Legislative Activity

Senate Banking to Host Secretary Mnuchin, Focus on Treasury

This week, the Senate Banking Committee will consider the nominations of several individuals to fill key posts within the Treasury and Commerce Departments (see below for additional details). The Committee will also host Treasury Secretary Steven Mnuchin to discuss an array of domestic and international policy issues.

The busy week for the Committee comes after last week’s hearing on housing finance reform featuring Federal Housing Finance Agency (FHFA) Director Mel Watt. Notably, Director Watt urged Congress to make legislative reforms to government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac. He stressed that the government conservatorships of the GSEs are “not sustainable” and should “end as soon as Congress can chart the way forward on housing finance reform.” Senate Banking Committee Chairman Mike Crapo (R-ID) said GSE reform is “a key priority” for Congress; Secretary Mnuchin has also expressed that GSE reform is a priority for Treasury.

This Week’s Hearings:

  • On Tuesday, May 16, the Senate Banking Committee has scheduled a hearing to consider the following nominees:
    • Ms. Sigal Mandelker to be Under Secretary for Terrorism and Financial Crimes, U.S. Department of Treasury;
    • Ms. Mira Radielovic Ricardel to be Under Secretary for Export Administration, U.S. Department of Commerce;
    • Mr. Marshall Billingslea to be Assistant Secretary for Terrorist Financing, U.S. Department of Treasury; and
    • Mr. Heath P. Tarbert to be Assistant Secretary, U.S. Department of Treasury
  • On Thursday, May 18, the Senate Banking Committee has scheduled a hearing titled “Domestic and International Policy Update.”
  • On Thursday, May 18, the House Financial Services Subcommittee on Monetary Policy and Trade has scheduled a hearing titled “Lessons from the IMF’s Bailout of Greece.”

Regulatory Activity

Treasury Department’s Review of Financial Regulations Pursuant to Executive Order Could Come in Multiple Reports; FSOC Held Second Meeting under Mnuchin

Pursuant to President Trump’s February 3 Executive Order (further discussed here), the Treasury Department is moving forward with its review of financial regulations by June 3. Sources have suggested that Treasury could issue multiple reports that extend past the June 3 deadline. In addition to the review ordered in February, President Trump also ordered Treasury to deliver reports by mid-October on Orderly Liquidation Authority (OLA) and the Financial Stability Oversight Council’s (FSOC) process for designating firms as systemically important financial institutions (SIFIs).

Relatedly, last Monday, FSOC held its second meeting under the leadership of Secretary Mnuchin. According to Treasury’s readout of the meeting, FSOC members discussed interagency coordination, the Volcker rule, the ongoing annual reevaluation of its designation of a nonbank financial company, and bank holding companies’ living wills and resolution planning.

New Acting Comptroller Leaves Questions about Future of FinTech Charter as Another Lawsuit is Filed Against the OCC

On May 5, 2017, Keith Noreika became Acting Comptroller of the Currency, leaving uncertainty about the future of the Office of the Comptroller of the Currency’s (OCC) proposed FinTech charter (further discussed here). The FinTech charter was a key initiative for former Comptroller Thomas J. Curry, whose departure comes in the midst of the OCC reviewing comments to its March draft manual on FinTech charter applications. Acting Comptroller Noreika will serve as Acting Comptroller until a replacement is confirmed. His taking over as Acting Comptroller has not been well received by Senate Democrats, who wrote a letter last week to Secretary Mnuchin alleging that Mr. Noreika does not have the proper experience and calling into question potential conflicts of interest.

Notably, the New York Department of Financial Services (NYDFS) filed a lawsuit against the OCC last week over the aforementioned FinTech charter. The suit alleges that the charter increases the “risk of exploitation” of consumers by allowing chartered FinTech firms to be exempt from certain state consumer protection laws. The Conference of State Bank Supervisors filed a similar lawsuit against the OCC last month.

President Trump to Nominate Brian Quintenz to be a CFTC Commissioner

Last week, reports indicated that President Trump will nominate Brian Quintenz, a hedge fund manager, to be a Republican commissioner at the Commodity Futures Trading Commission (CFTC). Mr. Quintenz was nominated for the same job by former President Barack Obama in March 2016. Although the Senate Agriculture Committee favorably reported his nomination to the full Senate in September 2016, Mr. Quintenz never received a vote on his nomination by the full Senate.

CFPB Academic Research Council to Meet on Wednesday

On Wednesday, May 17, the Consumer Financial Protection Bureau’s (CFPB) Academic Research Council (ARC) is scheduled to hold a meeting that will feature remarks from Acting Deputy Director David Silberman and discussion with ARC members. ARC advises the CFPB on research methodologies, data collection, and analytic strategies; and also provides feedback about research and strategic planning.