Overnight Finance: Wells Fargo could pay $1B fine | Dems seek info on loans to Kushner | House to vote on IRS reform bills | Fed vice chair heading before Congress

Happy Friday and welcome back to Overnight Finance, where we’re basking in spring weather. I’m Sylvan Lane, and here’s your nightly guide to everything affecting your bills, bank account and bottom line.

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.

 

LEADING THE DAY

Wells Fargo could pay up to $1 billion in fines to two federal regulators to settle claims they inappropriately charged customers for unnecessary or unwanted banking and insurance products, the bank revealed Friday.

The San Francisco-based bank said in its first quarter earnings report that it’s preparing to pay a fine to the Consumer Financial Protection Bureau (CFPB) and Office of the Comptroller of the Currency (OCC).

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The CFPB and OCC have been investigating Wells Fargo over reports that the bank charged customers for auto insurance products they did not need, along with unnecessary fees to lock in mortgage interest rates.

Wells Fargo cautioned that the bank is “unable to predict final resolution of the CFPB/OCC matter and cannot reasonably estimate our related loss contingency.”

Both the OCC and CFPB declined to comment. Here’s more from me on the potential fine.

 

You can also add Citigroup to the list of banks under federal scrutiny. Top Democrats are reportedly pushing for answers on $500 million in loans granted to Kushner Companies last year by a pair of Wall Street firms after representatives for the two firms took part in White House meetings.

ABC News reports that lawmakers, including Sens. Elizabeth Warren (D-Mass), Tom Carper (D-Del.) and Gary Peters (D-Mich.) and Rep. Elijah Cummings (D-Md.), sent a pair of letters Friday to Citigroup and Apollo Global Management (AGM) demanding information about the loans.

The letters accuse Citigroup and AGM of not providing adequate information following a request made in March for information and documents related to all meetings between the firms and Kushner Companies employees. Here’s more on the requests from John Bowden.

 

ON TAP NEXT WEEK

 

Monday:

• House Rules Committee: Hearing on HR 5445, the “21st Century IRS Act,” 5 p.m.

Tuesday:

• House Financial Services Committee: Hearing on the semi-annual testimony on the Federal Reserve’s supervision of the financial system, with Fed Vice Chairman of Supervision Randal Quarles, 10 a.m.

• House Ways and Means Committee: Hearing on federal perspectives on the jobs gaps, 10 a.m.

• Federal Deposit Insurance Corporation: Meeting on interagency capital rule, 10 a.m.

• Senate Banking Committee: Hearing on the nominations of Thelma Drake to be Federal Transit Administrator, Department of Transportation, Jeffrey Nadaner to be an Assistant Secretary of Commerce, and Seth Daniel Appleton to be an Assistant Secretary of Housing and Urban Development, 10 a.m.

• House Small Business Committee: Hearing entitled “Small Business Retirement Plans and the IRS’ Employee Plans Fee Change,” 10 a.m.

• House Financial Services Committee: Hearing on housing choice vouchers, 2 p.m.

• House Judiciary Committee: Hearing on protecting trade secrets in the U.S., 2 p.m.

• Brookings Institution: Event entitled “Digital currencies: Implications for central banks,” 2 p.m.

• Brookings Institution: Event entitled “How to reform the global monetary system: A pathway to action,” 4 p.m.

 

Wednesday:

• Joint committee on multiemployer pensions: Hearing on the history and structure of the multiemployer pension system, 2 p.m.

 

Thursday:

• Senate Banking Committee: Hearing on the semi-annual testimony on the Federal Reserve’s supervision of the financial system, with Fed Vice Chairman of Supervision Randal Quarles, 9:30 a.m.

• Global Finance Forum sponsored by American Investment Council (AIC), Futures Industry Association (FIA), Investment Company Institute (ICI), Managed Funds Association (MFA), Securities Industry and Financial Markets Association (SIFMA), and the U.S. Chamber of Commerce Center for Capital Market Competitiveness, 7 a.m.

 

NEXT WEEK’S NEWS, NOW

Quarles appears before Congress: Randal Quarles, the Fed’s vice chair of supervision, will appear before Congress for the first time since his October confirmation. The Fed’s pointman on financial regulation, Quarles will detail the ways the central bank is planning to amend Dodd-Frank Act rules in an effort to ease burdens on smaller banks.

The Fed this week released two rulemaking proposals–one on an adjusted capital buffer and another on changes to supplementary leverage ratio–that loosen two measures in Dodd-Frank meant to ensure bank stability.

Quarles is also expected to field a slew of questions on how the Fed plans to amend the Volcker Rule, and how it would use its broad authority to tailor regulations under a bipartisan Senate bill to roll back Dodd-Frank that’s pending before the House.

Quarles is seen as ideologically close to Fed Chairman Jerome Powell, a fellow moderate Republican and Treasury Department deputy with extensive private sector experience. Powell has backed moderate changes to the Dodd-Frank that have earned support from his predecessor Janet Yellen, a Democrat.

While Democrats fear Quarles could push for sweeping changes to Dodd-Frank, he’s expected to call for smaller overhauls of the rules it mandated the Fed to write and enforce.

 

House to vote on IRS bills next week: The House will mark the April 17 tax-filing deadline by voting next week on bipartisan bills aimed at modernizing the IRS, House Majority Leader Kevin McCarthy (R-Calif.) announced Friday.

The votes will follow approval of the bills by the House Ways and Means Committee on Wednesday.

One of the bills the House will consider makes changes to the IRS aimed at improving its customer service and appeals process and boosts taxpayer rights during the enforcement process. A second bill focuses on improving the IRS’s cybersecurity and information technology.

The House will also vote on a bipartisan measure aimed at protecting children from identity theft. The Hill’s Naomi Jagoda tells us more about the efforts. 

GOOD TO KNOW

• Republicans on the House’s tax-writing committee are clinging to the new tax-cut law in their reelection races, as the odds of a blue wave in November appear to be increasing.
• President Trump is forming a task force chaired by Treasury Secretary Steven Mnuchin to look at the viability and operations of the U.S. Postal Service (USPS) on the heels of his tweets accusing Amazon of hurting the organization.
• The New York Times explores Larry Kudlow’s first two weeks as Trump’s “happy warrior”

• The Urban Institute studies how much foreign trade impacts manufacturing job losses in the U.S. (Spoiler: Not much, according to its analysis.)

• Cam Fine, president of the Independent Community Bankers of America, ramps up calls for the House to pass the Senate’s bipartisan bill to rollback Dodd-Frank.

• General Motors is cutting several hundred jobs at its plant in Lordstown, Ohio as the automaker adjusts to dramatically slower demand for cars.

 

ODDS AND ENDS

• Bertucci’s, an Italian-restaurant chain known for its brick-oven pizza, is making preparations for a bankruptcy filing, a heartbreaking development for anyone with Boston roots and fond memories of playing with pizza dough before dinner.

 

YOUR CHEAT SHEET FOR WHAT HAPPENED THIS WEEK:

• President Trump praised his Chinese counterpart Xi Jinping for minor concessions on tariffs, but Republicans are anxious about Trump’s trade agenda and what it means for their states, the election and the national economy.

• Trump once called the Trans-Pacific Partnership a “disaster” backed by “special interests who want to rape our country.” Now, the president is considering re-entering the trade pact to open up markets for U.S. farmers set to take heavy losses amid a tariff battle with China.

• Acting CFPB director Mick Mulvaney had a busy week, railing against leaks at the bureau, appearing before the House and Senate, and squaring off with Sen. Elizabeth Warren (D-Mass.).

• The 2018 federal budget deficit will rise to $804 billion and is projected to nearly hit $1 trillion in 2019, largely because of the GOP tax cuts and the bipartisan $1.3 trillion spending package approved last month, according to updated projections released Monday by the Congressional Budget Office (CBO). Republican lawmakers brushed aside the report, arguing it didn’t accurately count how much revenue the tax law would create.