| | | | |  | | By Jasper Goodman and Zachary Warmbrodt | | | Editor’s note: Morning Money is a free version of POLITICO Pro Financial Services morning newsletter, which is delivered to our subscribers each morning at 5:15 a.m. The POLITICO Pro platform combines the news you need with tools you can use to take action on the day’s biggest stories. Act on the news with POLITICO Pro.
| | | | | | CONGRESS OVERDRIVE: Since day one, POLITICO has been laser-focused on Capitol Hill, serving up the juiciest Congress coverage. Now, we’re upping our game to ensure you’re up to speed and in the know on every tasty morsel and newsy nugget from inside the Capitol Dome, around the clock. Wake up, read Playbook AM, get up to speed at midday with our Playbook PM halftime report, and fuel your nightly conversations with Inside Congress in the evening. Plus, never miss a beat with buzzy, real-time updates throughout the day via our Inside Congress Live feature. Learn more and subscribe here. | | | | | Today’s Super Tuesday primaries are the first big test of the crypto industry’s effort to rebuild its Washington influence operation. A network of super PACs backed by major crypto firms and executives has spent more than $13 million to sway races in California, Texas, Alabama and North Carolina. It’s the largest spend yet from the groups’ $80-plus million war chest. The super PACs — Fairshake, Protect Progress and Defend American Jobs — are aiming to boost crypto allies and take down potential critics. A good showing by the industry’s preferred candidates could signal traction in its fight to build out a roster of lawmakers who are open to crypto-friendly policies. It’s also a major test of the U.S. crypto sector’s political aspirations following the downfall of Sam Bankman-Fried, who was a prolific donor before his FTX exchange collapsed. The No. 1 Super Tuesday target is California, where Fairshake has spent more than $10 million attacking Rep. Katie Porter’s Senate bid. Its spending has been a boon for Rep. Adam Schiff, who leads Porter by a wide margin in the polls. Coinbase CEO Brian Armstrong, a major backer of the PAC network, spoke at a get-out-the-vote rally hosted by a separate pro-crypto group on Monday in Los Angeles, along with the rapper Nas. The groups are also spending significant sums in several other races that are more under the radar. Protect Progress, the crypto donor network’s Democratic PAC, has spent $1.7 million supporting Shomari Figures, who is running to represent the area around Montgomery, Alabama, in a crowded House race. He previously served in the Biden DOJ and on the staff of Sen. Sherrod Brown, a leading crypto critic. The PAC has also spent just shy of $1 million supporting Julie Johnson, a Texas state lawmaker who is running in the competitive Democratic primary to replace Rep. Colin Allred, who’s seeking to unseat Sen. Ted Cruz. One thing that Schiff, Figures and Johnson have in common is that they’ve posted pro-crypto language on their campaign websites that echoes industry messaging. Schiff, who has never tweeted the word crypto or made it a focus as a House member, includes a section in his “affordability agenda” that calls for “comprehensive regulatory frameworks” that ensure crypto firms stay in the U.S. Figures’ site calls for policies that “embrace the new landscape around digital assets, like cryptocurrency, to stimulate innovation and technological advancement.” Johnson’s site touts the benefits of crypto innovation and calls for “clear rules of the road for the crypto industry to build technology that benefits everyday Americans.” The campaigns did not respond to requests for comment. Fairshake spokesperson Josh Vlasto said in a statement that crypto voters “will play a real role in who controls the House, Senate, and White House.” “The crypto community is playing politics to win,” he said. “We will have influence and impact in races behind candidates who align with our agenda and our vision.” MM also has new details on who’s behind the crypto super PACs. They’re being spearheaded by Michael Carcaise, according to a person with knowledge of the groups’ operations. Carcaise previously served as treasurer and as a strategist for the now-defunct GMI PAC. You may remember GMI was active in the 2022 election cycle, when it received an array of industry support from players including Bankman-Fried and FTX. Former FTX executive Ryan Salame sat on GMI’s board. Have the most super Tuesday — Send tips to zwarmbrodt@politico.com.
| | | | A message from Bank Policy Institute: 97% of the public agrees: The Federal Reserve’s Basel Endgame proposal will create a drag on our economy for years to come and will hurt working families and small businesses. Tell regulators that it’s time to #StopBaselEndgame and re-propose. Learn more at StopBaselEndgame.com. | | | | | Primary elections are happening across the country, including California, Texas and Virginia ... House Financial Services Chair Patrick McHenry, PNC CEO William Demchak and former Trump NEC Director Gary Cohn share lessons learned from the March 2023 bank failures at Brookings … Fed Vice Chair for Supervision Michael Barr, FDIC Chair Martin Gruenberg and Acting Comptroller Michael Hsu discuss the Community Reinvestment Act at the NICRC conference at 12 p.m. … House Rules considers a batch of capital markets bills at 4 p.m. before a floor vote this week. First in MM: Corporate food for thought — A new Morning Consult survey on behalf of the Public Private Strategies Institute finds that 72 percent of consumers agree that businesses should speak out publicly about threats to democracy and to protect democratic institutions. MM can confirm that at least some top Wall Street CEOs, at least privately, share similar concerns highlighted by the poll. “This data should be a wake-up call for businesses as we approach the 2024 elections,” said Rhett Buttle, president of Public Private Strategies Institute and national business adviser to President Joe Biden’s 2020 campaign. “Consumers believe that businesses have a duty to ensure fair elections and protect democratic institutions, and businesses need to act accordingly.” Big credit card news — Per Katy O’Donnell, the CFPB this morning finalized a rule meant to slash late fees that credit card issuers can charge, delivering on an objective that Biden touted in his State of the Union address last year. The regulation caps fees for a missed payment at $8, down from the current level of up to $41. In other CFPB news, our Michael Stratford reports that Julia Barnard, a consumer advocate and student debt researcher, has been appointed as the top student loan official at the bureau. Treasury Secretary Janet Yellen made the appointment in consultation with CFPB Director Rohit Chopra. First in MM: A big media-to-PR move — Jesse Westbrook, co-founder of Capitol Account and a Bloomberg alum, is joining Narrative Strategies as managing director. Narrative last month announced a major investment from the private equity firm Clarion Capital Partners.
| | | | A message from Bank Policy Institute:   | | | | | Biden dunks on Spirit, JetBlue — JetBlue announced it’s abandoning plans to buy Spirit Airlines, after a judge blocked the merger. Biden took a victory lap on X: “My administration's historic success in blocking it is a win for American consumers and competition.” What’s next from Biden — The White House plans to announce a federal task force focused on easing health care costs, as Biden tries to show voters he’s cracking down on so-called corporate greed he blames for high prices. In related news, billionaire Mark Cuban is backing Biden over former President Donald Trump, Bloomberg reports. “If they were having his last wake, and it was him versus Trump, and he was being given last rites, I would still vote for Joe Biden,” he said. NYCB deposit risks — CNBC reports that New York Community Bancorp may have to pay more to retain deposits after one of the company’s key ratings was slashed for the second time in a month. The downgrade could trigger contractual obligations from business clients of NYCB who require the bank to maintain an investment grade deposit rating. China’s optimism — Per the WSJ, China announced an economic growth target of around 5 percent for the year, higher than IMF and World Bank estimates. Economists say it will require more policy support.
| | | | DON’T MISS POLITICO’S HEALTH CARE SUMMIT: The stakes are high as America's health care community strives to meet the evolving needs of patients and practitioners, adopt new technologies and navigate skeptical public attitudes toward science. Join POLITICO’s annual Health Care Summit on March 13 where we will discuss the future of medicine, including the latest in health tech, new drugs and brain treatments, diagnostics, health equity, workforce strains and more. REGISTER HERE. | | | | | | | | This week’s McHenry saga — House Financial Services Chair Patrick McHenry is running into resistance from Democrats as members gear up to vote on one of his top priorities this week, Eleanor reports. At issue is a package of some two dozen bills designed to pare back rules for investors and startups looking to raise capital. McHenry’s vision is to build on a bipartisan 2012 law that took a similar swing, the JOBS Act. When the legislation hits the floor later this week, it’s poised to face resistance from Financial Services ranking member Maxine Waters, who voted against it in committee. The White House said Monday it also "strongly opposes." Waters sent a heck of a statement late Monday: “HR 2799, or what I call the ‘Expanding Access to Fraud Act’, is a harmful package of bills that will not only massively deregulate Wall Street at the expense of Main Street investors, but also undermine the very thing that makes our nation’s capital the envy of the word: investor confidence.” McHenry has floated potential tweaks to shore up bipartisan support, including stripping language that would override state gig worker laws and blessing amendments that have Democratic co-sponsors. This selection of bills represents some of the more partisan proposals in McHenry’s effort to ease SEC regulations. Last year, the House passed 14 other capital markets-related bills with broad support from Democrats. Rep. Ann Wagner, who chairs the capital markets subcommittee, said in an interview she’s in talks with Senate Banking members on a number of the capital markets bills to find out which could pass both chambers. Among them is her legislation that would target financial exploitation of older Americans, which the House passed last year.
| | | | A message from Bank Policy Institute: Housing advocates and bankers agree: Basel Endgame is bad for working Americans.
The National Housing Conference: “[I]f these standards are adopted, they will have a devastating impact on our efforts to increase homeownership in communities of color and disadvantage all LMI, first-time, and, in particular, first-generation homebuyers of all races who do not have the benefit of multi-generational wealth or higher than average incomes.”
Laurie Goodman, Urban Institute: “The proposal, among other provisions, would significantly increase capital charges for loans with high loan-to-value (LTV) ratios and at an excess to global capital standards set by the Basel III requirements and what is needed to maintain the safety and soundness of the financial system. The changes—contrary to ongoing federal efforts to advance equity in the mortgage market, such as strengthening the Community Reinvestment Act—would disproportionately disincentivize lending to LMI, Black, and Hispanic borrowers and communities.”
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