Overnight Finance: Lawmakers float criminal charges for Wells Fargo chief | Scrutiny on Trump’s Cuba dealings | Ryan warns of recession if no tax reform

Lawmakers say Wells Fargo chief should face criminal charges: The head of Wells Fargo took a brutal drubbing before a House panel Thursday as members of both parties called for his job and suggested he should face criminal charges.

John Stumpf, the CEO and chairman of the board at the bank, was roundly criticized for over four hours before the House Financial Services Committee as he sought to apologize and explain how his company spent years creating potentially up to 2 million fake accounts to meet sales goals.

{mosads}But clear from the hearing was that Stumpf would find no quarter from either party, as lawmakers repeatedly painted his bank as having violated the public trust. Several described it as a “criminal enterprise.” On a committee that is usually strictly divided along partisan lines, there was broad unity in anger toward Stumpf and his bank.

“Fraud is fraud, and theft is theft, and what happened at Wells Fargo over several years cannot be described any differently,” said Chairman Jeb Hensarling (R-Texas). The Hill’s Peter Schroeder takes us there: http://bit.ly/2dhwAuw.

Waters: I want to break up Wells Fargo: The top Democrat on the House Financial Services Committee said Thursday that she is actively working to break up Wells Fargo.

Rep. Maxine Waters (D-Calif.) announced that the creation of potentially 2 million fake accounts by bank employees has led her to believe the bank is too large to be effectively managed.

“I have come to the conclusion that Wells Fargo should be broken up. It’s too big to manage,” she said. “I’m moving forward to break up Wells Fargo bank.” http://bit.ly/2daO2nM

Elizabeth Warren becomes a verb: Sen. Elizabeth Warren has hit a new milestone — she is a verb.

Rep. Emanuel Cleaver (D-Mo.) told Wells Fargo CEO John Stumpf on Thursday that he would not put him through the castigation that the Massachusetts Democrat unleashed on the bank chief last week.

“You’ve already been Warrened before I had my opportunity,” Cleaver said during a House Financial Services Committee hearing.

“So I’m not going to Warren you,” he said.

During a Senate Banking Committee hearing last week, Warren called on Stumpf to resign and face a criminal investigation in the wake of the bank’s abuses, including employees opening some 2 million fake accounts to boost sales numbers. Here’s more from The Hill’s Vicki Needham: http://bit.ly/2dhxPtE.

Heads up: We’ll have more on the fallout of the scandal later in the newsletter.

Top aide: Trump’s Cuba dealings weren’t ‘treasonous’: Donald Trump’s campaign manager is pushing back on allegations that the Republican presidential nominee’s businesses violated the embargo on Cuba in 1998.

In an appearance on ABC’s “The View,” campaign manager Kellyanne Conway was pressed about the report, with one interviewer suggesting that the actions could be treasonous.

“No, they’re not treasonous,” Conway responded with a laugh.

The Newsweek report alleges that Trump’s hotel company spent $68,000 in the country during a trip to explore possible investment opportunities and that the money was funneled through an investment firm to make it appear legal.

Conway admitted, based on her understanding of the report, that the company spent money in Cuba. But she noted that Trump has been “very critical” of the country and the Castro regime: http://bit.ly/2dy1uSb.

Ryan: Recession ‘around the corner’ without tax reform: A recession is probably “around the corner” unless Washington can overhaul the U.S. tax code and cut corporate rates, Speaker Paul Ryan warned Thursday.

The Wisconsin Republican’s remarks came during an appearance at The Atlantic’s Washington Ideas Forum, where moderator Ron Brownstein pressed Ryan about the correlation between tax cuts and job creation.

For example, the economy has added more than 11 million jobs since Barack Obama became president — and he raised taxes. His predecessor, George W. Bush, cut taxes, but saw only 1.3 million jobs created during his tenure, the political director of Atlantic Media pointed out.

Under Obama, “we’re averaging about 1 to 2 percent growth, flat wages, anemic growth,” Ryan replied. “There’s probably a recession around the corner.” The Hill’s Scott Wong explains: http://bit.ly/2dpXdLM.

Happy Thursday and welcome to Overnight Finance, where all of the energy and enthusiasm of the campaign is with this newsletter. I’m Sylvan Lane, and here’s your nightly guide to everything affecting your bills, bank account and bottom line.

Tonight’s highlights include Republican opposition to the Obama administration’s overtime and estate tax rules, how the Fed sees community bank health, worse news for the Pacific trade deal, and a new rule on paid sick leave.

See something I missed? Let me know at slane@digital-release.thehill.com or tweet me @SylvanLane. And if you like your newsletter, you can subscribe to it here: http://bit.ly/1NxxW2N.

Anti-trade senators say chamber would be crazy to pass TPP: Sen. Jeff Merkley (D-Ore.) sent a sharp warning to his colleagues Thursday: If senators approve President Obama’s Trans-Pacific Partnership (TPP) trade deal, they’re crazy. 

“The definition of insanity is doing the same thing over and over again and expecting a different outcome,” he told reporters. “If policymakers proceed to adopt the TPP they should be committed to an insane asylum.”

Merkley — as well as Democratic Sens. Sherrod Brown (Ohio), Ed Markey (Mass.), Mazie Hirono (Hawaii), and Bob Casey (Pa.) — are pushing President Obama to renegotiate the TPP before he sends the 12-country Pacific Rim pact to Congress.

Majority Leader Mitch McConnell (R-Ky.) reiterated that Thursday, telling reporters, “If we were going to have another discussion about trade, it would have to be led by whoever the next president is.” The Hill’s Jordain Carney tells us more: http://bit.ly/2deqbQ2.

Wells Fargo speeds up plans to end sales goals: Wells Fargo CEO John Stumpf said Thursday that the bank is accelerating plans to eliminate all product sales goals for retail bankers three months ahead of schedule.

Stumpf, who is back in the hot seat on Capitol Hill, told the House Financial Services Committee that the bank will drop the program at the end of this week, ahead of the Jan. 1 date initially announced earlier this month. 

He told the House panel that he takes full responsibility and deeply regrets what happened. Vicki Needham reports: http://bit.ly/2dHQHny.

California treasurer bans Wells Fargo investments amid scandal: California will no longer invest with Wells Fargo Bank after the financial giant admitted to widespread fraud in opening new consumer accounts, state Treasurer John Chiang said Wednesday.

Chiang’s office, which is responsible for managing California’s $75 billion in investments, said in a letter to Wells Fargo CEO John Stumpf that the state will suspend investments in Wells Fargo securities and cut the bank out of other financial transactions.

“I have a duty as a leader in the financial marketplace to take action aimed at helping you understand that integrity and trust matter,” Chiang wrote to Stumpf. “How can I continue to entrust the public’s money to an organization which has shown such little regard for the legions of Californians who have placed their financial well-being in its care?” The Hill’s Reid Wilson has more: http://bit.ly/2cEN7KP.

Feds expand paid sick leave to contractors: The Obama administration on Thursday finalized a rule that will expand paid sick leave to 1.15 million people working on federal contracts.

The Department of Labor rule is a byproduct from an executive order President Obama signed in September 2015. The order allows workers on a covered federal contract to earn one hour of paid sick leave for every 30 hours worked, for up to 56 hours of paid leave per year.

Under the rule, workers can use that time off for their own illness, preventative care or to care for a family member or loved one.

The direct cost for employers increased slightly from the rule proposed in February, from $18.4 million to $27.3 million per year for the first 10 years. The Hill’s Lydia Wheeler breaks it down: http://bit.ly/2cP1EC7.

GOP chairman slams SEC over Exxon investigation: Rep. Lamar Smith (R-Texas) is chastising the Securities and Exchange Commission (SEC), saying its investigation of ExxonMobil Corp. may chill legitimate climate change research.

Smith, chairman of the House Science Committee, accused the SEC of trying to enforce its favored views on climate change while punishing dissension.

In a letter Thursday to the independent regulatory agency, Smith said he sees the SEC’s probe as an extension of Democratic New York Attorney General Eric Schneiderman’s investigation into whether Exxon lied to shareholders and the public about what it knew about climate change.

Smith has embarked on a high-profile, months-long attempt to crack down on Schneiderman’s investigation and one by the Massachusetts attorney general and compel both offices to give him all of their documents regarding their probes. The Hill’s Timothy Cama explains: http://bit.ly/2cZnYGO.

Congress sends bill eliminating Olympic medal tax to Obama: The Senate signed off Thursday on making many Olympians’ medals and prize money exempt from taxes, sending the measure to President Obama’s desk.

The legislation — which cleared the House last week — would eliminate federal taxes on the value of Olympians’ and Paralympians’ medals, as well as prize money provided by the U.S. Olympic Committee. 

The Senate in July passed legislation from Sens. Charles Schumer (D-N.Y.) and John Thune (R-S.D.), but it did not include a provision excluding people with an income of more than $1 million from the tax exemption. 

Because the provision on millionaires is included in the House bill, the Senate had to pass the House legislation before it left Washington if lawmakers wanted to get the legislation to Obama’s desk before mid-November. Jordain Carney tells us about the path ahead: http://bit.ly/2daOfr8.

GOP senators press Treasury to withdraw estate tax proposal: Dozens of Republican senators are asking the Treasury Department to withdraw its proposed rules on the estate tax, arguing that the regulations would hurt family businesses.

“We ask that the proposed regulations not be finalized in their current form as they directly contradict long-standing legal precedent, create new uncertainty for taxpayers, and put family-owned businesses at a disadvantage relative to other types of businesses,” the 41 senators said in a letter to Treasury Secretary Jack Lew on Thursday.

Sen. John Thune (R-S.D.) and Senate Finance Committee Chairman Orrin Hatch (R-Utah) took the lead on the letter.

Other signers include Sens. Marco Rubio (R-Fla.), Jerry Moran (R-Kan.) and Jeff Flake (R-Ariz.), who announced Thursday that they have introduced legislation to prevent the administration from implementing the regulations. The Hill’s Naomi Jagoda tells us more: http://bit.ly/2dodm7W.

House votes to delay Obama’s overtime rule: The House passed a GOP-backed bill Wednesday night to delay the Obama administration’s controversial overtime rule from taking effect Dec. 1.

The Regulatory Relief for Small Businesses, Schools and Nonprofits Act passed mostly along party lines by a vote of 246-177, delaying for six months the rule that makes 4.2 million Americans eligible for overtime pay.

Under the rule, anyone earning up to $47,476 a year, or roughly $913 a week, would be eligible for overtime pay. The salary cutoff for overtime pay now stands at $23,660 per year.

President Obama has threatened to veto the bill. A Statement of Administration Policy said that while the legislation “seeks to delay implementation, the real goal is clear — delay and then deny overtime pay to workers.” Here’s more from The Hill’s Sarah Ferris and Cristina Marcos: http://bit.ly/2dv5Cym.

Fed: Community banks face challenges after financial crisis: Community banks across the country have faced tough business decisions in recent years as they struggle to deal with regulations and low interest rates, a Federal Reserve National Survey of Community Banks found.

The report, unveiled at a conference Thursday, cited burdens from complying with rules as the top reason community banks stopped offering specific products or services to customers.

Low interest rates and rising costs have also contributed to a challenging environment.

“Greater expenses to meet the demands of increasing regulations, the reduction of fees and interest rates to meet bank and nonbank competition, greater expenditures on cybersecurity” all “have reduced the profitability of the business,” said an industry member quoted in the survey. The Hill Extra’s Anjelica Tan has more: http://bit.ly/2cF4ypZ.

Salesforce raises Microsoft-LinkedIn antitrust concerns with EU: Salesforce.com is reportedly raising antitrust concerns over Microsoft’s planned purchase of LinkedIn with European Union regulators.

The New York Times reported Thursday that Salesforce is asking the European Commission, the executive arm of the EU, if the deal would impede access for outside companies to LinkedIn’s vast amounts of data.

They are also questioning if Microsoft could gain an unfair competitive advantage by combining its own software with LinkedIn’s user information. The Times cited three anonymous sources who aren’t authorized to speak publicly on the matter.

A Microsoft spokesperson told the Times that the deal had already been cleared by antitrust regulators in the U.S. and Canada. The Hill’s Ali Breland gets us up to speed: http://bit.ly/2dq35EO.

FCC pulls vote on contentious box plan in final minutes: The Federal Communications Commission (FCC) pulled a vote on a contentious proposal to open up the market for television set-top boxes from its agenda minutes before the start of its monthly meeting on Thursday.

The delay is a blow to FCC Chairman Tom Wheeler, who had been pitted against the pay-television industry in a fight over the reforms.

“We have made tremendous progress — and we share the goal of creating a more innovative and inexpensive market for these consumer devices,” said Wheeler and the agency’s other two Democratic commissioners, Mignon Clyburn and Jessica Rosenworcel, in a statement.

“We are still working to resolve the remaining technical and legal issues and we are committed to unlocking the set-top box for consumers across this country.” The Hill’s David McCabe explains: http://bit.ly/2dodLas.

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Write us with tips, suggestions and news: slane@digital-release.thehill.com, vneedham@digital-release.thehill.com; pschroeder@digital-release.thehill.com, and njagoda@digital-release.thehill.com. Follow us on Twitter: @SylvanLane,  @VickofTheHill; @PeteSchroeder; and @NJagoda.