| | | | |  | | By Zachary Warmbrodt | | Presented by |  | | | 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.
| | Former President Donald Trump is set to reap a $3 billion windfall this morning. It will do almost nothing to solve the cash crunch that threatens his empire. In what feels like a throwback to the heady days of meme stocks and SPACs, Trump’s social media startup is expected to get approval from investors to go public in a merger with a “blank check” company. Trump will own at least 58 percent of the beefed up Trump Media & Technology Group in a deal that could double his estimated net worth. But as Declan Harty and Victoria Guida report, the money will largely be locked away from Trump for many months. It’s a set of restraints that are being imposed at the worst possible time for the former president as he faces a $450 million fraud penalty that he says he can’t pay. The state of New York could soon start seizing his assets. Trump probably won’t be able to sell his stock for six months, per the terms of a common arrangement that's designed to protect investors from insiders who might bail and drive down share prices. Even if he won a waiver from the rules, he’d likely still be limited to selling a fraction of his shares. The deal is huge for the future prospects of Trump Media, which revolves around Trump’s social media platform Truth Social. While Trump posts exclusively on the service, it has struggled to attract a user base anywhere near the size of X. Trump Media lost more than $26 million in the quarter ending Sept. 30, and it stands to gain $300 million by going public via the merger with Digital World Acquisition Corp. Looking ahead, Trump’s potential exit is a significant threat to Trump Media’s future prospects and its appeal to investors. He’s the company’s main attraction. “It’s simply trading on Trump’s name,” said SPAC Insider founder Kristi Marvin. “People aren’t buying this because they like the fundamentals — they’re buying this because they like Trump.” Happy Friday — Send tips to zwarmbrodt@politico.com.
| | A message from the American Bankers Association: Credit card points and cash back rewards help Americans save, travel and shop — but some in Congress want to end those benefits, just like they shut down debit card rewards in 2011. The misguided Durbin-Marshall bill would eliminate credit card rewards, reduce access to credit cards and jeopardize consumer privacy. Don’t let lawmakers take away your hard-earned rewards just to pad the profits of corporate mega retailers. Tell Congress to oppose Durbin-Marshall. Act now. | | | | | Fed Chair Jerome Powell participates in a “Fed Listens” event on transitioning to the post-pandemic economy at 9 a.m. … Fed Vice Chair for Supervision Michael Barr speaks at the Transnational Law Conference on the International Law of Money at noon Rough day for bank M&A — Michael Stratford reports that the FDIC is planning to scrutinize bank mergers more closely in a move that would raise the bar for future dealmaking, especially for transactions involving banks with more than $100 billion in assets. It’s the latest Biden-era attempt by regulators to take a harder line with bank M&A. The FDIC is proposing to take a more expansive approach to evaluating how a bank merger would affect competition, serve the needs of the community and impact financial stability. The FDIC board’s two Republicans oppose the plan, in a reminder of how the regulatory pendulum might swing if Trump returns to the White House. Klaros Group partner Brian Graham said the FDIC move, coupled with a recent speech by Acting Comptroller of the Currency Michael Hsu, indicates a more open outlook for bank M&A involving lenders with less than $50 billion in assets. He said it also underscores how “brutally challenging” it is to be banks with assets between $50 billion and $250 billion because regulators would be unlikely to permit them to merge to gain scale. But wait, there’s more — CFPB Director Rohit Chopra is floating the idea that Congress should bar megabanks from acquiring failing lenders unless there are no other options, Victoria reports. JPMorgan Chase last year was able to use an exception to purchase First Republic. “It makes little sense to allow such an acquisition unless there are no other willing bidders or no other means of executing an orderly wind-down,” Chopra said at the Peterson Institute Thursday.
| | | | SUBSCRIBE TO GLOBAL PLAYBOOK: Don’t miss out on POLITICO’s Global Playbook, the newsletter taking you inside pivotal discussions at the most influential gatherings in the world, including WEF in Davos, Milken Global in Beverly Hills, to UNGA in NYC and many more. Suzanne Lynch delivers the world's elite and influential moments directly to you. Stay in the global loop. SUBSCRIBE NOW. | | | | | | | | Subpoena watch — Senate Judiciary Chair Dick Durbin says the CEOs of Visa, Mastercard, United Airlines and American Airlines have rejected his request to appear at a hearing on credit card competition, Jasper Goodman reports. Asked about the possibility of subpoenas, a spokesperson for Durbin said "all options are on the table." Durbin is pushing bipartisan legislation that would try to crack down on credit card fees. Congratulations — Per the Washington Post, Senate Banking ranking member and vice presidential prospect Tim Scott is planning an early August wedding, during a traditional campaign season lull after the Republican National Convention. In other Senate Banking news, indicted Sen. Bob Menendez is declining to run for reelection as a Democrat but is keeping the door open for an independent run.
| | | | A message from the American Bankers Association:   | | | | | BlackRock vs. Texas — BlackRock is urging a top Texas official to reconsider a decision to boot the giant asset manager from handling an $8.5 billion state school fund after it was penalized over accusations related to its ESG policies. “Your actions put short-term politics over your long-term fiduciary responsibilities,” BlackRock vice chair Mark McCombe wrote to Texas State Board of Education Chair Aaron Kinsey. Read the full letter here. California insurance squeeze — State Farm, California’s largest home insurer, is declining to renew 72,000 policies in the state in part because of fire risk, the San Francisco Chronicle reports.
| | Surprise rate cut — While the Federal Reserve and Bank of England held steady this week, the Swiss National Bank unexpectedly began cutting interest rates for the first time in nine years. Per Reuters, Sweden, the ECB and the U.S. may be next. The big outlier is Japan, which raised rates this week for the first time in 17 years.
| | Bitcoin tumbles — Bitcoin has fallen by more than 10 percent since hitting a record of nearly $74,000 last week, and some analysts believe it has much further to go, Bloomberg reports.
| | | | Easily connect with the right N.Y. State influencers and foster the right relationships to champion your policy priorities. POLITICO Pro. Inside New York. Learn more. | | | | | | | | | Yellen welcomes cannabis bill — Treasury Secretary Janet Yellen told lawmakers Thursday that it would “be desirable” to have legislation that increases access to financial services for cannabis businesses, Natalie Fertig reports. “We would potentially welcome legislation in this area that would clarify for banks what their responsibilities are,” Yellen said. She thinks it “may be necessary to raise the comfort level that banks have with doing this business.” Ideas on AI — Better Markets, which advocates for tougher financial regulation, is out with a new fact sheet on AI oversight that calls for enhanced enforcement and regulatory standards that go beyond disclosure. “AI demands a new approach to financial regulation, one that effectively incorporates agile and forward-looking regulatory frameworks and a focus on consumer protection, ethics, transparency, accountability, and financial stability,” Better Markets legal director Stephen Hall said.
| | A message from the American Bankers Association: Credit card rewards are more valuable than ever right now, with high prices and inflation still stinging our pockets — but some in Congress want to take away those rewards points and cash back in order to pad the profits of corporate megastores. The misguided Durbin-Marshall bill would end popular credit card rewards programs that benefit consumers and small businesses. The legislation would impose network routing requirements on banks that issue credit cards, prioritizing cheaper networks pushed by mega retailers that could compromise consumers’ personal information in the process. Tell Congress to leave your credit card rewards alone and stop meddling in the nation’s convenient, safe and trusted payments system. It’s time for lawmakers to protect your points and stand by consumers by opposing Durbin-Marshall. Act now. | | | | | | | Follow us on Twitter | | | | Follow us | | | | |
No comments:
Post a Comment