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FDIC NOMINEES — If you had this on your bingo card this week, we hope you bought some lotto tickets: President Joe Biden announced plans to appoint two Republicans to the board of the Federal Deposit Insurance Corp., and the White House announces that it will soon announce a candidate. to be president, reported our Victoria Guida.
Travis Hillappointed vice-president, worked as a senior adviser to former FDIC Chairwoman Jelena McWilliams and was previously senior Republican staff counsel for the Senate Banking Committee. Jonathan McKernan, appointed as a director, is senior counsel at the Federal Housing Finance Agency, currently in detail with the GOP staff of the Senate Banking Committee, and has worked at the Treasury Department and for Sen. Bob Corker (R-Tenn.).
Timing is everything: These GOP candidates will likely go nowhere until the White House nominates a Democratic nominee for president.
That’s because confirming them would effectively hand over control of the board to Republicans. Stick with us: If Hill is confirmed as vice president, then under FDIC bylaws he would automatically become interim president, replacing current Democratic interim president Marty Gruenberg, whose term as director has already expired. Likewise, if McKernan is confirmed as a board member, he would replace Gruenberg — at least, that’s how we understand it based on conversations with several people who follow the agency closely.
A White House official told Victoria the plan was to bring the three candidates together.
The big question: Will the White House appoint Gruenberg as president? We learn that a decision has not yet been made. Which begs the question everyone was asking: why did they announce these Republican candidates without all their ducks in a row?
Also, why now? As of 3 p.m. yesterday, many people — including your MM host — were under the impression that Biden had no plans to appoint anyone to the FDIC anytime soon.
The announcement follows a fierce partisan fight at the agency last year that ultimately prompted the then-Republican president to step down. That left the three Democratic board members — including CFPB director Rohit Chopra and acting comptroller Michael Hsu — to lead the agency’s agenda unhindered. If the nominees are confirmed, it would bring GOP votes back to the board and mark the first time the FDIC has had a full slate since 2015, per Victoria.
IT’S WEDNESDAY– We have bank CEOs in the morning, Powell & Co. in the afternoon, and a stiff drink (or maybe a relaxing tea!) in Pencil for the evening. Do you have advice, article ideas or words of encouragement? Please send them to [email protected] and [email protected].
Existing home sales data released at 10 a.m.… House Financial Services audience with CEOs of major retail banks at 10 a.m.… Consumer Financial Protection Bureau Director Rohit Chopra addresses the Club Exchequer at 12 p.m.… Fed Policy Statement released at 2 p.m.… Fed Chairman Jerome Powell press conference at 2:30 p.m.
IT’S FOOD DAY – From our Victoria Guida: “The Federal Reserve is poised to roll out another oversized interest rate hike to combat the biggest price spike in 40 years, a move that has prompted remarkably little policy pushback despite the rise in market anxiety a few weeks before an election.
“That could change, with more and more voices from Washington on Wall Street warning that the central bank could end up doing serious damage to the economy.”
MEA CULPA – We shared with you data in yesterday’s MM from the Bank Policy Institute, which showed that Zelle – a consortium-owned instant payment app – has a much lower share of disputed transactions than its non-bank competitors. Unfortunately, we got the numbers mixed up — the share of disputed transactions is three times higher for PayPal and six times higher for Cash App than for Zelle, which on average only sees 0.06% of disputed transactions, according to BPI. Thanks to our eagle-eyed readers for figuring this out.
CHIDING CHINA – Treasury adviser Brent Neiman took China to task over its lending practices in a speech Tuesday at the Peterson Institute for International Economicscalling on one of the world’s largest sovereign creditors to do more to help low-income countries restructure their debt.
Mark Sobel, a former Treasury official and US chairman of the Official Monetary and Financial Institutions Forum, told MM it was the most comprehensive speech he had seen a Biden administration official give on the issue. . But the tension between the United States and China and the lack of engagement between American and Chinese financial authorities means that the Treasury does not have much leverage to push China to change (as Sobel wrote in the FT last month).
“The IMF is really going to be the neutral actor,” he said. “I don’t think the World Bank, with David Malpass there, can be considered neutral. It really puts a particular burden on the IMF to get things done.
THE STABLECOIN NOTE TAKES SHAPE — Our Sam Sutton and Declan Harty: “Rep. Patrick McHenry (RN.C.)…who has been working with committee chair Maxine Waters (D-Calif.) on the legislation since early July, told an audience at a POLITICO Live event on cryptocurrency regulation. Currency that he was “optimistic and hopeful” that the bill will be introduced this year despite the countdown to the midterm elections.
Also: “Democrats on the Financial Services Committee met Tuesday night to consider a bill that subjects non-bank payment stablecoin issuers to Federal Reserve oversight while maintaining a role for state regulators. “
GUN STORE CODES – Sam again: “Two dozen Republican state attorneys general sent a letter on Tuesday to American Express, Mastercard and Visa asking the companies to reconsider their intention to adopt a merchant category code dedicated to gun stores — something long sought after by gun control activists and policy-making Democrats.”
MS REGULATIONS – And more from Declan: “Morgan Stanley Smith Barney has agreed to pay $35 million to settle charges brought by the SEC for failing to protect critical information of approximately 15 million customers.”
STUDENT LOAN CHALLENGE — WSJ’s Gabriel Rubin and Jacob Gershman: “The Biden Administration and Republican Opponents of Massive Student Debt Cancellation seem to be heading for a legal confrontation with hundreds of billions of dollars at stake just weeks before November’s midterm elections.
MAJOR BANKS BACK HOME LOANS — John Gittelsohn, Hannah Levitt and Natalie Wong of Bloomberg: “Banks like Wells Fargo & Co., Bank of America Corp. and JPMorgan Chase & Co. have withdrawal of financing for offices and other business real estate after a record burst of lending in the first half of this year. »
FORD FALLS – Reuters’ Kannaki Deka and Noel Randewich: “Ford Motor Co shares fell more than 12% on Tuesday in their biggest one-day drop in more than a decade after the automaker said inflation-related costs would be $1 billion more than expected in the current quarter and that parts shortages had delayed deliveries.
A DETRONED SPAC KING — Bloomberg’s Bailey Lipschultz: “‘SPAC King’ Chamath Palihapitiya ends two blank check companies after a hunt for targets to go public, it was found to be empty as the industry crumbles.
WHO RECEIVES THE CHILDREN? — WSJ’s Jean Eaglesham: “Ernst & Young’s tax experts make a lot of money and are highly valued by the firm’s clients. Many members of the group of 70,000 do not know where they will be working next year or if they will be competing against each other. … More than any other major firm group, the tax team will be dismembered in the split. Cut out this unit’will probably be the trickiest part‘ of the EY breakup, according to Mark O’Connor, managing director of Monadnock Research, which analyzes the consulting industry.
STRONG ARM — Julia Carpenter of the WSJ: “Using adjustable rate loans increased in recent months. In August 2022, more than 9% of all mortgage applications were for ARMs, according to the Mortgage Bankers Association, up from 3.3% in the same period last year.
HEAD SCRAPER — “The cryptocurrency regulation saga took another turn thanks to a comment buried in a Securities and Exchange Commission lawsuit this hints at a US jurisdiction case over the Ethereum blockchain… The SEC was already surrounding Ether, the blockchain’s native token, after the digital ledger was upgraded last week to a much more energy-efficient system. SEC Chairman Gary Gensler has signaled that a feature of this revised approach, whereby Ether holders can earn financial rewards by allowing the network to use some of their assets, could fall under rules on securities.
Jason Cole joined FS Investments, a Philadelphia-based alternative asset manager, as executive director of public policy and corporate affairs. Cole previously worked at CBC Companies, MetLife and UBS, and is a House alumnus.
Goldman Sachs earns billions of dollars a year advising tycoons and giant corporations. Behind the scenes, small business owners are get his gold plated services for free. —Charley Grant of the WSJ
The robots are here. And they are make you fries. —Laura Reiley and Lee Powell of WaPo
Gap inc. is loss of 500 jobs in companies as it faces rising costs and lower sales figures. — Bloomberg’s Olivia Rockeman and Jeannette Neumann