Overnight Finance: Trump spurs tax reform talk | Feds release banks’ revised ‘living wills’

Trump stirs tax reform debate: News about Donald Trump’s tax bills is sparking new hope that a political tax debate might lead to a push for reform on Capitol Hill.

Both parties agree the code, which has not been significantly changed in 30 years, is in need of an overhaul. Yet no legislation has gained traction.

{mosads}The question now is whether attention from both candidates on the flaws of the current code can change that calculus

Some argue there is a chance — particularly if public anger grows that the code is benefitting the wealthy at the expense of the poor. The Hill’s Peter Schroeder tells us how: http://bit.ly/2duYu5R.

Sanders targets Trump tax breaks: Democrats are keeping the controversy over Trump’s leaked 1995 tax returns in the spotlight. Sen. Bernie Sanders (I-Vt.) said Tuesday he will introduce legislation in the next Congress to crack down on the tax breaks Donald Trump used to possibly avoid paying federal taxes for nearly two decades.

Sanders, the former Democratic presidential candidate, is targeting four provisions in the tax code, mainly focused on how real estate losses are deducted, that he says the Republican nominee employed to skirt paying taxes.

“Special tax breaks and loopholes in a corrupt tax code enable billionaires and powerful corporations to avoid paying their fair share of taxes while sticking the burden on the middle class,” Sanders said.

“It’s time to create a tax system which is fair and which asks the wealthy and powerful to start paying their fair share of taxes,” he said.

Our Vicki Needham has more on Sanders’s plans: http://bit.ly/2dv67ZW

Who’s the leaker?: It’s still unclear who leaked Donald Trump’s taxes, but a close confidante of the billionaire says a current or former staffer may have leaked the returns to The New York Times. “I would just be speculating, [but] somebody who worked at the Trump Organization perhaps, or perhaps a former employee,” Roger Stone said on Boston Herald Radio when asked Tuesday who could have obtained Trump’s tax documents.

But he doesn’t think the Times’s scrutiny of Trump’s tax history before entering politics will hurt the real estate tycoon.

“Do we really want a president who pays more in taxes than he legally owes?” he asked. “He had a legitimate loss. The tax code, written by Republicans and Democrats working together, allows him to take these losses.

“I don’t want a person to be president who pays more in taxes than they owe. Such a person would be too stupid to be president of the United States,” Stone added. The Hill’s Mark Hensch has more here: http://bit.ly/2cQKrKk

Fed to study future role of electronic payment systems: The Federal Reserve is studying proposals for electronic payments systems meant to speed up and secure American commerce, and it will release two reports on its findings in 2017, the central bank announced Tuesday.

Two Fed national task forces are looking over 19 proposals from across the finance and technology industries that focus on how money can be transferred electronically between businesses and people. I’ll tell you what to expect and when to expect it: http://bit.ly/2cRcDYB.

Happy Tuesday and welcome to Overnight Finance, where we’re wondering where Bill Clinton’s healthcare talking points went. I’m Sylvan Lane, and here’s your nightly guide to everything affecting your bills, bank account and bottom line.

Tonight’s highlights include the potential election fallout of Trump’s business in Cuba, a record crackdown on payday lending abuse and a cheery forecast for holiday sales.

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.

Regulators publish new ‘living wills’ for five big banks: The Federal Reserve on Tuesday unveiled new plans from five of the largest U.S. banks detailing how they would wind down without taxpayer bailouts in times of financial distress.

JPMorgan Chase, Bank of America, Wells Fargo, State Street, and Bank of New York Mellon were required by regulators to submit revised “living wills” after their plans were rejected in April.

The Federal Reserve and Federal Deposit Insurance Corporation made public portions of the resolution plans but have not yet made any decisions on whether to accept the new living wills. “Neither the confidential nor the public portions of the resolution plans have yet been reviewed by the agencies, which will now begin initiating their process for review,” they said.

The regulators also published documents from Goldman Sachs, Morgan Stanley, and Citigroup, whose plans were accepted in April but needed updates showing how to improve weaknesses. The Hill Extra’s Anjelica Tan has more here: http://bit.ly/2cQOBlg

Trade leaders want momentum toward US-EU pact: Trade leaders in Congress late Monday urged the Obama administration to position a sweeping agreement with the European Union for completion next year.

House Ways and Means Committee Chairman Kevin Brady (R-Texas) and Senate Finance Committee Chairman Orrin Hatch (R-Utah) want to see a definitive push toward conclusion of the Transatlantic Trade and Investment Partnership (TTIP) but say they are worried the EU won’t budge on key items that remain a high priority for lawmakers.

“We understand that the successful conclusion of TTIP will require political leadership on both sides of the Atlantic,” Brady and Hatch wrote in the letter to U.S. Trade Representative Michael Froman.

With the 15th round of TTIP talks this week in New York, the lawmakers want to see more progress in several critical areas and they urged U.S. trade officials to emphasize to the EU that any pact must earn the support of Congress. The Hill’s Vicki Needham has what you need to know: http://bit.ly/2dtvNGK.

Will Cuban business dealings cost Trump Florida?: Allegations that Donald Trump may have defied a federal ban on business ventures in Cuba has become a potential flashpoint in the presidential fight for Florida, a perennial battleground state that’s viewed as crucial if the GOP nominee is to win the White House.

Hillary Clinton, the Democratic hopeful, has launched a series of attack ads highlighting the charges that Trump’s casino and hotel company violated a long-standing U.S. embargo against the communist nation — an unveiled stab at eroding Trump’s support from the Cuban-American voters whose staunch opposition to the Castro regime has put them squarely in the Republicans’ camp for decades. The Hill’s Mike Lillis tells us what’s at stake: http://bit.ly/2cRcmVH.

Report claims Trump used foundation money to lay campaign groundwork: Donald Trump donated nearly $300,000 of his foundation’s money to conservative organizations over a three-year period in the lead-up to his presidential run, according to a RealClearPolitics report. The analysis of Trump Foundation filings showed that from 2011 to 2014, the real estate mogul gave $286,000 to “influential conservative or policy groups.”

The contributions may run afoul of IRS laws prohibiting charity executives from using a group’s funds to their own benefit.

The Washington Post has reported on a number of similar cases of possible self-dealing involving the Trump Foundation, which on Friday was ordered to stop receiving public donations by the New York attorney general. http://bit.ly/2droqjz

Bank trading revenue up 25 percent in second quarter: Commercial banks boosted trading revenue by 25 percent in the second quarter, as revenue from foreign exchange trading more than tripled from a year earlier, a federal report said.

Banks made $6.9 billion in trading revenue in the quarter ending June 30, up from $5.5 billion a year earlier, according to quarterly data from the Office of the Comptroller of the Currency.

The report, published Tuesday, showed that banks benefited from foreign exchange derivatives, as revenue from those trades jumped to $3.7 billion from $855 million in the same period.

Commercial bank activity in derivatives, or financial contracts whose values are tied to the performance of factors such as currencies or interest rates, is dominated by a handful of firms Here’s more from The Hill Extra’s Anjelica Tan: http://bit.ly/2dCxnb8.

Former pro racer fined $1.2B for payday loan abuses: A former racecar driver and several corporate partners were slapped with a record $1.2 billion fine for deceiving payday loan customers and drawing undisclosed fees from their accounts.

The Federal Trade Commission (FTC) sued Scott Tucker and his affiliated network of payday lenders for violating several federal lending and electronic payments laws by levying undisclosed fees through repeated bank account withdrawals. 

U.S. District Court of Nevada Judge Gloria Navarro on Friday ruled that Tucker and his associates “engaged in sustained and continuous conduct that perpetuated the deceptive lending since at least 2008.” I’ll tell you how it went down: http://bit.ly/2d1h1rj.

SEC again postpones swap data compliance date: The Securities and Exchange Commission (SEC) is postponing the compliance date on rules that would allow the agency to access swap data as part of its regular examinations.

The Oct. 4 decision applies to a compliance exemption provided to swap data repositories (SDRs) as it reviews comments surrounding the applications of two potential SDRs, DTCC Data Repository and ICE Trade Vault, LLC.

Here’s more from The Hill Extra’s Timothy Weatherhead: http://bit.ly/2dPlRdM.

Retailers cheery on holiday sales: Retailers are forecasting a cheery holiday sales season driven by a healthy job market and rising wages.

The National Retail Federation (NRF) said Tuesday that sales in November and December are expected to increase a solid 3.6 percent to $655.8 billion, at a faster pace than last year and significantly higher than the 10-year average of 2.5 percent.

“All of the fundamentals are in a good place, giving strength to consumers and leading us to believe that this will be a very positive holiday season,” NRF President and CEO Matthew Shay said.
“This year hasn’t been perfect, starting with a long summer and unseasonably warm fall, but our forecast reflects the very realistic steady momentum of the economy and industry expectations,” Shay said.

Holiday sales in 2015 increased 3 percent over the previous year: http://bit.ly/2duZwic.

Venture capitalists for Hillary: A New York-based venture capital firm that has invested in companies like Twitter, Tumblr and Zynga has endorsed Hillary Clinton.

Union Square Ventures (USV) on Tuesday made the first endorsement of the fund’s 13-year history, backing Clinton in a blog post that criticized Donald Trump’s immigration plan.

“Shutting out the world is not an option. We don’t think it’s desirable, or even possible, to return to an earlier era when America was less diverse, or the economy was less global,” the firm wrote. http://bit.ly/2dpOZc7

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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.