Financial Services Report

Looking Ahead

Near Term

• House is in recess
• Senate is in session and is scheduled to take up the Syrian refugee bill before moving onto an energy bill that could be on the floor for a couple of weeks.

Further Out
 

• January 27^th CFPB holds field hearing on “access to access to checking accounts” in Louisville, KY where it is anticipated that they will announce news related to their upcoming payday lending rule.
• Both the House Ways and Means and Education and Workforce Committee are expected to mark-up legislation that would codify a best interest standard for financial advisers in lieu of the Department of Labor’s pending Fiduciary Rule around the time that the rule is expected to be at OMB. 
• Federal Aviation Administration Funding, perhaps one of the only “must pass” bills this year other than the appropriations  is set to expire on March 31^st. 

The Past Week

Legislative Branch

House
Financial Services Committee Democrats Call for Investigation in Clayton Homes
On Tuesday, Financial Services Committee Ranking Member Maxine Waters, along with fellow committee members Keith Ellison, Emmanuel Cleaver and Michael Capuano sent a letter to CFPB Director Cordray and Attorney General Loretta Lynch calling on them to launch an investigation into recent allegations surrounding “potentially discriminatory lending and collection practices” at Clayton Homes, a Berkshire Hathaway company. 
 
Housing and Insurance Subcommittee Holds Two Hearings on Flood Insurance
On January 12, the House Financial Services Committee's Subcommittee on Housing and Insurance held a hearing entitled “Opportunities and Challenges Facing the National Flood Insurance Program.” The hearing focused on the capacity of the private market, challenges related to the solvency of the National Flood Insurance Program (NFIP), including possible reforms to the NFIP.  In addition, reinsurance and re-mapping were discussed during the hearing.
 
Then on the 13^th, the Subcommittee head another hearing, this one titled, “How to Create a More Robust and Private Flood Insurance Marketplace.”  In his opening statement, Chairman Blaine Luetkemeyer (R-MO) noted that H.R. 2901, the Flood Insurance Market Parity and Modernization Act, a bipartisan bill authored by Dennis Ross and Patrick Murphy could be one of the steps necessary to reforming the NFIP.
 
Small Business Committee holds Multiple Hearings on Small Business Administration
Last week, the House Small Business Committee capped off a week of hearings examining multiple aspects of the Small Business Administration (SBA), including their office of innovation and capital access.  Not surprising, the issue of small dollar lending came up during the hearing with multiple members raising the issue and the SBA noting that it is a “priority” and emphasized that there is likely to be “growth again this year.”  Other highlights included an indication that the department would maintain its no-fee policy on small dollar loans below $150,000 and smaller fees for veterans’ loans on principals less than $350,000.   In addition, the SBA noted that it intends to modernize its application process through the “SBA One” initiative. 
 
Senate
Audit the Fed Bill Fails to Advance
On Tuesday, by a vote of 53-44, the Senate failed to advance S. 2232, a bill to allow the Fed’s monetary policy deliberations (i.e., interest rate settings) as well as its other actions such as lending decisions, to be audited by the Government Accountability Office (GAO).  Senator Sanders, a Presidential candidate was one of two Democrats to vote for the measure, while Senator Corker (R-TN) was the lone Republican to vote against it.  The legislation was opposed by the Fed, and drew a strong rebuke from former Chairman Ben Bernanke.
 
Senate Finance Writes Lew on EU’s State-Aid Investigations
On Friday, Chairman Hatch, Ranking Member Wyden along with Senators Schumer and Portman sent a letter to Treasury Secretary Lew to applaud him for Treasury’s efforts to date , as well as to encourage the Treasury Secretary to “intensify its efforts” in pushing back against EU Commission State-aid investigations that could result in retroactive taxation on US based companies. 
 
Select Highlights from the Administration
Treasury
Lew Urges Congressional Action on Puerto Rico
On Friday, in advance of a trip this week, Treasury Secretary Jack Lew sent a letter to House Speaker Paul Ryan to pass legislation that would allow Puerto Rico to its debts and give it independent fiscal oversight.  The letter also requests that Congress pass this legislation by the end of March.
 
Next Week’s Schedule
 
The House is in Recess
 
On Tuesday, January 19^th at 10:00am in 366 Dirksen, the Energy and Natural Resources Committee will hold a hearing to examine the near-term outlook for energy and commodity markets.
 
On Thursday, January 21^st at 10:00am in 226 Dirksen, the Judiciary Committee is scheduled to meet in Executive Session, where among other things it is expected to mark up the Judicial Redress Act.