Happy New Year! Last week was relatively slow, with folks still coming back from the holidays. Dominating the news was the release of and revelations contained in Michael Wolff's book "Fire and Fury: Inside the Trump White House." The book contains tidbits from current and former White House staff, with particularly critical statements from former Chief Strategist Steve Bannon. Unsurprisingly, the book was sold out in the DC area over the weekend.

Attorney General Jeff Sessions reversed an Obama-era policy related to policing the marijuana industry, giving federal prosecutors more power to enforce marijuana laws. This caused a drop in the industry's stocks and has made it more difficult for marijuana businesses to obtain bank accounts, which in turn means that they cannot accept credit or debit cards from customers. Some Members of Congress have called for a fix to the system, with Rep. Ed Perlmutter (D-CO) saying that "fixing the banking system will ensure a strong regulated environment for marijuana and will continue to curtail the black market." It is unlikely that Congress will pursue legislation to make it easier for the marijuana businesses to attain banking access.

On the Congressional retirements front, Representative Gregg Harper (R-MS) and Senator Orrin Hatch (R-UT) announced that they will be retiring at the end of their terms. Hatch's departure could mean an opening for the position of Senate Banking Committee Chairman. This would happen if Senator Chuck Grassley chooses to keep his position as Chair of the Judiciary Committee rather than leading Senate Finance, and Chairman Mike Crapo (R-ID) leaves the Banking Committee to lead Senate Finance. If Crapo does make the move, Senator Pat Toomey (R-PA) would be next in line to hold the position as head of the Banking Committee.

The President's Twitter account stayed active last week, with the President tweeting to North Korean Leader Kim Jong Un that he has a much "bigger and powerful" nuclear button in response to a statement made by Kim.

THIS WEEK ON THE HILL

Tuesday, January 9

Senate Banking Committee, Hearing entitled "Combating Money Laundering and Other Forms of Illicit Finance: Opportunities to Reform and Strengthen BSA Enforcement," 10:00AM in 538 Dirksen SOB

House Financial Services Monetary Policy and Trade Subcommittee, Hearing entitled “Evaluating CFIUS: Challenges Posed by a Changing Global Economy,” 10:00 AM in 2128 Rayburn HOB

House Financial Services Financial Institutions and Consumer Credit Subcommittee, Hearing entitled “Legislative Proposals for a More Efficient Federal Financial Regulatory Regime: Part III,” 2:00 PM in 2128 Rayburn HOB

Wednesday, January 10

House Financial Services Monetary Policy and Trade Subcommittee, Hearing entitled “A Further Examination of Federal Reserve Reform Proposals,” 2:00 PM in 2128 Rayburn HOB

THE REGULATORS

Commodity Futures Trading Commission (CFTC) to Address Concerns Over Virtual Currencies: Two of the CFTC's advisory committees, including both regulators and industry participants, will meet in late January to discuss issues relating to the clearing of bitcoin futures, the risk of fraud and manipulation related to virtual currencies, and policing the industry. According to Chairman J. Christopher Giancarlo, "ignoring virtual-currency trading will not make it go away. Nor is it a responsible regulatory strategy."

State Regulators Warn about Initial Coin Offerings: On January 4, the North American Securities Administrators Association (NASAA) issued a statement warning about risks related to ICOs, with President Joseph Borg stating "Investors should go beyond the headlines and hype to understand the risks associated with investments in cryptocurrencies." Securities and Exchange Commission Chairman Jay Clayton and Commissioners Kara M. Stein and Michael S. Piwowar issued a statement commending NASAA's position.

Trump Administration Delays Implementation of Fair Housing Rule: Last week, the Trump Administration announced that it would delay the implementation of the Affirmatively Furthering Fair Housing (AFFH) rule, which would require communities to analyze their housing segregation and submit plans to reverse it in order to receive federal funds. House Financial Services Ranking Member Maxine Waters (D-CA) slammed the move, saying that it is a "flagrant attack on efforts to ensure fair housing opportunities for all people."

Federal Reserve Board Requests Comment on Proposed Guidance that would Clarify Board's Supervisory Expectations Related to Risk Management for Large Financial Institutions: The Federal Reserve Board on January 4 requested comment on proposed guidance that would clarify the Board's supervisory expectations related to risk management for large financial institutions. The guidance is part of a broader initiative to develop a new rating system for large financial institutions that will align with the post-crisis supervisory program.

Treasury Department Sanctions Four Venezuelan Government Officials Associated with Corruption and Oppression: On January 5, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated four current or former Venezuelan government officials associated with corruption and repression in Venezuela. “President Maduro and his inner circle continue to put their own interests above those of the Venezuelan people,” said Treasury Secretary Steven T. Mnuchin. “This action underscores the United States’ resolve to hold Maduro and others engaged in corruption in Venezuela accountable. We call on concerned parties and international partners around the world to join us as we stand with the Venezuelan people to further isolate this oppressive regime.”

Treasury Sanctions Iranian Entities: On January 4, the OFAC also sanctioned five Iran-based entities subordinate to a key element of Iran's ballistic missile program. Shahid Kharrazi Industries, Shahid Sanikhani Industries, Shahid Moghaddam Industries, Shahid Eslami Research Center, and Shahid Shustari Industries are being designated pursuant to Executive Order (E.O.) 13382 for being owned or controlled by Iran's Shahid Bakeri Industrial Group (SBIG).

COMINGS AND GOING AT THE AGENCIES

Top Financial Services Staffer Moving to Consumer Financial Protection Bureau: Kirsten Mork, staff director of the House Financial Services Committee, is leaving the Hill to join the CFPB as Chief of Staff. Prior to the Committee, Mork worked for Rep. Peter Roskam (R-IL).