Legislative Activity

Senate Banking Committee to Hold Markup of GSE Reform Bill and Vote on Nominations

On Tuesday, April 29, the Senate Banking Committee is scheduled to hold a markup of the legislation to reform the government-sponsored enterprises (GSEs), released by Chairman Tim Johnson (D-SD) and Ranking Member Mike Crapo in March and based on Senators Mark Warner (D-VA) and Bob Corker’s (R-TN) GSE reform bill introduced in 2013, the “Housing Finance Reform and Taxpayer Protection Act of 2013” (S. 1217).  On Friday, April 25, Chairman Johnson and Ranking Member Crapo released their amendment to the proposed legislation. Further, numerous amendments are expected to be considered during the markup.  Before the markup begins, the Committee will consider various nominations, including nominations to the Federal Reserved and the Department of Housing and Urban Development (HUD).  Of particular interest, the Committee will consider the nomination of Dr. Stanley Fischer as Vice-Chairman of the Federal Reserve.

House to Vote on Bill Providing CLO Fix to the Volcker Rule

On Tuesday, April 29, the House of Representatives will vote on a bill that would allow banks to hold certain collateralized debt obligations (CLOs), which are currently prohibited under the Volcker Rule’s ban on proprietary trading.  Majority Leader Eric Cantor (R-VA) has announced that the House will consider the bill under suspension of the rules.  The bill, which was introduced by Representative Andy Barr (R-KY), was reported out of the House Financial Services Committee last month (53-3 vote).

This Week’s Hearings:

  • Tuesday, April 29: The House Financial Services Subcommittee on Oversight and Investigations will meet to consider authorizing the issuance of subpoenas to compel testimony of two CFPB officials and an officer from the National Treasury Employees Union Chapter 335.
  • Tuesday, April 29: The House Financial Services Committee will hold a hearing titled, “Oversight of the SEC’s Agenda, Operations, and FY 2015 Budget Request.”
  • Tuesday, April 29: The Senate Banking Committee will meet in executive session to vote on nominations and to consider S. 1217, “Housing Finance Reform and Taxpayer Protection Act of 2013.”
  • Wednesday, April 30: The House Financial Services Subcommittee on Financial Institutions and Consumer Credit will hold a hearing titled, “Examining How Technology Can Promote Consumer Financial Literacy.”
  • Thursday, May 1: The House Financial Services Subcommittee on Capital Markets and Government Sponsored Enterprises will hold a hearing titled, “Legislative Proposals to Enhance Capital Formation for Small and Emerging Growth Companies, Part II.”

Regulatory Activity

SEC Proposes Rule on SBS Dealers and Major SBS Participants

On April 17, the Securities and Exchange Commission (SEC) released a proposed rule on recordkeeping and reporting requirements for security-based swap (SBS) dealers and major SBS participants. The proposed rule outlines recordkeeping requirements related to, among others: (1) daily trading records, (2) ledger accounts, (3) memoranda of brokerage orders, (4) memoranda of proprietary orders, (5) confirmations, (6) options positions, and (7) trial balances and computation of net capital. Similarly, the rule outlines reporting requirements related to periodic filings of Form SBS (including statements of financial condition, net capital, and income), filings of annual audited financial reports, and other reports.

President’s Working Group on Financial Markets Releases Report on TRIA

On April 17, the President’s Working Group on Financial Markets, which includes the Treasury Secretary, and the Chairs of the Federal Reserve, SEC, and Commodity Futures Trading Commission (CFTC), released its long-awaited report on “Long-Term Availability and Affordability of Insurance for Terrorism Risk” (Report).  The Report reinforces the need for TRIA reauthorization and concludes that availability and affordability of terrorism risk insurance would decline if TRIA is not reauthorized before it expires.  The Report found that, given uncertainty regarding TRIA reauthorization, the market “is tightening” and “does not have the capacity to provide reinsurance for terrorism risk to the extent currently provided by TRIA.”