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On Capitol Hill
While the ongoing impeachment inquiry of President Donald Trump remains the focus of many in Washington, the House Financial Services Committee hosted hearings on two major financial regulatory issues.
On Oct. 22, the committee heard from three top housing finance regulators about their recently issued plans to administratively revamp the U.S. housing finance system.
The hearing highlighted the deep divide between the parties on the issue, with Democrats criticizing the plans for lacking specifics to meet affordable housing and multifamily housing finance goals and Republicans arguing the administration's plans to reform are a step in the right direction.
Meanwhile, the three regulators — Treasury Secretary Steven Mnuchin, Department of Housing and Urban Development Secretary Ben Carson and Federal Housing Finance Agency Director Mark Calabria — told lawmakers that their plans would reduce the government's role in the housing finance system and make it more efficient. They also expressed a preference for Congress to pursue a comprehensive reform plan for the government-sponsored enterprises.
At another marquee hearing the next day, Facebook Inc. CEO Mark Zuckerberg sought to assure lawmakers that the company is committed to security and privacy as it pursues the creation of its digital currency, Libra, which he billed as a way to ensure U.S. leadership in the digital payments space.
But several lawmakers expressed skepticism about the project, with Rep. Nydia Velázquez, D-N.Y., questioning why Congress should believe that Facebook is committed to protecting consumers' privacy.
Rep. Steve Stivers, R-Ohio, meanwhile, told Zuckerberg that Facebook "may have bitten off more than you can chew by trying to create a private currency."
In other committee happenings, the Consumer Protection and Financial Institutions Subcommittee held a hearing examining the decline in minority-owned banks in the U.S.
Rep. Gregory Meeks, D-N.Y. and chairman of the subcommittee, focused the hearing on a bill that would require banking regulators to fully service and acknowledge minority depository institutions, or MDIs.
The bill, currently in draft form, would require big banks that hold Department of Treasury money to mentor MDIs. The draft bill would also require each of the federal banking regulators to create advisory committees solely consisting of MDIs.
In addition, the bill would streamline de novo community development financial institution, or CDFI, applications at the Federal Deposit Insurance Corp. to get them running quicker. CDFIs are banks and other organizations that provide services to community-focused businesses that typically cannot secure loans or services from traditional banks.
Meanwhile, the full House passed a package of bills modernizing anti-money laundering rules for banks.
The package of measures, introduced by Reps. Carolyn Maloney, D-N.Y., and Emanuel Cleaver, D-Mo., mandates the creation of a beneficial ownership database for financial institutions that do not publicly report ownership structures to the SEC. The database would be housed and administered by the Department of the Treasury's Financial Crimes Enforcement Network, with the goal of sharing information with law enforcement officials to help financial criminal investigations.
The slate of bills passed 249-173.
The bill will have to be reconciled with a measure in the Senate that shares similar provisions and principles. Sens. Mark Warner, D-Va., and Tom Cotton, R-Ark., formally introduced their bill in September.