| | | | |  | | 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.
| | Patrick McHenry is “shocked.” Seventy-one Democrats on Wednesday joined 208 Republicans to pass a McHenry-led revamp of crypto trading regulations — the first time Congress has ever taken such a step. It’s a legacy-defining moment for the retiring Financial Services Committee chair, even if the prospects of the Senate picking it up look slim. The bill is poised to be a starting point for the next Congress at the very least. The vote revealed a real bipartisan interest in setting up a new federal regulatory framework for digital asset trading, something that wasn't a given just days ago. Democrats like former Speaker Nancy Pelosi and Minority Whip Katherine Clark supported the legislation and broke ranks with their party's crypto skeptics, including Biden’s alarmed SEC chair. The White House opposed it but didn't threaten a veto, exposing what appeared to be a softer approach to crypto by doing so. In separate statements, Pelosi and the White House called for further collaboration between Congress and the administration, each touting the goal of "innovation." "This didn't break down on ideological lines,” McHenry told our Jasper Goodman just after the vote. “It broke down on those that want to be innovation-forward. This is a huge victory. I never in a million years thought we'd get that kind of outcome." The show of force is a new launching pad for the crypto lobby, which is riding high on a series of recent political victories and gearing up to spend more than $80 million on elections this year. As Jasper and Eleanor Mueller report in a new piece, crypto is emerging as a big winner in U.S. politics and policy in 2024, despite its user base representing a small and apparently shrinking fraction of the American electorate. Wednesday’s vote signaled that Democrats’ anti-crypto contingent — those like Sen. Elizabeth Warren who see big risks to consumers and the financial system from the industry’s rise — are losing sway. They may lose more ground come November, with crypto super PACs making successful strides in boosting friendly Democrats in this year’s primaries. Rep. Stephen Lynch, a Massachusetts Democrat who tried to rally opposition to the bill, told Jasper the outcome was "hugely" disappointing. “I'm the ranking Democrat on the crypto-digital asset subcommittee, so I probably know more about it than most,” he said. “I think they misled people, and people don't really understand the impact that this is going to have." "It's a pretty sad day." Good news — Sam’s back! Please send tips ssutton@politico.com and zwarmbrodt@politico.com.
| | | | A message from the Council of Federal Home Loan Banks: Our nation’s economic health depends on a safe and secure financial system comprised of thousands of local lenders able to serve their customers successfully through all market conditions. Our nation needs the Federal Home Loan Banks. Day in and day out, for more than 90 years, we have been a dependable and crucial funding partner for financial institutions large and small, supporting community lenders who in turn support local businesses, households, and families. | | | | | Treasury Secretary Janet Yellen is in Italy for G7 meetings … SEC Chair Gary Gensler speaks at the ICI leadership summit at 8:30 a.m. … The U.S. Census releases new home sales data for April at 10 a.m. … Yellen’s new warning — Michael Stratford reports that the Treasury secretary will use a press conference in Italy this morning to rebuke Israel’s threats to cut off financial institutions in the occupied West Bank, saying it would deepen “dire economic conditions” for Palestinians. Today in ‘higher for longer’ — Per Victoria Guida, minutes from the last FOMC meeting indicate that Federal Reserve officials expect to hold rates steady if inflation doesn’t keep moving back toward the central bank’s 2 percent target. Many members of the Fed’s rate-setting committee said they’re not sure to what extent higher borrowing costs are slowing rising prices. Stocks fell on the news. The view from Goldman — Top Goldman Sachs executives are raising some red flags about the U.S. economy this week. At a Boston College CEO Club lunch Wednesday, Goldman CEO David Solomon said he recently spoke with a top grocery chain executive who said customers have been cutting back purchases amid rising prices. "We're starting to see the average American slowing down and changing his habits,” Solomon said. Solomon doesn’t expect the Fed to cut interest rates this year, per Reuters. Goldman President and COO John Waldron told an Investment Company Institute conference in Washington Wednesday that the YOLO economy might be coming to an end. “There’s a post-Covid effect where people were taking the trips and buying the steak dinners,” he said. “But that might be running its course.” He added that Goldman hasn't yet seen a drop off among households making around $100,000 per year or more. Fintech meltdown — CNBC reports that a dispute between the fintech startup Synapse and banking partners has left potentially millions of Americans without access to their money for nearly two weeks. The Andreessen Horowitz-backed company declared bankruptcy in April.
| | | | A message from the Council of Federal Home Loan Banks:   | | | | | Inside the House's next crypto vote — The House today is set to make crypto history again by passing legislation that would prohibit the Fed from issuing a central bank digital currency. The bill from House Majority Whip Tom Emmer has more than 100 Republican co-sponsors and major backing from the Heritage Foundation’s political arm, underscoring the issue’s growing importance on the right. "The central government folks, they don't just want to wrap their arms around [crypto]. They want to control it completely, out of the Fed, the Treasury," Emmer told Eleanor. "I totally disagree with that; I want you to control it." It’s not expected to attract big Democratic support like Wednesday’s crypto vote. Critics say the bill would unnecessarily tie the hands of the U.S. as many other countries ramp up work on their own CBDCs. So Emmer is looking ahead to the next Congress. "You see what the future is when you have President Trump, the Republican nominee for president, [who] is literally saying, 'We're not going to have a CBDC,'" he said. "I take those as all good signs that he's in a place where we can have reasonable discussions in the next Congress.” In related news, Emmer said he has concerns about pairing stablecoin legislation with a bill that would help banks serve cannabis businesses. "It's not my call," Emmer said. "But what I would say is, I think you risk politicizing the stablecoin bill." First in MM: Lawmakers press Gensler on ether ETFs — Declan Harty reports that five House Financial Services members led by Rep. French Hill are urging SEC Chair Gary Gensler to approve the launch of ether ETFs, citing the agency's previous blessing of bitcoin funds. The three Republicans and two Democrats wrote to Gensler ahead of today's deadline for the SEC to make a decision. “With the commission’s actions earlier this year, it seems a natural progression that would not only demonstrate consistency in the commission’s application of its standards but would also affirm the legal reasoning that facilitated the spot bitcoin ETPs,” the lawmakers wrote in the letter.
| | | | THE GOLD STANDARD OF FINANCIAL SERVICES POLICY REPORTING & INTELLIGENCE: POLITICO has more than 500 journalists delivering unrivaled reporting and illuminating the policy and regulatory landscape for those who need to know what’s next. Throughout the election and the legislative and regulatory pushes that will follow, POLITICO Pro is indispensable to those who need to make informed decisions fast. The Pro platform dives deeper into critical and quickly evolving sectors and industries, like financial services, equipping policymakers and those who shape legislation and regulation with essential news and intelligence from the world’s best politics and policy journalists.
Our newsroom is deeper, more experienced, and better sourced than any other. Our financial services reporting team—including Zach Warmbrodt, Victoria Guida and Declan Harty—is embedded with the market-moving legislative committees and agencies in Washington and across states, delivering unparalleled coverage of financial policy and the financial services industry. We bring subscribers inside the conversations that determine policy outcomes and the future of industries, providing insight that cannot be found anywhere else. Get the premier news and policy intelligence service, SUBSCRIBE TO POLITICO PRO TODAY. | | | | | | | | | A SCOTUS case to watch — A looming Supreme Court ruling on whether to curtail the power of in-house judges at federal agencies has the potential to reshape how Washington polices corporate power, according to a new deep dive from POLITICO. “Driven by an alliance of tech billionaires, conservative legal activists and the business lobby, the legal campaign that has arisen around [the case] is a little-appreciated but significant version of the ‘war on the administrative state’ that Donald Trump promised but largely failed to deliver,” Declan, Josh Sisco and Josh Gerstein report. The CFPB’s new target — Per Katy O’Donnell, the CFPB says in a new rule that Buy Now, Pay Later companies will be held to the same consumer protection standards as conventional credit card providers. “When consumers check out and choose Buy Now, Pay Later, they don’t know if they will get a refund if they return their product or whether the lender will help them if they didn’t get what was promised,” CFPB Director Rohit Chopra told reporters. A tussle over FDIC leadership — Victoria reports that state bank regulators are pressing the White House and Senate to name an FDIC chair who has state-level supervisory experience. In letters this week, the Conference of State Bank Supervisors cited a legal requirement for someone on the agency’s board to have that background. It could help potential candidates like New York Department of Financial Services Superintendent Adrienne Harris.
| | | | A message from the Council of Federal Home Loan Banks: Our nation’s economic health depends on a safe and secure financial system comprised of thousands of local lenders able to serve their customers successfully through all market conditions. Our nation needs the Federal Home Loan Banks. For more than 90 years, we have been a dependable and critical funding partner for financial institutions large and small, supporting community lenders who in turn support local businesses, households, and families.
The FHLBanks are also key supporters of affordable housing and community development initiatives. Since 1990, we have contributed more than $8 billion in affordable housing grants, and in 2024 alone, we expect to provide approximately $1 billion in support. We are one of the largest sources of private funding for affordable housing in the country. Working with thousands of members and housing partners, the FHLBanks play a crucial role in the economic health of our communities, delivering measurable impact and, most importantly, hope. | | | | | First in MM: Freddie second mortgage plan takes more heat — Katy O’Donnell reports that Structured Finance Association CEO Michael Bright is warning that Freddie Mac’s proposal to start buying second mortgages “may exacerbate current housing affordability challenges” by keeping homeowners in place and may also crowd out private capital. Bright is the former acting president of Ginnie Mae and an ex-GOP Senate aide.
| | | | YOUR GUIDE TO EMPIRE STATE POLITICS: From the newsroom that doesn’t sleep, POLITICO's New York Playbook is the ultimate guide for power players navigating the intricate landscape of Empire State politics. Stay ahead of the curve with the latest and most important stories from Albany, New York City and around the state, with in-depth, original reporting to stay ahead of policy trends and political developments. Subscribe now to keep up with the daily hustle and bustle of NY politics. | | | | | | | | | Follow us on Twitter | | | | Follow us | | | | |
No comments:
Post a Comment