions of the bill. In particular, they will have to reconcile differences between the two Chambers, including the phase-in of the corporate rate, pass-through rates, Byrd-rule compliance, repeal of the Obamacare individual mandate and the mortgage interest deduction (to name a few). With hopes of passing the reconciled bill and getting it to the President prior to December 25, 2017, the GOP could be mere weeks away from securing their long-awaited and hard-fought legislative “win.” (NB: Though we are currently predicting a formalized conference process between the two chambers, the possibility remains that the Senate will simply say to the House, “this is the best we can do – take it or leave it.”)

In our previous alerts, available here and here, we have discussed the substance of the House and Senate bills, respectively. Tax-writers have made important changes since those were published, so, in this alert, we take stock of the latest developments. Below we highlight key aspects of the Senate-passed bill, starting with a brief overview of some domestic provisions, followed by more detailed points applicable to multinationals.

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Senate Finance Committee Releases Tax Reform Proposals

The November 9 release of the Senate Finance Committee Chairman’s Mark has put into high gear the race to complete once-in-a-generation tax reform. A mere five hours after the House Ways and Means Committee completed a four-day markup and voted its legislation out of Committee along party lines (further discussed here), Senate Republicans released their “conceptual draft,” which they plan to markup on Monday, November 13. Senate Republicans hope to vote on the bill the week after Thanksgiving. A common talking point among tax policy folks is that the Senate version will control and will be handed back to the House with a take-it-or-leave-it message. That said, our preliminary review of the Senate’s conceptual draft has identified significant differences between the House and Senate proposals, suggesting a conference committee seems likely if each body passes a bill, unless the House simply accepts the final Senate bill, as it did with respect to the Senate 2018 budget resolution. We will update this portion of our assessment as the Senate Finance Committee markup continues, and as we continue to analyze the differences between the two proposals. In the event a true conference is necessary, there is no doubt that it would impact both the timing and substance of the Tax Cuts and Jobs Act. In an ideal scenario, the GOP still intends to finish tax reform by the end of the year, securing their much-needed political “win” before next year’s midterm elections.

Herein, we highlight key aspects of the Senate Republican proposal, starting with an overview of key domestic provisions, followed by points applicable to multinationals.

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House Republicans Propose Tax Reform Legislation – Will This Become Law?

It’s here! House Republicans have released the legislative text of the most serious effort to reform the US Tax Code since 1986. Republican tax-writers have come a long way from the “Blueprint” and the “Unified Framework” – they have offcially broken ground on sweeping tax reform legislation titled the Tax Cuts and Jobs Act (the Bill). Although they have made significant progress, Congress still has more work to do to pass a bill by their proclaimed end-of year target. On the other side of the Capitol, the Senate does not plan merely to rubber-stamp the House proposal. In fact, Senate Republicans intend to release their own plan next week and begin a markup during the week of November 13. With that, the content of a final bill remains uncertain at best. Although the substance of the final bill remains a work in progress, one aspect of this process is certain: there is a political imperative for Republican lawmakers to secure a “win” before next year’s midterm elections. Below, we highlight key aspects of the proposed legislation, starting with a brief overview of some domestic provisions, followed by more detailed points applicable to multinationals.

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Senate Votes to Overturn CFPB Arbitration Rule

Late last night, the US Senate voted 51 to 50 to repeal a Consumer Financial Protection Bureau (CFPB) rule prohibiting class action waivers in arbitration agreements. All but two Republicans (Senators Lindsey Graham (SC) and John Kennedy (LA)) voted to repeal the CFPB’s arbitration rule, while all Democrats voted against repeal. Vice President Mike Pence broke the 50-50 tie. In July, the House also voted to repeal the CFPB arbitration rule. President Trump is expected to sign the resolution. In a statement following the Senate vote, the president said: “By repealing this rule, Congress is standing up for everyday consumers and community banks and credit unions, instead of the trial lawyers, who would have benefitted the most from the CFPB’s uninformed and ineffective policy.”

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Tracking Anti-Opioid Legislation in Congress

“Overdose deaths, particularly from prescription drugs and heroin, have reached epidemic levels.”

-Chuck Rosenberg, Acting Administrator, Drug Enforcement Administration, October 2015[1]

Opioid abuse in the United States has been a topic of much discussion in recent years, but the problem continues to grow.  Since 1999, the number of opioid-related overdose deaths has quadrupled.[2]  In a single year from 2014 to 2015, the number of opioid-related overdose deaths increased by over 15 percent. Now, close to two-thirds of all overdose deaths involve some type of opioid.[3] The Health and Human Services Department estimates health and social costs related to prescription opioid abuse to be $55 billion.

The growing epidemic in America is a problem without a short-term solution and will require long-term thinking coupled with substantial resources from, and coordination between, authorities at the federal, state, and local government level.

On August 10, 2017, President Trump announced his intention to declare the epidemic a national emergency, and he will reportedly soon make the official declaration.  Congress, on the other hand, has yet to pass meaningful legislation or settle on a coherent strategy, settling only for minor plus ups in the appropriations process. This is despite the introduction of numerous legislative ideas.

As of August 2017, 31 bills had been introduced in Congress that aim to address some aspect of the opioid crisis.  These bills fall broadly into one of five categories:  (1) increased funding to combat the problem; (2) additional regulations for prescribers of opioids; (3) additional regulations for the sale and manufacture of opioids; (4) adjustments of the criminal aspects related to opioid sales and use; and (5) miscellaneous.

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Treasury Report on Identifying and Reducing Regulatory Burdens

As you will recall, earlier this year, President Trump issued an Executive Order requiring the Department of Treasury to identify regulations issued during the last year of the Obama Administration that would increase burdens on taxpayers and impede economic growth.  After identifying eight such regulations in an interim report released in June, Treasury last week issued a follow-up report with specific recommended actions.

  • Final and Temporary Regulations under Section 385 on the Treatment of Certain Interests in Corporations as Stock or Indebtedness

Treasury plans to propose revoking the Section 385 documentation regulations and replacing them with streamlined documentation rules. According to Treasury, the proposed rule should include an effective date that would allow sufficient time for comments and compliance. The proposed streamlined documentation rules are expected to modify the requirements related to a reasonable expectation of ability to pay indebtedness and treatment of ordinary trade payables.

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US Tax Reform – A Global View (Tax Strategy & Benefits Podcast)

Following the publication of the Tax Reform Framework, members of our Tax Strategy & Benefits team sat down to discuss the key policy announcements and consider what is likely to happen next and the possible ramifications for businesses in the US and around the world. We have recorded their conversation as a podcast.

The panel, drawing on our global tax policy and transactional expertise, comprises:

  • Linda Pfatteicher, managing partner, Tax Strategy & Benefits, San Francisco and Palo Alto (Chair)
  • Matthew D. Cutts, chair, Financial Services & Tax Public Policy, Washington DC
  • Mitch Thompson, deputy practice group leader, Tax Strategy & Benefits, Cleveland
  • Jeremy Cape, partner, Tax Strategy & Benefits, London
  • Bernhard Gilbey, practice group leader, Tax Strategy & Benefits, London

To listen to the podcast, please click here.

If you have any questions about the issues raised and discussed during this podcast, please contact a member of the panel, any other member of our Tax Strategy & Benefits team or your usual firm contact.

The Path to Tax Reform: Without a Blueprint, Where Are We Headed?

With Congress back in session following its August recess, one agenda item stands above the rest in terms of priority: tax reform.

After several failed attempts at repealing the Affordable Care Act earlier this year, and with few other major achievements nearly nine months into the 115th Congress, Republicans are in need of a win and hoping it might come in the form of reforming the nation’s tax laws. Still, there remain many obstacles that could derail their quest for tax reform.

How Did We Get Here?

As we discussed more than a year ago, the House Republican tax reform “blueprint” served mostly as a conversation starter about tax reform. However, since its release, many of the House Republicans’ proposals – the border adjustable tax (BAT), in particular – received pushback from a variety of industries and ultimately forced tax-writers to reassess their approach to tax reform.

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NAFTA Modernization Talks – Round One Completed; Next Stop, Mexico

The first round of 5-day negotiations to modernize the North American Free Trade Agreement (NAFTA) concluded on August 20. In a joint statement released by trade officials from the United States, Mexico and Canada, they restated the commitment to updating the deal, continuing domestic consultations, and working on draft text. They also committed to a comprehensive and accelerated negotiation process to bring the agreement up to 21st Century standards to continue benefiting the citizens of North America.

Our sister publication, Latin America Legal, provides a recap for the first round of talks here. The negotiations are expected to resume in Mexico beginning September 1 and goes through September 5. The third and last round is scheduled to be in Canada, reportedly around September 23-27.

Federal Communications Commission Tackles the “Reassigned Number Problem”

Reassigned numbers have been at the center of the surge in litigation under the Telephone Consumer Protection Act (“TCPA”) during the last few years.  By now the story is well known to businesses that actively communicate with their customers: the customer consents to receive telemarketing and/or informational robocalls[1] at a wireless telephone number, but months or years later the customer changes his or her wireless telephone number and—unbeknownst to the business—the telephone number is reassigned to a different person.  When the recipient of the reassigned number starts receiving calls or messages from the business, a lawsuit often ensues under the TCPA because that party has not consented to receive such calls.  The FCC adopted on July 13 a Second Notice of Inquiry (“Second NOI”) that promises to address this problem in a meaningful way.  Specifically, the Second NOI focuses on the feasibility of “using numbering information to create a comprehensive resource that businesses can use to identify telephone numbers that have been reassigned from a consumer who has consented to receiving calls to a consumer who has not.”

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Trump Administration Releases NAFTA Negotiating Objectives

On July 17, the Trump Administration released its negotiating objectives for the upcoming renegotiation of the North American Free Trade Agreement (NAFTA).  The detailed objectives can be found here, and a press release from the Office of the U.S. Trade Representative can be found here.

Senate Updates the Better Care Reconciliation Act of 2017

On Thursday, July 13, Senate Republicans released their updated draft of the Better Care Reconciliation Act of 2017.  A PDF of the updated text can be accessed here.

We found the following documents and articles helpful:

  • An updated Congressional Research Service Section-by-Section for Titles I and II of the Better Care Reconciliation Act of 2017 (link)
  • A summary of the newly included Title III (link)
  • The Washington Post’s Sean Sullivan, Kelsey Snell, and Juliet Eilperin provide an overview of the revised bill (link)

The Latest on Fintech: Federal and Beyond

As one of the most rapidly growing industries in the financial services sector, financial technology (fintech) is receiving significant attention in the nation’s capital and around the world.

This article analyzes and provides updates on recent key fintech developments at the regulatory level, on Capitol Hill, and in the courts – including a brief update on the international regulation of the fintech industry.  A PDF version of this article can be found here.


In March of this year, the Office of the Comptroller of the Currency (OCC) released a draft supplement to its licensing manual on the licensing of special purpose fintech banks (analyzed in greater detail here). The OCC provided an opportunity for public comments on the licensing supplement, a move intended to be consistent with the agency’s guiding principles of transparency and fostering open dialogue with stakeholders.

The comment period closed on April 14, and since that time, we understand that the OCC has decided to press “pause” on considering applications for and issuing fintech bank charters for entities that would not be accepting deposits. Though the agency has yet to clarify what its next steps will be regarding issuing fintech bank charters to entities not already eligible for a national bank charter, there are a few critical factors likely to impact how the OCC ultimately decides to proceed.

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