A meeting between Democratic leaders and the President on infrastructure was cut short on Wednesday, after the President took issue with House Speaker Nancy Pelosi’s comment that he was “engaged in a cover-up” over ongoing investigations into the administration. In a press conference, the President indicated he would not negotiate on legislative issues “under these circumstances” and urged House Democrats to “get these phony investigations over with.” In response, Speaker Pelosi said she would “pray for the President.”

On Thursday, the Senate voted 85-8 to pass a US$19.1B disaster aid package after a period of intense negotiations and months of setbacks. In the end, legislators were able to agree to a compromise that the President deemed acceptable, though it did not include his requested funding for the crisis on the southern border. Despite this, in a surprise move freshman Rep. Chip Roy (R-TX) objected to the use of unanimous consent, blocking the bill’s passage by the House prior to recess.

The President’s efforts to stonewall House subpoenas hit a stumbling block last week, after two federal judges separately ruled that subpoenas for documents to banks and an accounting firm associated with the President could proceed. Despite the administration’s arguments in the suits, one judge found the subpoenas were “likely lawful,” and did in fact serve “a legitimate legislative purpose.” Lawyers for the President said they planned to appeal.

Other highlights of last week include:

  • On Friday, British Prime Minister Theresa May announced that she would resign, amid continued uncertainty over Brexit.
  • The House Judiciary Committee issued subpoenas to Hope Hicks, the President’s former adviser and close confidant, and former White House deputy counsel Annie Donaldson.
  • Rep. Justin Amash (R-MI) became the first from his party to come out in favor of impeaching the President for obstruction of justice in a series of tweets, saying “People who say there were no underlying crimes and therefore the president could not have intended to illegally obstruct the investigation—and therefore cannot be impeached—are resting their argument on several falsehoods.”



Hearing onHousing in America: Oversight of the U.S. Department of Housing and Urban Development”: On Tuesday, the full Committee met to examine the U.S. Department of Housing and Urban Development’s current state of affairs and address major changes to agency policies and programs since 2017. The Committee also considered three pieces of draft legislation: (1) H.R. ____, the “Safe Housing for Families Act of 2019”; (2) H.R. 2763, prohibit HUD from implementing, administering, enforcing, or in any manner making effective the proposed rule entitled “Amendments to Further Implement Provisions of the Housing and Community Development Act of 1980”; and (3) H.R. ____, the “Fair Chance at Housing Act.” Secretary Carson faced criticism from Chairwoman Maxine Waters, who criticized recent proposals as “outrageous,” “cruel,” and “actively causing harm.”

  • The Honorable Dr. Benjamin S. Carson, Secretary, U.S. Department of Housing and Urban Development

Hearing onThe Annual Testimony of the Secretary of the Treasury on the State of the International Financial System – Part II”: On Wednesday, the full Committee met to receive testimony from Treasury Secretary Steven Mnuchin, a continuation of the hearing that began on Tuesday, April 9, 2019. In his testimony, the Secretary stood by his position that it would have been “unlawful” to turn over the President’s tax returns in response to House Ways and Means Committee Chairman Richard Neal’s subpoenas, and said he did not feel the President was “hiding anything.” He also relayed his estimate that the U.S. will be at risk of default if the debt ceiling is not raised by “late summer,” and urged lawmakers to take action on the issue. He also indicated that the administration had no plans to change the carried interest tax rule as it would “require legislation,” although he noted, “that’s something the President is interested in.” In response to questions from Rep. Ayanna Pressley, the Secretary said that the redesigned US$20 bill that will feature Harriet Tubman instead of former president Andrew Jackson had been delayed to 2026, from the previously announced target of 2020.

  • The Honorable Steven T. Mnuchin, Secretary, U.S. Department of the Treasury


Hearing onCombating Illicit Financing by Anonymous Shell Companies Through the Collection of Beneficial Ownership Information”: On Tuesday, the full Committee met to continue a hearing first convened last November on the topic of beneficial ownership, specifically “the need to deter money laundering and the financing of terrorism through the use of front companies, shell companies, shelf companies, opaque nominees, and other means to conceal and disguise the true beneficial owners of property and other assets.” FinCEN Director Blanco pledged to work with members of Congress to craft legislation to “develop a bipartisan solution to collecting the information” as it was “critical for the security of the nation … that Congress act to eliminate one of the most useful tools for criminals to commit their crimes, hide their proceeds and subvert law enforcement.”

  • Mr. Kenneth A. Blanco, Director, Financial Crimes Enforcement Network (FinCEN), U.S. Department of the Treasury
  • Mr. Steven D’Antuono, Section Chief, Financial Crimes Section, Federal Bureau of Investigation (FBI)
  • Ms. Grovetta Gardineer, Senior Deputy Comptroller for Bank Supervision Policy, Office of the Comptroller of the Currency, U.S. Department of the Treasury


CFPB Legislation: On Wednesday, the House passed H.R. 1500, the “Consumers First Act” by a vote of 231-191. The measure would reverse changes implemented at the CFPB under former acting director Mick Mulvaney. The White House released a statement saying it “strongly opposes” the bill and indicated the President would veto it if it reached his desk.

Retirement Savings: On Thursday, the House voted overwhelmingly to pass H.R. 1994, the “Setting Every Community Up for Retirement Enhancement Act of 2019” with the final tally 417-3. Senate Finance Committee Chairman Chuck Grassley (R-IA) said he planned to take up the legislation quickly, calling it a “top priority” and that the Committee would work “to reconcile the differences and get this important bill to the president.”

Robocall Bill: On Thursday, the Senate voted 97-1 to pass S. 151, the "Telephone Robocall Abuse Criminal Enforcement and Deterrence Act" or the TRACED Act. Sen. Rand Paul (R-KY) was the only vote in opposition. However, House Democrats plan for a broader approach to the issue, and reportedly do not intend to take up the bill directly, instead holding a markup on their own version of the bill and “working out any differences between the bills.”

Flood Insurance: Amid uncertainty over a larger disaster aid package, on Thursday, the Senate passed a standalone two-week extension of the National Flood Insurance Program by unanimous consent.


S. 1564: Sen. Thom Tillis (R-NC) introduced S. 1564, which would require the Securities and Exchange Commission and certain Federal agencies to carry out a study relating to accounting standards.

S. 1578: Sen. Josh Hawley (R-MO) introduced S. 1578, the “Do Not Track Act” which would give every person the power to block online companies from collecting any data beyond what is necessary for the companies’ online services. Sen. Hawley said in a statement that big tech companies “have gotten incredibly rich by employing creepy surveillance tactics on their users, but too often the extent of this data extraction is only known after a tech company irresponsibly handles the data and leaks it all over the internet.”

S. 1639: Sen. Ron Wyden (D-OR) introduced S. 1639, which would amend the Internal Revenue Code of 1986 to revise the treatment of partnership interests received in connection with the performance of services.

H.R. 2852: Rep. Brad Sherman (D-CA) introduced H.R. 2852, which would amend the National Housing Act to authorize State-licensed appraisers to conduct appraisals in connection with mortgages insured by the FHA and to require compliance with the existing appraiser education requirement.

H.R. 2899: Rep. Tom Emmer (R-MN) introduced H.R. 2899, which would amend the Securities Exchange Act of 1934 to allow for the registration of venture exchanges.

H.R. 2904: Rep. Andy Barr (R-KY) introduced H.R. 2904, which would amend the Consumer Financial Protection Act of 2010 to extend certain supervisory authority of the Bureau of Consumer Financial Protection to include assessing compliance with the Military Lending Act.

H.R. 2919: Rep. Bill Huizenga (R-MI) introduced H.R. 2919, which would require the Securities and Exchange Commission to carry out a study to evaluate the issues affecting the provision of, and reliance upon, investment research into small issuers.

H.R. 2930: Rep. Alexandria Ocasio-Cortez (D-NY) introduced H.R. 2930, which would protect consumers from usury.

H. Res. 389: Rep. Ed Perlmutter (D-CO) introduced H. Res. 389, which would (1) provide for consideration of the bill (H.R. 1500) to require the Consumer Financial Protection Bureau to meet its statutory purpose; (2) provide for consideration of the bill (H.R. 1994) to amend the Internal Revenue Code of 1986 to encourage retirement savings; and (3) provide for proceedings during the period from May 24, 2019, through May 31, 2019.


No hearings scheduled during recess period.


OCC Report Highlights Key Risks for Federal Banking System: On Monday, the OCC released its Semiannual Risk Perspective for Spring 2019, which included credit, operational, compliance, and interest rate risks as the key themes. They described key drivers for operational risk to include persistent cybersecurity threats, as well as innovation in financial products and services, and increasing use of third parties to provide and support operations that are not effectively understood, implemented, and controlled. The agency cautioned banks to be cognizant of the risks of outsourcing operations to fintech firms, saying that while “innovation can enhance a bank's ability to compete” it can also “elevate strategic risk when pursued without appropriate corporate governance and risk management.”

Former Fed Official Issues Warning on Stress Test Proposal: On Tuesday, Daniel Tarullo, who previously served as the Fed’s regulatory chief, issued a warning that current proposals could lead to a weakening of stress tests that would render them useless, and urged the bank to tighten other requirements if they are enacted. He advocated for set capital requirements, saying, “in order to provide the same level of protection afforded by the more dynamic stress test, those static capital requirements would need to be a good bit higher than they are today.”

FHFA Head Discusses Future of Fannie and Freddie: In a speech on Monday, new FHFA Director Mark Calabria discussed his vision for Fannie Mae and Freddie Mac, saying, “the status quo is over” as his arrival at the agency is “the opening bell for change.” He noted that he was committed to working for Congress, but added the caveat that he would not wait on Congress. He talked about his plans to discuss options for changing the share agreement with Treasury, in an effort to boost capital by 2020.

Financial Stability Oversight Council Board to Meet May 30: The Federal Reserve announced that the Financial Stability Oversight Council will meet on May 30. The preliminary agenda includes a discussion regarding U.S. nonfinancial corporate credit, a discussion of public comments submitted regarding proposed amendments to the Council’s interpretive guidance on nonbank financial company designations, and a discussion of equity market structure.

SEC to Vote on ‘Best Interest’ Standard June 5: The SEC announced the agenda for its June 5th open meeting, including whether to adopt a new rule (first proposed in April 2018) to establish a standard of conduct for broker-dealers and persons who are associated with broker-dealers when making a recommendation to a retail customer of any securities transaction or investment strategy involving securities.

SEC Announces Staff Roundtable on Short-Term/Long-Term Management of Public Companies, Its Periodic Reporting System, and Regulatory Requirements: On Monday, SEC Chairman Jay Clayton announced the agency will hold a roundtable to explore the causes of short-termism and to facilitate conversations on what market-based initiatives and regulatory changes could foster a longer-term performance perspective in American companies. He cautioned that “an undue focus on short-term results among companies may lead to inefficient allocation of capital, reduce long-term returns for Main Street investors, and encumber economic growth.”

SEC Releases Risk Alert on Safeguarding Customer Records and Information on Third-Party Cloud-Based Data Storage: The SEC’s Office of Compliance Inspections and Examinations released a risk alert regarding security risks associated with the storage of electronic customer records and information by broker-dealers and investment advisers in various network storage solutions, including those leveraging cloud-based storage. The agency noted that although the majority of these network storage solutions offered encryption, password protection, and other security features designed to prevent unauthorized access, examiners observed that firms did not always use the available security features. They cautioned that weak or misconfigured security settings on a network storage device could result in unauthorized access to information stored on the device.

SEC Obtains Emergency Order Halting Alleged Diamond-Related ICO Scheme Targeting Hundreds of Investors: On Tuesday, the SEC announced it had obtained a court order halting an ongoing US $30M Ponzi scheme targeting more than 300 investors in the U.S. and Canada. The complaint, which was unsealed on Monday, charges South Florida-based Argyle Coin, LLC, a purported cryptocurrency business, and its principal Jose Angel Aman with using investor funds to run a Ponzi scheme. “As alleged, Aman operated a complicated web of fraudulent companies in an effort to continually loot retail investors and perpetuate the Ponzi schemes as well as divert money to himself,” said Eric Bustillo, Director of the SEC’s Miami Regional Office. “The SEC's diligent investigative work uncovered the Ponzi schemes and our goal is to bring justice to the harmed investors.”

SEC, NASAA, and FINRA Issue Senior Safe Act Fact Sheet to Help Promote Greater Reporting of Suspected Senior Financial Exploitation: In recognition of the one-year anniversary of the passage of The Senior Safe Act, the SEC, NASAA, and FINRA issued a fact sheet to help raise awareness among broker-dealers, investment advisers, and transfer agents of the Act and how the Act’s immunity provisions work. “Financial professionals can provide a critical frontline role in identifying and reporting senior financial exploitation,” said SEC Chairman Jay Clayton. “The SEC strongly encourages broker-dealers and investment advisers to train their personnel in accordance with the Senior Safe Act. We also encourage all investors, including our most vulnerable, to ensure they are dealing with a registered investment professional.”

Consumer Financial Protection Bureau Launches Financial Education Tool for Active-Duty Servicemembers: On Thursday, the CFPB significantly expanded its Misadventures in Money Management financial education tool to active-duty servicemembers, expanding the program to be available for all servicemembers on active duty, including in the Reserve or the National Guard. “Misadventures in Money Management is a valuable resource for servicemembers and their families that will help them understand their options in the financial marketplace so they can avoid the most common mistakes,” said CFPB Director Kathy Kraninger. “Improving the financial readiness of our military servicemembers is important so they can focus on the mission at hand.”


“Operation Choke Point” Lawsuit Dismissed: Following the dismissal of a long-running lawsuit alleging regulatory pressure to close payday lender bank accounts, the OCC released a statement saying it was “pleased” by plaintiffs’ decision, adding that the resolution of the case confirms what the agency has long told the U.S. District Court and the Congress: namely, that the agency did not participate in “Operation Choke Point” or in any purported conspiracy to force banks to terminate the bank accounts of plaintiffs or of other payday lenders.


Arizona Announces Three New Participants in Fintech Sandbox: Arizona’s Attorney General Mark Brnovich announced that three additional companies would be inducted into Arizona’s fintech sandbox pilot program, which provides regulatory relief for businesses testing new financial products and services.

ECB Releases Report Saying Crypto Assets Are Not Yet a Threat to Stability: The European Central Bank’s Crypto-Assets Task Force published an analysis on Friday which noted that while crypto assets do not yet constitute a threat to market stability, the public should be aware and be prepared for future risk, saying “it calls for vigilance at the level of the EU, to prevent a proliferation of national initiatives from triggering regulatory arbitrage and, ultimately, hampering the resilience of the financial system to crypto-asset market-based shocks.”