OVERNIGHT FINANCE: Banking chairman readies Fed reform bill
TOMORROW STARTS TONIGHT: EXCLUSIVE – – > RICHARD SHELBY’S FED BILL. My latest for the hometown paper: Senate Banking Committee Chairman Richard Shelby (R-Ala.) is close to unveiling legislation that reforms the Federal Reserve, according to multiple sources familiar with the bill.
Here’s what I know:
1.) Shelby’s bill is aiming to bring more transparency to the Federal Reserve. The bill would establish a Congressional commission for restructuring the Federal Reserve, according to a source who was briefed on the still-unreleased bill. The central bank would be required to implement the commission’s recommendations absent a joint resolution of disapproval from Congress, according to the source. The current draft of the bill includes a provision from Sen. Jack Reed (D-R.I.) that would make the New York Fed president subject to presidential nomination and Senate confirmation. It’s part of an effort to increase oversight and give more power to regional Federal Reserve Banks in routine Fed operational decisions and away from the Board of Governors.
{mosads}– QUICK TAKE: Shelby’s bill could garner more support than Sen. Rand Paul’s (R-Ky.) “Audit The Fed” legislation, which doesn’t have a Congressional chance. Many of the measures would attract bipartisan support. But where Shelby digs his partisan heels in is on requiring Fed policymakers to use a “mechanical rule” to set monetary policy, which has seen opposition from House Democrats and doesn’t have bipartisan backing.
2.) Shelby’s bill would make it harder for regulators to designate a financial institution as “systemically important.” Shelby would also make changes to how the Financial Stability Oversight Council (FSOC) designates an institution as a systemically important financial institution (SIFI). He would increase the threshold from $50 billion to $500 billion for SIFI-designation. You already know: If regulators designate a firm as a SIFI, the firm is subject to more regulations. This is likely to upset progressives like Sen. Elizabeth Warren (D-Mass.).
3.) Shelby’s bill is at the mercy of moderate Democrats. Shelby still needs to clear the 60-vote procedural hurdle in the Senate and it’s unclear if he can wrangle enough votes. A top banking lobbyist was blunt with me: Shelby’s ability to get the bill a vote on the Senate floor will hinge largely on moderate Democrats like Sens. Heidi Heitkamp (D-N.D.), Jon Tester (D-Mont.), Mark Warner (D-Va.) and Joe Donnelly (D-Ind.). “It all comes down to those four,” said a top banking lobbyist. “If Sen. Shelby doesn’t go with something that moderate Democrats find offensive — he gets it through.”
All of that and more in my exclusive for The Hill: http://bit.ly/1EluM73
THIS IS OVERNIGHT FINANCE. And tomorrow is Friday. Mother’s Day is Sunday. Thank you for reading The Hill’s financial tip-sheet. Tweet: @kevcirilli; email: kcirilli@digital-release.thehill.com; and subscribe http://digital-release.thehill.com/signup/48. Back to work…
COMING TOMORROW MORNING: My latest on Sen. Elizabeth Warren’s (D-Mass.) effort to get more regulations on the auto-dealer industry.
FIDUCIARY FIGHT: DEMS WANT EXTENSION ON COMMENT PERIOD. My latest on increasing Democratic dissatisfaction with the White House financial adviser rules: Democrats are urging the administration to extend the public comment period on new regulations for financial advisers. Rep. Frederica Wilson (D-Fla.) circulated a House Democratic letter that garnered 18 signatures, asking Labor Secretary Thomas Perez to add 45-days to the 75-day comment period on the regulations. Sen. Jon Tester (D-Mont.) circulated a Senate letter that nabbed eight Democrats plus Sen. Angus King (I-Maine) for an extension of the comment period by 45-days. http://bit.ly/1csHviD
TRADE WATCH: SANDY LEVIN VERSUS THE WHITE HOUSE. Vicki Needham: “The Obama administration’s full-court press on trade isn’t racking up enough Democratic votes to move the president’s agenda through Congress, Rep. Sandy Levin (D-Mich.) said Thursday.” http://bit.ly/1cs68Mr
BITCOIN NEWS: Still care about Bitcoin? Cory Bennett: “The U.S. now has its first bitcoin exchange that will be regulated as a bank. New York’s top financial regulator on Thursday granted a charter to bitcoin exchange itBit, which gives people a platform to buy and sell bitcoins. It’s the first virtual currency company to receive a charter from the New York Department of Financial Services, a significant win for bitcoin entrepreneurs looking to bring legitimacy to the digital currency.” http://bit.ly/1F16MuN
DAYS UNTIL EX-IM SHUTS DOWN: 53. The Atlanta Journal Constitution: “Up in Washington, we’ve got a split in Georgia’s Republican congressional delegation forming over the continued existence of the Export-Import Bank.
“We told you that U.S. Rep. Buddy Carter, R-Savannah, is taking heat from Club for Growth over his support for the agency, which underwrites trade deals between U.S. companies and their foreign customers. The bank’s authority is set to expire June 30. But the conservative agitators at Heritage Action for America report that another Georgia freshman, U.S. Rep. Jody Hice, R-Monroe, has come out against extending the Export-Import Bank.” http://on-ajc.com/1FSa3NJ
FAST FACTS: AMERICANS AND POVERTY. Rebecca Shabad: “Sixteen percent of the public is happy with how the federal government combats poverty, a new low in a 15-year trend measured by Gallup.” http://bit.ly/1Kn8Pco
EX-PATS GIVING UP CITIZENSHIP. Pete Schroeder: “A record 1,335 Americans living overseas renounced their citizenship in the first three months of 2015, according to the Internal Revenue Service. That number is 18 percent higher than the previous record, according to Bloomberg. In all of 2014, 3,415 individuals gave up their U.S. citizenship, the second straight year when renouncements hit a new record high.” http://bit.ly/1H4u84T
— OVERNIGHT MUSINGS: Why would any American give up their citizenship? That makes no sense. We are the greatest country on earth.
IRAN WATCH: Jordain Carney: “The Senate voted overwhelmingly Thursday to approve legislation allowing Congress to review a nuclear deal with Iran in a 98-1 vote.” http://bit.ly/1ETdVfx
TRANSPORTATION WATCH, via Keith Laing: “Transportation advocates are running radio ads in the districts of Congressional leaders in both parties over a looming deadline for federal transportation funding that is set to expire on May 31. The campaign, which is being conducted by the American Road and Transportation Builders Association (ARTBA) and the American Public Transportation Association (APTA), is intended to pressure lawmakers to pass a long-term extension of the infrastructure measure instead of a temporary patch that is rumored to be being considered.” http://bit.ly/1IlSs0V
— Meanwhile, as Laing reports: “A group of Senate Democrats slammed Republicans on Thursday for considering a temporary patch of federal transportation funding that is scheduled to expire May 31. Republicans in the House have raised the possibility of passing an $11 billion stopgap that would extend funding until the end of the year, but Democrats in the Senate said GOP leaders should be working on a long-term extension.” http://bit.ly/1PsEYRo
WARREN: DODD-FRANK IS WORTH IT. Today’s must-read by Kate Davidson for WSJ: “Few policy debates make the average American’s eyes glaze over faster than the debate over the costs and benefits of the 2010 Dodd-Frank law. But few debates rile up lawmakers and wonks more.
“Nearly five years after Congress passed the mammoth regulatory overhaul, the law’s critics and supporters are still arguing over whether lawmakers took justifiable steps to prevent another financial crisis, or whether they overreached with rules that could limit Americans’ access to credit and hurt the overall economy.
Citing some studies that show the last crisis cost up to $14 trillion, supporters argue there is no question: The financial overhaul law was worth it. ‘Rules are not the enemy of the markets,’ Sen. Elizabeth Warren (D., Mass.) said Tuesday at a conference hosted by the Institute for New Economic Thinking, a liberal think tank. ‘Rules are a necessary ingredient for healthy markets.'” Davidson’s report: http://on.wsj.com/1H4xBR5
MILLENNIAL MATTERS, via Eric Morath for WSJ: “Children of millennials can thank their moms (and dads) for bringing home the bacon this Mother’s Day. Millennial parents are twice as likely to increase the amount they work after having children, compared with some of their Generation X peers, according to a new survey from tax and professional services firm EY.” http://on.wsj.com/1JSG3Uo
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