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Washington Wrap — House tackles wave of financial reform bills

The Washington Wrap is a weekly look at regulation, news and chatter from the Capitol. Send tips and ideas to brian.cheung@spglobal.com.

On Capitol Hill

The House Financial Services Committee passed 22 bills on Oct. 12, proposing a number of tweaks and changes to the financial regulatory landscape.

The committee considered a number of bills that touch high-priority issues for the industry, such as the $50 billion threshold for systemically important financial institutions. The bill from Rep. Blaine Luetkemeyer, R-Mo., would replace the threshold with a risk-based assessment and has some bipartisan support.

On commercial real estate, the committee worked through a bill that would alter the capital treatment of some acquisition, development and construction loans. The bill would create a legal definition of what is considered a high volatility commercial real estate loan.

Other bills hope to address Truth in Lending Act definitions, Home Mortgage Disclosure Act reporting requirements and an increase in the Consumer Financial Protection Bureau bank supervision threshold. One bill concerning the "Madden Fix," which would clarify the rights of a digital lender when partnering with a bank, was originally scheduled for consideration but was punted to a later date for markup. A spokesperson for Rep. Patrick McHenry, R-N.C., who introduced the bill, said the bill will be considered at the next full committee markup, blaming the delays on scheduling issues.

"We must continue providing community financial institutions with desperately needed regulatory relief as we know we are still regrettably losing one a day in America," Chair Jeb Hensarling, R-Texas, said.

Top committee Democrat Maxine Waters, D-Calif., said Democrats are committed to finding some bipartisan ground through negotiations.

"Despite being pressed for time, we have crafted several creative solutions to provide targeted relief, while at the same time closing loopholes and otherwise overbroad provisions in the underlying bills," Waters said.

Compass Point Analyst Isaac Boltansky said the Madden Fix and the CRE revisions are "likely" to be enacted during this Congress, but said a replacement of the $50 billion SIFI threshold is a "toss-up at this stage."

At the Fed

The rumor mill continues to churn over who might become the next Fed chair. The Wall Street Journal reported Oct. 12 that Stanford economist John Taylor, most known for his suggestion that monetary policy follow a rules-based system, met with President Donald Trump to interview for the job. It has been previously reported that former Fed Governor Kevin Warsh and current Fed Governor Jerome Powell have also visited Trump for interviews.

In a press briefing Oct. 12, White House Chief of Staff John Kelly reportedly said a decision on the next Fed chair is "some time away," adding that those interviewed so far have been "first-round choices."


The Federal Reserve released minutes from its September monetary policy meeting, where the Federal Open Market Committee decided to keep the benchmark interest rate at a target range of 1.00% to 1.25%. The minutes revealed that the Fed could be teeing up a December rate hike as some members see inflation rising to the Fed's 2% target in the medium term.

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